Rentals are IDEAL

Rental homes are the IDEAL investment because they offer a higher rate of return than other investments without the volatility of the stock market. With certificates of deposit and bonds at less than 2%, people need an alternative investment that they understand and with a reasonable amount of control.

In this case, IDEAL is an acronym identifying the advantages of rental properties.Ideal Investment-2.png

  • Income from the monthly rent contributes to paying the expenses and a return on the investment.
  • Depreciation is a non-cash deduction that shelters income for some investors.
  • Equity buildup occurs with amortized mortgages because each payment is composed of interest owed and principal reduction to retire the loan by the end of the term.
  • Appreciation is achieved as the value of the property goes up.
  • Leverage can increase the return on investment by using borrowed funds to control a larger asset.

These individual benefits working together make rental real estate a good investment for today’s economy. Increased rents, high rental demand, good values and low, non-owner occupied mortgage rates contribute to positive cash flows and very favorable rates of return.

To find out more about how rentals might complement your current investment plans, contact your real estate professional.

Smoke and Mirrors Day

Today is “Smoke and Mirrors” Day.  I’d never heard of it. But I like the sound of it. Is it like “Fire and Reflection” Day? “Fog and Glass” Day?  Nope, it’s a day devoted to trickery, deception and the art of fraudulent cunning.  Got your attention now, don’t I?!

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Have you ever wanted to just play havoc with someone or something? Well don’t, I really can’t recommend that (but if you do today’s the day!).

I’ve heard the term smoke and mirrors in legalese….sorry to all you lawyers out there! And possibly politicians use this as well?

But for us, let’s just all take some time today to perform a bit of magic…learn a new magic trick, make something disappear or do something nice and unexpected for someone today,

Save the Cost of Mortgage Insurance

During the banking crisis in the Great Recession, certain types of mortgages were unavailable that are once again being offered. Fortunately, the 80-10-10 mortgage is one of those making a reappearance and it can save borrowers a considerable amount of money. 80-10-10.png

The objective of an 80-10-10 mortgage is to avoid the expense of mortgage insurance for buyers wanting a 90% loan. A buyer can obtain an 80% first mortgage and a 10% second mortgage with a 10% down payment and not be required to have private mortgage insurance.

For example, a buyer could put $30,000 down on a home priced at $300,000 and get an 80% first mortgage without mortgage insurance. The borrower could get a second mortgage, either through the same lender or a third party.

In the example, the 80-10-10 would save a buyer $193.71 per month which can be a considerable amount of money over a ten-year period. The interest rate on the second loan will be higher than the first because there is more risk.

Helping buyers make better choices is a valuable service real estate professionals can provide. Having the right tools and information can make the decisions easier to understand. Using an 80-10-10 calculator, you can see what the savings might be for your situation.

5 Reasons to have a Home Security System

But let’s start with some basic questions…Do you want one?  Do you need one?  Should you DIY or hire a professional?security

First of all, a home security system doesn’t have to be expensive, and you can install one yourself.  The latest home security systems are simple enough and inexpensive enough that you shouldn’t use that as an excuse not to read further! The safety of your family and your home isn’t something to pass off as too hard or too expensive.  In a nutshell, if you can use a smartphone, you can use a DIY security system.

If you’re not sure that a DIY is for you, there are many companies that can come in, access your needs and design a system that is perfect for you. They’ll monitor and alert you if anything changes in the areas that you have indicated are important to you.

So why have a system?

1) If you live in a cold winter climate (like me in the Northeast) but travel to warmer areas (NOT like me, I’m still in the Northeast), wouldn’t it be comforting to know that if the power/heat goes out in your home, the system will alert you to that and it could be addressed before your pipes freeze? Have you ever been in a home after the pipes have frozen and then everything defrosts?  Not pretty.

2) If you come home after dark, wouldn’t it be great to have lights come on as you approach the garage or doorway? All those hidden corners and shadowy places are bright and not scary!

3) If there is a fire, wouldn’t it be great to have the fire department alerted immediately? A smoke and fire alarm system could know about the danger before you do. The fire department might not get to the house before you notice the fire, but with a fire alert all you’d need to do is leave safely.

4) If there is an attempted break in, wouldn’t it be great to stop it before it starts…I just read that 9 out of 10 burglars said that they would not attack a home if there was a security system.  Who knows what that last one is thinking, right?! Smarter than the average bear…

5) And did you know that having a system can lower your homeowner’s insurance premium? The system just may pay for itself while giving you the benefit of some great peace of mind! And we can’t put a price on that!

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Here’s a link to a site that rates security systems, and please call if you want recommendations for local (Midcoast Maine) companies that are fantastic!!  http://bit.ly/2mY4eLv

Important Estate Documents

An estate plan is a collection of documents to ensure that your wishes are carried out because of death or incapacity to make decisions for yourself. Spouses, minor children, adult children, property and investments can all be factors that should motivate a person to undergo the process.12902925-250.jpg

Will – this document specifies the way a person wants to manage and distribute his/her assets after their death. When a person dies without a will, the laws of the state where the person resided will determine the distribution of the property.

Durable Power of Attorney – this document grants to a designated person the authority to act on behalf of the principal in in legal affairs should the principal become incapacitated. Among other things, this would allow the attorney-in-fact to buy and sell property on the behalf of the principal.

Healthcare Proxy – this document grants that a designated person can legally make healthcare decisions on behalf of the principal when they are incapable of making and executing specific decisions stated in the proxy.

Living Will – this document directs physicians with respect to life-prolonging medical treatments in case they become unable to communicate their decisions.

Hippa Release – this document allows heath care providers to release your health care information to a designated person. Otherwise, they are required by federal law to protect the privacy of your health information.

Letter of Instruction – This document contains information and instructions about a person’s wishes upon death. It is intended to offer details on whom to contact and where to find important documents about personal and financial matters.

Requirements of these documents can vary from state to state and legal advice should be obtained. If you need a current estimate of value on real estate that may be involved, usually a price opinion from a licensed real estate professional will suffice. It would be my privilege to assist you with this at no cost or obligation.

Credit Terms Explained…

 

First, some terms and acronyms!

~ FICO stands for Fair Isaac Corporation, which is a large company that provides the software that calculates your credit score.  One founder’s last name is Fair. The other’s is…you guessed it…Isaac.

~ Credit is a promise to buy now and pay latercredit-score

~ Credit risk is the likeliness of you paying back the debt

~ Credit reporting agency (there are 3 major ones) collect, maintain and provide information about your credit history

~ Credit score is the number that all of the above leads to! Your credit score is a number that is compiled to determine your creditworthiness

Credit scores range from 300 to about 850 and if you haven’t guessed by now, the higher the score the better your credit, and perceived willingness to repay a debt.  The 3 large reporting agencies are Experian, Equifax and Transunion, and for the purposes of obtaining a mortgage, your lender will use all three.  But your credit score is used for much more than just getting a loan to purchase a home. Credit card companies, insurance agencies, cable companies, cell phone companies and landlords are just an example of who may want to see your credit score and credit report before saying “yes” to your requests.

Here’s a great link to a booklet to find out much more about FICO and credit scores ~ http://bit.ly/2nmZmh9

And one to find out how to improve your current score ~ http://bit.ly/2mD1GAl

A sign of spring….

Well, it’s finally here, the day you’ve been waiting for. Today is “National Learn About Butterflies Day”.

Wait, what? You haven’t been waiting for it?  Too bad, here it is, in all it’s glory.  Or all it’s fluttery color anyway. (yes, that’s a word. I think)

Fun facts to share about butterflies (and when you do so please use #LearnAboutButterfliesDay)

~ Worldwide there are more than 24,000 species of butterflies

~ Wing spans range from 1/8  inch to 12 inches

~ Top flight speed is up to 12 MPH

~ Life spans are from a week to a 9-10 months

Butterflies rely on plants and flowers to survive, so today is a great day to start thinking spring and gardens and plantings.  See, any time I can write about spring makes me happy!  I’ll keep searching and counting the days……