It can be a difficult decision trying to determine if you should buy a home or if you should rent one. Buying a home has certain advantages and renting a residence has some of its own. There are so many different variables that go into this decision. You need to consider the following factors to help you make the decision that makes the most financial sense for you.

Amount of Payments

Before deciding whether to rent or buy you need to take an assessment of your financial situation. You should check out the prices of apartments in the area and see how much you would need to devote to rent payments. You should also do a home loan comparison to see what the monthly mortgage payments would be like for a comparable house. It makes sense to buy a home if the amount of your rental payments is close to the monthly mortgage payment amount.

Length of time

Buying a home can be a smart long term decision. It is however not a short term move. You need to be certain that you would like to put down your roots in an area before deciding to purchase a home. The minimum time period that you should be willing to spend in an area is five years. If you plan to live in a particular region of the country for at least five years then you should consider owning a home. Housing prices are likely to appreciate over the long term and you will have something to show for your payments.

Cash on hand

There are different cash requirements for individuals that rent an apartment versus those that purchase a home. Renting a home typically just requires that you come up with another cash deposit to pay the first and the last month’s rent payments. Buying a home is a lot more cash intensive since you will be required to put down a down payment. The down payment requirement varies depending on the type of loan that you get. Some traditional and mortgage refinancing loans require as little as 3 to 4 percent of the purchase price while others require as much as 20 percent.

Only you can determine if a home purchase is the right decision for you at this time. Individuals that are willing to commit to an area, have a decent amount of cash, and a solid credit score may find that they can save money by purchasing a piece of property instead of renting.

If you’re in business then one of the main things that can prove to be problematical, both in finding it and cost, is the valuable office space that your venture occupies. Little wonder many small business, freelancers and the like choose to spend their working days at home. Anyone with a larger business is often forced to find a decent working environment at the right price, and that’s not always too easy.

Now though, thanks to the power of the internet, even locating office space in London has been made a much more straightforward process. It’s largely thanks to the way that you can now utilize the free services of a desk and office space comparison website in order to locate your dream office environment. What’s more, you’ll stand a much better chance of getting it at the right rental price too.

What do you need?

Going down this route is actually a fast and efficient way of spending money on exactly the right working area that you need. In fact, if you’re at the lower end of the market and only have meager requirements then a desk space rental option is ideal. This is something that comes short on frills, but could provide you with the perfect inner city location.

You essentially search for available properties, based on the sort of criteria that you’re looking for. This might be something like a simple desk in a London W1 office, or similar, and you’ll then get results back that give you an overview of what’s available. Desk space rentals generally come with basics like the desk, obviously, a chair and high-speed Internet access.

Get going

So, all you need to do is turn up with your laptop and you can be up and running in mere minutes. The added benefit of the desk space rental is that the landlord takes care of the upkeep of the working areas, so at the end of the day you simply unplug and head off home and leave the cleaning to someone else. This is all part and parcel of the rental fee.

And when it comes to how much you pay, then these are good times for those who need desk space rentals. Many landlords are keen to maximise profits on the dead space in their office buildings, so rents are often keenly priced. What’s more, they work on a short-term rolling basis in many scenarios, meaning that you’re not tied in for ages and can move on if and when you need to without too much hassle.

The way forward

With countless business professional now finding that the desk space rental option is ideally suited to their needs, we’re also seeing many of these shared office set-ups producing hotbeds of creativity. Indeed, if you’re looking to network much more, and hopefully generate more business into the bargain, then renting desk space in the centre of London is more likely to achieve that than working out of a spare bedroom in the home counties somewhere.

About the author: Rob Clymo writes on behalf of Office Genie, the UK’s number one desk space market.

If You’re Looking to Sell Your Home, Should You Buy a New One First or Sell Your Current Home First?

As I have mentioned before, my wife and I are looking to move into a bigger home very soon. Our family has simply grown to the point where we no longer fit and I feel like the house is about to burst at the seams. Plus, I can’t stand living on a busy road…our next house will be on a quiet side street (live and learn).

We’ve narrowed our search down to a particular area where we can get a lot more house for our money without having to go 100 miles away. But like many homeowners who are looking to upgrade, we’re faced with the decision of buying a new house first or selling our current home first.

The more I think about it the more I feel that the better financial choice is to get our current home under contract first and then look to buy something, even though we have a nice chunk of cash sitting in our ING Direct Savings account just waiting to be used for the down payment.

It’s a buyer’s market right now. There are lots of homes available and many are just sitting there forever. If we bought a new house first and then had trouble selling our current home we could be stuck floating 2 mortgages. That’s not something I feel comfortable doing. And since there is such a glut of homes on the market, I’m pretty confident that we could find something quickly. Of course if we can’t that would create some problems.

We’re also trying to time the whole move into a pretty tight window. My two oldest kids are currently in kindergarten and second grade, and we want the move to take place over summer vacation. It will be traumatic enough for them to move away from all their friends and the school they know. I’d rather not make things worse by pulling them out in the middle of the school year.

What would you do if you were in my situation? Would you buy first or sell first?

If you’re thinking about buying a home in the near future, now is the time to start preparing.  The last thing you want is to find your dream home and be all ready to make an offer only to realize there’s something wrong with your credit and you can’t get approved for a mortgage.

Being approved for a home loan isn’t as easy as it used to be when lenders were willing to write a blank check to anyone with a pulse.  These days lenders are following much more stringent guidelines and even a few points on your credit score could mean the difference between the home of your dreams and disappointment.

Even if you’re not planning on shopping for a new home until next year, you should pull copies of your credit report from the three big reporting agencies (Experian, Equifax and TransUnion).  Go over each of them with a fine-toothed comb and look for any errors.  Look for things like late payments, accounts that don’t belong to you, and accounts that are paid off buy not marked as such.  Any of these could have a negative effect on your credit score which would cause your loan application to be rejected.

If you spot any errors, it’s up to you to get them fixed.  It could be as simple as calling your old bank and asking them to notify the credit reporting agencies that you did indeed pay off your car loan so it no longer shows as an open account.  The sooner you get started on fixing your credit score the better!

You should also be keeping an eye on interest rates and shopping for a mortgage.  Use an online mortgage calculator to determine how much you can afford to pay each month, and don’t forget to add in property taxes and insurance!  Keep in mind that the amount the bank may be willing to loan you could be more than you can comfortably afford.   Don’t just go by their numbers…in the end it is YOU that has to make the payment every month.

If you want to save yourself some time and legwork you can consider hiring a mortgage broker to shop around and find you the best deal.  Obviously they will charge you a fee for this service but it may save you some money if they can get you a loan with lower closing costs or a lower interest rate.

I can’t tell you what a relief it is to write those words.  It’s like a giant stone has been lifted off my shoulders and I can finally think about other things again.

To bring you up to speed…my father-in-law passed away last year after a valiant battle with lung cancer (my mother-in-law had just passed the year before).  Needless to say it has been an emotional time for our family.  My wife is an only child and literally her entire family outside of her parents lives in Italy, so she had to rely on me a lot.

Even though my wife and I agreed from the start that we would sell the house, it was a long time before she was emotionally ready to do anything about it, and there was a lot that I just couldn’t do for her such as signing documents.

There were many things to sort through, organize, and either keep or toss.  In the winter I had to dig my own house out of the snow and then drive 20 miles to dig another house out.  And in the spring we had to have a landscaper clean up the yard because it very quickly looked like the Amazon.  We had to get the floors refinished because the dog destroyed them.  I had to install a new vanity, sink, faucet and light fixture in the bathroom and paint much of the house as well.  We thought about adding some Yale doors composite range to add some curb appeal but we got lazy and just painted the door.

But thankfully it went quickly once it hit the market.  Of course there was some last minute drama (suspicions of an underground oil tank, problems with the electrical panel, etc) but it all got straightened out in the end.

So where to from here?

Well we crunched some numbers and it looks like once the estate’s remaining debts are paid off we’ll have enough to pay off all of our credit card debt and the rest of my student loan.  That’s right…we’ll be debt free outside of our mortgage!

I can’t stand seeing how much money we throw down the drain to interest payments every month, so it will feel good to be over that.  The key now is to use this opportunity to our advantage and make sure we never find ourselves in debt again.  That means careful spending and paying ourselves first so we can start accumulating some serious wealth.

When we were first married and just starting out, no one did more for us than my wife’s mom and dad.  Somehow I feel they’re still looking out for us.

This is a guest post from the folks at MoneySuperMarket.com

Getting onto the housing ladder is becoming ever more difficult for cash strapped young people, as home loans have ever tightening lending criteria and require larger deposits for first time buys.

Sadly, going to the ‘Bank of Mom & Dad’ isn’t always a viable solution and young people find themselves stumped for a practicable route to save and get their first foot on the housing ladder.

The important thing is to get organised and that means biting the bullet and sorting out a budget, cashflow tracker, savings goals and realistic assessment of your current financial situation.

It can be worth doing this with a financial advisor, who will have a clear and unbiased view of your finances and can help you build a simple view of the current picture.

You need to be honest with yourself when carrying out this exercise, as misrepresenting your own budget figures will only harm your plans in the long run and make it all the more difficult to reach your goals.

Get your monthly budget in place and understand spending patterns, to see where savings can be made and spending amounts shaved by careful planning.

Useful techniques involve ‘downshifting’ your supermarket purchases, setting up a clothing or social budget, minimizing socializing unless it’s within your home or cooking with friends, doing sports, or enjoying other low-cost activities.

Don’t be proud, use coupons and vouchers, get advice from older relatives who grew up in the more economic environment, cook from scratch and cancel that wasted gym subscription.

Stop buying morning latte’s and pretzels, as even shaving $3 a day from your budget will add up to over $1000 in a year!

Also look at high interest savings accounts to make the most of your newly growing savings and ensure you’re getting the best deal on the market. Some banks will even offer house deposit savings with special terms and rates to help young people get their foot onto the ladder.

It is also a good idea to review your current loans and debts and switch high interest credit onto zero percent or low ‘life of balance’ cards. In addition, Car loans sold on the forecourt can often be replaced by lower interest personal loans from your bank.

If you are truly focused on owning your own property, remember that car loans for smaller cars are preferable to spending vast amounts on trying to buy the car of your dreams. The dream car can come later.

Think outside the box for ways to earn extra income, for example by freelancing, taking up a second job or doing part-time temporary work to provide an extra savings boost.

Or, if your parents are willing and able, take a deep breath and speak to them about options to borrow home deposit help from them, or to ask them to ask as guarantors on a parent-guarantor home loan.

Finally, plan for the long-term and track your progress as you go. Keep a tracker that monitors each savings deposit you make, or additional loan repayment you manage to hit.

Reward your success with ‘freebies’ such as lovely home-cooked meal, a film night, a celebration with your folks – to help keep on track and motivated on your ultimate goal – to own your very first own home!

Last week we officially put my father-in-law’s house on the market and so far our realtor has gotten nothing but positive feedback.  We even received our first offer last night!

The bad news is that the offer was for $35,000 less than our asking price.  The worse news is that it could be the best offer we get.  In this market it’s just impossible to know what’s going to happen.

Here in New Jersey property taxes and house prices in general are far above the national average.  That’s the price we pay for our proximity to New York City.  But when the housing bubble burst it dragged prices down considerably.  It’s very frustrating because if we were selling a few years ago when the market was at its peak we easily could have gotten $50,000 to $75,000 more than we’re asking for right now.

But tighter lending standards have limited the amount buyers can borrow.  Plus, the market is completely saturated with foreclosures and short sales which drag down the prices of all homes in the area.  We’re trying to stress the benefit of buying a home that isn’t bank-owned because there will be a lot less red tape involved, but that’s a tough sell when there are so many houses for sale at a deep discount.

Anyway, we’re making a counter offer so we’ll see what happens.  Personally I can’t wait until this whole ordeal is over with.  It’s taken up a lot of our time and I think we’re all ready to move on.  With the money we receive from selling this house we can pretty much clear our debts and then use the rest as a down payment on a new home for ourselves (we have severely outgrown our current abode).

Keep your fingers crossed for us!

Today’s post is brought to you by Freddie Taylor from InvestWithPassion.com.  If you have savings put aside, you may want to consider investing in real estate…

You have been working your entire life, budgeting, avoiding impulse purchases and saving your money. Great work! Most people don’t have a good savings account built up, but you are not most people. You have goals, are ambitious and are doing the right thing. Yet you feel like your money could be growing faster for you if the right opportunities are presented.

Real Estate Investing Ideas to Consider

Have you considered real estate investing? Not telling you this is a guaranteed way to boost your savings account and net worth, but it is definitely an option worth pursuing. It is my aim here today to give you several ideas on how you can invest your savings in the real estate market. Some of these you might not be familiar with, so let’s take a look.

Cash Purchases

Cash is King! This is one thing that hasn’t changed in the real estate market and life. Those that have cold, hard cash have options that many others don’t. Because you have managed to save money and depending on how much that is, the world of real estate is ripe for your choosing. You can do just about anything, including making cash purchases of property.

The fact is people who buy with cash get great discounts over others. The reason is the seller gets their money upfront and doesn’t have to worry about the risk of default. These are two basic reasons they are typically willing to take less than the asking price. Plus if you are a cash buyer, then you have options others do not.

Buy from Auction – Auction purchases are only open to cash buyers, no lending arrangements are allowed. This lessens the pool of potential buyers significantly; therefore, prices are typically discounted much lower than retail asking prices. However, these homes have been foreclosed on, taken over by the bank, and may have severe damages to them as well. Buyer beware.

Buy from a wholesaler – Wholesales acquire the rights to a property at a steep discount, then turn around and sell properties to buyers. Wholesalers primarily deal with cash buyers because they are looking to cash out of a deal immediately to move on to the next one. Often times, wholesalers buy at the auction as well.

Buy from the bank or home owner – With cash you bid on properties with the special note, “All cash offer”, attached. This is special to the sellers because there is no risk of the deal falling through due to financing requirements, the money is received at closing, and who doesn’t like cash?

Options for Cash Purchases

The great thing about buying properties with cash is that you have options on what you can do with the properties acquired depending on your investment style and aversion to risk.

Landlording – Renting properties is one of the most lucrative businesses in the world, but there are headaches that come with it. However, since you don’t have a mortgage the money that you rent the place for over taxes and management expenses are profit.

Flipping Properties – You may think property flipping is dead, but you would be wrong. You could become the wholesaler. Purchase properties at a deep discount, only to turn around and sell it immediately. Or you could fix the properties up first with some additional cash investment, then sell it to the retail market. There are plenty of ways to increase earnings on your money.

Private Money Lender

Here is an option that most people don’t think about. You could become the bank and lend money directly to those in the real estate market in need. The good part about this is that you can set your own terms. Say you lend someone $50,000 for a period of one year. You could then set your interest rate to 15% or whatever you like if they accept the money. Tell me where can your savings get 15% interest in any market? This could be pretty lucrative. Obviously, it comes with its drawbacks, but you have to be savvy enough to negotiate a contract that protects your hard earned capital.

Use Savings as Collateral for a Line of Credit

Take your cash to the bank and establish a line of credit. The great thing about having money is it attracts money. And going to open a line of credit only increases the pot of available cash you have to play and invest with. Be sure to negotiate your terms as you sit in a place of strength in these situations.

Tax Lien Investing

With the job market suffering, taxes rising, many people out there are behind on their tax payments. There is an entire industry of real estate investors that strictly purchase tax liens. How it works, depending on your State, is this. You pay the delinquent taxes on a property. The owner of the property has to pay you an interest on those taxes. If you are not repaid in two years, typically, then you receive the deed to property. Tax deeds supersede all others. It is a great way to pick up properties for low prices, but involves a bit of waiting and diligence as you can imagine.

Entrepreneurship

There are all sorts of businesses that are involved in the real estate sector. You could take your savings and open a business that serves the market or take on a partner and invest together. Either way, this could be the moment that you are looking for to do something different. You could open a professional business, contracting business, become a property manager, flip properties, rent properties, the list is endless.

REITs

Finally, if you want to invest in real estate and want to be completely hands off, then consider investing in REITs. Real estate investment trusts are stocks that you can purchase in large commercial real estate companies. You don’t have to worry about the day to day operations of the business falling on your shoulders, but you can get involved and take advantage of the opportunities in the real estate market.

Hopefully you gained a few ideas real estate investing can offer your savings. You have solved the most difficult part of the investment environment, attaining capital. You just have to decide what you want to do with it, how much involvement you desire, and which investment opportunities are right for you.

The other day my buddy Paul stopped by for some burgers and beers and he told me that he received a job offer from a company located in London, and he’s seriously considering taking it.  He’s already been to the UK a few times for vacation and he always said he’d like to live there someday.

Since he’ll need a place to stay if he decides to accept the offer he’s been busy looking at online flat auctions (apartments for those of us on the American side of the pond) at sites like Zoopla.

What surprised me was when he handed me a Guinness and told me that he wasn’t just looking at apartments…he might actually buy a house online!

I can’t imagine buying a home without having a chance to give it a walk through and look for problems or potential issues.  Pictures are great and all but they can also be deceiving.

Now on their website Zoopla does make it clear they expect you to view and inspect properties before bidding on them, but Paul would be bidding without ever seeing it in person.

Personally I think he’s nuts, but Paul seems ok with it.

What do you think?  Would you use online property auctions to find and purchase a house without ever actually seeing it in person?