Everyone knows that the real estate market fluctuates throughout the year, and some years are more extreme than others. The biggest question on the minds of everyone in 2020 and for the upcoming year is all about knowing when the time is right.
Should I buy or sell a home in Denver right now?
Our expert local agents have your back when it comes to market trends, but hereâs a quick guide on understanding how and why the market changes.
Supply & Demand
The real estate market is often used as the number one example of a supply and demand industry. However, itâs important to understand what makes the demand or supply change. Youâve probably heard of a buyerâs or sellerâs market before; what are they and how do they come about?
Sellerâs market: People use this term when there are eager buyers but few sellers. This means that the homeowners who put their humble abodes up for sale are more likely to get multiple offers. This typically results in higher prices for homes.
Buyerâs market: This term is used when there is a high number of homes on the market and fewer buyers. Sellers often will wait longer for their home to sell and the sale price may be a bit lower than the listing price because buyers have more leverage to work with; when homes arenât flying off the market, sellers are more willing to negotiate to get their sale underway.
The swing from buyerâs to sellerâs market is influenced by several factors. Here are just a few.
Interest Rates
Interest rates play a big role in the ability for many buyers to afford a home. Locking into an interest rate is a long-term decision that spans the life of your mortgage in most cases. Therefore, many buyers are hyper-aware of rates and what that means for their payments over time. When interest rates are low, it gives more buyers the opportunity to make homeownership a reality.
If youâre looking to take advantage of low rates as a buyer, we recommend finding a mortgage lender or broker who can find you the best rates in your area and for your circumstances. Not all lenders are created equal, and a loan officer can help you make the best decision. Homie Loans guarantees that they will beat any competitorâs locked loan estimate, or theyâll pay you $500.*
As a seller, itâs still important to be aware of the rates. If youâre selling during a time when rates are high, thereâs a good chance there will be fewer buyers.
World Events
Many world and national occurrences, like major storms and weather events, election years, and employment rates, impact the health of the real estate market. Be aware of whatâs happening in your local market and keep an eye on the news.
Time of Year
If youâre looking to sell or buy during winter, be aware of how weather will impact you. Snow makes for undesirable moving conditions. This can mean fewer buyers in the market, which sellers may find extends their timeline for selling but buyers may see less competition.
While spring and summer may seem like the best time of year to sell a home, so will everyone else. Be aware of how the warmer months impact competition.
The Role of Real Estate Experts
Real estate agents are key players when buying or selling a home. Agents, like the pros at Homie, live and breathe the market. Whether itâs a buyerâs or sellerâs market, your agent can help you make the right decision to sell your home fast and for top dollar or help you find and win your dream home within your budget.
You wonât want to enter the competitive real estate market in Denver without one!
Let Homie Help You Make Your Next Move
If youâre ready to take advantage of the hot market to come in 2021, click here to start your listing.
If your dream home is in your 2021 plans, let one of our buyerâs agents help you find and tour the perfect home, and then build a compelling offer. Click here to get in touch.
Want to learn more about buying or selling? Sign up to get more info directly to your inbox!
The post Real Estate Market 2020 Recap & 2021 Forecast Denver, CO appeared first on Homie Blog.
Hello! Are you interested in starting a dog treat bakery business? Well, good news, this article will tell you what you need to know. Plus, you can sign up for this free training workshop that will teach you how to start your own side hustle baking and selling dog treats.
Hi! My name is Kristin Larsen, and I runBelieve in a Budget, a blog about personal finance and my experience with various side hustles. (It feels like I’ve tried them all over the years!)
As I’ve written about before here on Making Sense of Cents, my favorite online side hustle is working as a Pinterest virtual assistant. Managing Pinterest accounts is a great way to earn an income entirely online.
But today, I’m here to talk about a completely different side hustle, one that can be run entirely offline if you want (or entirely online, or a combination!).
While I love being able to work from home (or anywhere) on my computer, there is something to be said about stepping away from the computer and doing work that doesn’t involve the ‘virtual world’ – work that requires you to move around a little instead of being planted in front of a screen all day long!
In the case of this side hustle, it involves moving around the kitchen baking up beautiful and delicious dog treats.
Yes, dog treats!
The side hustle I’m speaking of is starting a dog treat bakery and I’m so excited to share it with you today. As a successful dog treat baker myself, I know first-hand how in-demand and lucrative this business can be.
How do you start a dog bakery?
How I Took My Dog Treat Bakery from Passion to Side Hustle to Full-Time Job
My dog treat bakery story started over ten years ago when I was an interior architect and designer at my 9-5 job.
At the time, I was the proud dog mom of Bella, a sweet-but-very-high-maintenance pup. Her birthday was coming up and I wanted to give her a birthday treat that fit her ‘diva dog’ personality.
I went to the local pet store and perused the aisles, but all I could find were treats filled with ingredients I couldn’t pronounce that looked like they had been sitting on the shelves for years. After a disappointing visit, I walked out the door and decided that I was going to bake Bella a treat.
This was kind of laughable since baking was not something I had done much of in my life, but I was going to figure out a way to make it work.
I decided to do some research by going to a local bakery and spending a lot of time staring at the baked goods (awkward!), trying to figure out which one I could recreate for Bella. I finally decided on a pretty cupcake adorned with white icing.
I went home, researched dog-safe ingredients and got to work planning Bella’s birthday treat. After a quick trip to Target to buy a mini cupcake tin, I started baking.
About an hour later, her birthday cupcake was baked, iced and ready to serve. Despite its small size, it was a huge success – she loved it!
As soon as I saw how much she loved her treat, you could say I became a little obsessed with making wholesome, healthy treats for her. Soon, I started gifting them to friends and family.
I went from developing a single cupcake recipe to developing over 20 different dog treat recipes – everything from treat bones to cookies to brownies to cakes!
Pretty soon, the friends and family who were on the receiving end of my gifts were saying: ‘Kristin, our dog(s) LOVED your treats. Can we buy some to gift? Can my friends/family/co-workers/neighbors buy some?’
With those questions, Diva Dog Bakery™ was born!
My little ‘obsession’ quickly became a side hustle, first bringing in $100 to $200 a month, then over $500 a month, just selling through word-of-mouth.It was the easiest money I had ever made!
In a serendipitous turn of events, I ended up losing my 9-5 job a few months after I started Diva Dog Bakery™. It was during the Great Recession, so I couldn’t find a job in my industry anywhere. My unemployment checks weren’t enough and I was quickly going through my savings.
I was initially stuck in a ‘dog treat bakery = side hustle’ mindset, so it didn’t immediately occur to me to try to turn my side hustle into a full-time business. But when my money was drying up, it finally clicked: I can turn this into a full-time business!
I went all-in on my bakery and hustled hard. I sold at multiple farmers markets every Saturday (shout-out to my parents who helped me ‘be’ in multiple locations at once!), started a successful Etsy shop and also sold products wholesale.
Pretty soon, I went from going broke to making a solid $3,000 to $4,000 per month… despite the economy being in the biggest downturn since the Great Depression.
Needless to say, I was ecstatic!
The especially exciting thing about my earnings is this was nearly ten years ago when the dog treat industry wasn’t nearly as hot. These days, my efforts could easily bring in double that!
The Opportunities in the Dog Treat Industry (Why You Should Start a Dog Treat Bakery)
When I first started my dog treat bakery, the idea of buying homemade cupcakes or brownies or cookies for your dog was still considered a little ‘out there.’
These days, dog owners are much more tuned in to the idea of pampering their pooches and they’re willing to spend money to make it happen.
Here are a few interesting stats for you:
The dog treat market is incredibly hot right now and getting even hotter… to the tune of almost 7 BILLION dollars in sales in just 2020 alone! (source)
Over six out of ten dog owners are concerned about the safety of the dog treats they purchase. (source)
Dog owners are especially interested in purchasing dog treats with wholesome, easy-to-pronounce ingredients. (source)
It’s never been a better time to get started with a homemade dog treat bakery!
How Much You Can Earn Baking Dog Treats at Home
If you just want to run a fun-but-profitable hobby, you can easily earn $500 to $1,000 a month with a dog treat bakery as a side hustle.
At this level, you can do all of the work yourself in just a few hours a week. If you have kids, you can also have them pitch in. A dog treat bakery is a great family business!
If you want to turn your dog treat bakery into a full-time business, you can scale it into four figures a month, or even five figures a month.
If you want to scale your dog treat bakery into a full-time business, expect to work 30 to 35 hours a week yourself. If you want to have a heavy farmers market presence, you will probably need to bring on some help for a few hours each week so you can have a presence at multiple farmers markets at the same time. (The best ones are usually on Saturday mornings.)
If things get really busy, you can bring on baking help, marketing help, shipping help and more! You can make this business as big (or as small) as you’d like.
Where to Sell Your Dog Treats
As I mentioned at the beginning of this post, you can run your dog treat baking business in a way that suits your lifestyle. You can run it offline, online, or both!
There are so many ways and places to sell your treats, but here are a few ideas to get you started.
Wholesale to local businesses (e.g., pet stores, veterinarian offices, gift shops)
Online:
Etsy shop
Social media for local sales
Social media for nationwide sales
How Much Does it Cost to Start a Dog Treat Bakery?
Like nearly all businesses, starting a dog treat bakery comes with a few start-up costs, but you will easily earn these back when sales start coming in, or you can even take pre-sale orders! (Have I mentioned that the profit margin on dog treats is amazing?!)
Typical start-up costs for homemade dog treat bakeries in the U.S.* include:
$20 to $50 for the initial ingredients, plus a few inexpensive baking tools if you don’t already have them in your kitchen
$0 to $75 for treat packaging costs
$25 to $50 for a business license
Between a $25 one-off fee to up to a $50 per-treat fee to register your treats with your state – this will depend on your state’s regulations
*Costs and laws outside of the U.S. will vary from what is listed here.
Are Dog Treat Bakeries Regulated?
Yes, but not nearly as much as‘people food’ bakeries. (Good for would-be dog treat bakers, but a little sad for our furry friends!)
In the U.S., the exact regulations you will need to follow are decided by your state and sometimes your local area (e.g., county, city). This is easy information to find out by contacting the following agencies:
State department of agriculture or feed control office
State and local health departments
You can also contact your state’s business agency and tell them you want to start a pet treat bakery. Many states have information on file about pet treat bakeries that tell you everything you need to do.
Don’t be intimidated by this process – in most cases, all you have to do is fill out a few forms and pay a few small registration fees!
How to Get Started as a Dog Treat Baker
When I first started Diva Dog Bakery™, I honestly had no idea what I was doing.
Although I saw success pretty quickly, there was a lot of trial-and-error because I had no one to guide me. I didn’t know anyone who owned a bakery, let alone a dog treat bakery.
The one thing I definitely did right at the beginning – and what I recommend to you if you want to become a homemade dog treat baker – was to spend some time in the kitchen learning how to make treats.
Because I wasn’t much of a baker (and maybe you aren’t either), getting a little baking experience under my belt was very helpful.
I also tested out my treats on my dogs and the dogs of some of my friends and family. Dogs may not be able to talk, but you can tell pretty easily which treats they love eating and which treats they’ll turn their nose up at!
With this data, you can start to package up and sell the most-liked treats. You can scale it from there and start to build up your business.
If the idea of going it alone on a dog treat bakery business sounds a little intimidating, I’d like to welcome you to join the Diva Dog Bakery™ course where I’ll teach you exactly how to build a thriving dog treat bakery business!
Here’s what the course covers:
How to best make and store dog treats (this is where you’ll practice your baking techniques)
How to turn your hobby into a legal dog treat business
How to package your treats beautifully without hours of effort (beautifully packaged treats command premium prices!)
How to price your dog treats so you maximize your revenue
Where to sell your dog treats: offline, online or both
The best methods for accepting payment
How to most efficiently and inexpensively ship and deliver your treats
The best ways to promote your business so you build up a following of raving fans and repeat customers!
You’ll also receive valuable bonuses, including:
My full dog treat recipe book, which includes the most popular and profitable recipes I used in my bakery
Guaranteed analysis/nutrition labels to use on your treats (required by certain states)
30 days of free access to the Diva Dog Bakery™ Community so you can get all of your questions answered while you grow your business, including live training
It has been so exciting to help new dog treat bakers launch their businesses! Cheering on every baking success and every business success is truly the best part of my day.
Lessons Learned from a Cupcake… and a Phone Call
I like to say that Diva Dog Bakery™ started with a cupcake.
But it really, truly started when, after gifting treats to friends, one of those friends called me and said: ‘Kristin, can I buy a bag of your dog treats?’
Until that moment, I had no idea that anyone would actually want to pay for the treats I had been making as a labor of love.
I learned a valuable lesson that day: there is a market out there for so many different products and services. Whether it’s a product or service that we dream up on our own or that we learn from a course, there is probably someone who wants to buy it from us.
We just have to figure out a way to make that sale happen… and then make it happen again and again!
Dog Treat Bakeries are a Great Business to Start
If you’re interested in starting a business that’s ‘outside the box’ of the typical online businesses, then I highly recommend starting a dog treat bakery.
The industry is booming, the work is enjoyable, the profit margin is fantastic and (maybe the best reason of all) you have the cutest customers!
To get started on your dog treat bakery journey, I’m offering a free dog treat bakery workshop! Check out the sales page here and sign up for the free workshop.
If you have any other questions about starting a dog treat bakery after watching the workshop, just email me and I’d be happy to answer them.
Are you interested in starting a dog treat bakery?
The post How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!) appeared first on Making Sense Of Cents.
Austerity policies are nothing new. But talk about them in the news has recently escalated. In response to its ongoing debt crisis, the Greek government is preparing to implement austerity measures aimed at helping the country regain its financial footing. If you didnât major in economics or you have no clue what austerity means, read on to find out how this fiscal program works.
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Austerity: A Definition
Trust us, austerity isnâtas complicated as it sounds. Austerity is a type of economic policy that governments use to deal with budget deficits. A country faces a deficit whenever itâs using more money than itâs earning from tax dollars.
By taking on an austerity package, a government hopes to reign in its spending, improve the status of its economy and avoid defaulting on its unpaid debt. Governments usually take on austerity measures in order to appease their creditors. In exchange, these lenders agree to bail out countries and allow them to borrow more money.
If you look up the word austere in the dictionary, youâll see that it means severe, grave, hard, solemn and serious. Indeed, austerity is nothing to joke about.
Austerity Measures
Austerity plans normally involve increases in different taxes, (property taxes, income taxes, etc.) budget cuts or a push to incorporate both. Government workers could lose their jobs or see their wages and benefits either decline or become stagnant. Hiking up interest rates, adding travel bans and keeping prices at a fixed level could be other strategies put in place to reduce spending.
Naturally, austerity measures typically arenât viewed in the best light because they mean that there might be fewer government programs available to the public. Aid for veterans and low-income families, healthcare coverage and pensions are some of the benefits that normally take a hit when a countryâs using an austerity package. Government services that arenât eliminated might not be as comprehensive or as beneficial as they once were.
As you can see, in an austere environment, conditions are tighter overall. Historically, austerity has been implemented in the US during tough times including World War I, World War II and the Great Recession of 2008.
Greeceâs new austerity package â which government lawmakers finally accepted in July 2015 â will feature less government funding, higher taxes and cuts to pension plans. As a result of this deal, the country was allowed to begin talks with its creditors about a third bailout.
Related Article: All About the Greek Debt Crisis
The Problems With Government Austerity
Experts on the economy tend to go back and forth about how effective austerity can be. Some believe that instead of turning to austerity, the government should pump out more money and borrow as much as possible if an economy is on the rocks.
From a political standpoint, austerity is often controversial and results in riots and demonstrations. Anti-austerity protests erupted in Greece, where quite a few folks say that past austerity programs have only made social and economic conditions worse.
Beyond slowing down the economy, an austerity bill can cause a country to remain in its debt crisis, particularly if itâs in the midst of a recession. As fiscal austerity decreases spending, GDP can go down while unemployment goes up. Consumers can get nervous and stop spending and investing their own money.
In short, austerity policies can make life even more difficult for people who are already struggling. Thatâs why governments tend to turn to them as a last resort if other strategies arenât working.
Why Austerity Might Not Be So Bad
Notable European creditors have argued that austerity can be beneficial to a countryâs long-term economic state. For instance, the International Monetary Fund (IMF) has previously reported that austerity has done more damage than anticipated. But the European Central Bank released a paper saying that austerity has been helpful, at least for some of the weaker eurozone countries.
In fact, austerity has helped strengthen the economies in European countries like Latvia and Iceland. Although Spainâs unemployment remains high, its economy is in better shape overall. Ireland has made considerable progress as well toward rebuilding its economy.
Proponents of austerity policies say that they can make investors feel more optimistic when a country is being run more responsibly. Austerity has the potential to bring a shrinking economy back to life as everyday citizens invest in the private sector instead of relying on support from the federal government.
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The US used austerity measures between 2010 and 2014. Not only were our policies harsher than those employed by the governments in the UK and other European nations, but our economy fared better than theirs.
The Takeaway
The point of austerity is to tighten the governmentâs belt, bring a countryâs debt back down to a more manageable level and stimulate an economy that has stopped growing. Countries generally try to meet these goals by cutting spending and raising taxes.
The debate over whether austerity works continues but one common theme has emerged. Timing matters. Some critics suggest that cutting too much too quickly during a recession can be painful. When introduced more slowly, however, (or when the economy is doing very well,) austerity measures can turn things around.
Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the authorâs alone, and have not been reviewed, approved or otherwise endorsed by the issuer.
If left unchecked, extensive amounts of credit card debt can cripple your finances. The good news is there are many ways to handle debt, though each requires a dedicated effort on your part. But if you can manage to consolidate credit card debt, you will reduce your burden relatively quickly. In the process, youâll avoid the exorbitant interest rates that accompany most credit cards. Below we take a look at some of the most effective techniques you can use to make this goal a reality.
Find Out Your Credit Score
Before you can work on improving your credit and minimizing your debt, you have to know where you currently stand.
Many credit card issuers allow cardholders to see their FICO® credit score free of charge once a month, so check out if any of your cards include that free credit score. The three major credit bureaus â TransUnion, Experian and Equifax â also give out free annual credit reports. If thatâs not enough, websites like Credit Karma⢠and Credit Sesame provide a free look at your credit score and reports as well.
It is vital to review your credit report with a fine-tooth comb to ensure the accuracy of the information. If you find errors be sure to let the credit bureau in question know so the issue can be eradicated as soon as possible.
Zero Interest Balance Transfer Cards
Although it might seem counterintuitive to apply for another credit card to lessen your debt, a zero interest balance transfer card could really help. These cards typically include an introductory 0% balance transfer Annual Percentage Rate (APR) for six months or more. This ultimately allows you to move debt from one account to another without incurring more interest. However, once the introductory offer concludes, any leftover balances will revert to your base APR.
These offers arenât totally free, though. Most cards also charge a balance transfer fee thatâs usually between 3% and 5% of the transfer. Even with this initial payment, you will almost always still save money over leaving your debt where it stands currently.
If you want to consolidate credit card debt, here are three different balance transfer credit cards you could apply for, with varying introductory interest rates and transfer fees:
Balance Transfer Credit Cards Card Intro Balance Transfer APR Balance Transfer Fee Chase Slate 0% APR for first 15 months; then 16.49% to 25.24% Variable APR, depending on your creditworthiness No fee for first 60 days; then $5 or 5% of each transfer, whichever is greater Citi Double Cash Card 0% introductory APR for 18 months from date of first transfer when transfers are completed within 4 months from date of account opening; then 15.49% to 25.49% Variable APR, depending on your creditworthiness $5 or 3% of each transfer, whichever is greater BankAmericard® credit card 0% APR for first 15 billing cycles; then 14.49% to 24.49% Variable APR, depending on your creditworthiness No fee for first 60 days; then $10 or 3% of each transfer, whichever is greater Take Out a Personal Loan
The thought of taking out another loan probably doesnât sound too appetizing to consolidate credit card debt. But a personal debt consolidation loan is one of the speediest ways to rid yourself of credit card debt. More specifically, you can use it to pay off most or all of your debt in one lump sum. That way, your payments are all merged into a single account with your lender.
The APR and length of the offered loan and the minimum credit score needed for approval are the main factors that should go into your final decision on a lender. By concentrating on these three components of the loan, you can map out what your monthly payments will be. As a result, you can more easily implement them into your financial life.
Applying for a personal consolidation loan can have a detrimental effect on your credit. Unfortunately, most institutions will run a hard credit check on you prior to approval. However, many online lenders donât do this, which might ease your mind depending on the severity of your debt situation.
These loans are available through a wide variety of financial institutions, including banks, online lenders and credit unions. Here are a few examples of some of the most common debt consolidation lenders:
Common Debt Consolidation Lenders Banks Wells Fargo, U.S. Bank, Fifth Third Bank Online Lenders Lending Club, Prosper, Best Egg Credit Unions Navy Federal Credit Union, Unify Financial Credit Union, Affinity Federal Credit Union Auto or Home Equity Loan
If you own assets like a home or car, you can take out a lump-sum loan based on the equity you hold in them to consolidate credit card debt. This is a great way to reuse money you paid toward an existing loan to take care of your debt. When paying back your auto or home equity loan, youâll usually pay in fixed amounts at a relatively low interest rate. Even if this rate isnât great, itâs likely much better than any offer youâd receive from a card issuer.
Equity loans are technically a second mortgage or loan, meaning your house or car will become the loanâs collateral. That means you could lose your house or car if you cannot keep up with your equity loan payments.
Create a Budget
To build a budget, you first need to figure out your approximate monthly net income. Donât forget to take into account taxes when youâre doing this.
You can then start subtracting your variable and fixed expenses that are expected for the upcoming month. This is where you will likely be able to identify where youâre overspending, whether itâs on food, entertainment or travel. Once youâve completed this, you can begin cutting back where you need to. Then, use your surplus cash to pay off your debt one month at a time.
It shouldnât matter if youâre dealing with substantial credit card debt or not. A monthly spending budget should always be a part of how you manage your finances. While this is likely the slowest way to eliminate debt, itâs also the most financially sound. At its core, it attempts to fix the problem without taking funding from an outside source. This should leave very little financial strife in the aftermath of paying off your debt.
Professional Debt Counseling
Perhaps since youâve found yourself in serious debt, you feel like you want professional help getting out of it. Well the National Foundation for Credit Counseling® (NFCC®) is available for just that reason. The NFCC® has member offices all around the U.S. that are certified in helping you consolidate credit card debt.
These counselors wonât only address your current financial issues and debt. Theyâll also work to create a plan that will help you avoid this situation again in the future.
Agencies that are accredited by the NFCC® will have it clearly displayed on their website or at their offices. If youâre not sure where to look, the foundation created an agency locator thatâll help you find a counselor nearby.
Borrow From Your Retirement
Taking money early from your employer-sponsored retirement account obviously isnât ideal. Thatâs means borrowing from your retirement is a last-ditch alternative. But if your credit card debt has become such a handicap that itâs affecting all other facets of your life, it is a viable option to consolidate credit card debt.
Because you are technically loaning money to yourself, this will not show up on your credit report. Major tax and penalty charges await anyone who has trouble making payments on these loans though. To make matters worse, if you quit your job or are fired, youâre typically only given 60 days to finish paying it off to avoid incurring a penalty.
Tips To Consolidate Credit Card Debt
If you take the time to come up with a budget, donât let it go to waste. While you might find it tough to stick to, especially if youâre trying to cut back, it is the best way to manage your money correctly. Even if a budget becomes habit, stay vigilant with where your money is being spent.
Although a financial advisor will cost money, he or she might be able to help you keep your finances in check while ultimately helping you plan for the future as well. However, if this isnât an option for you financially, stay on track with your NFCC® debt counselorâs plan.
There are so many ways to gain access to your credit score that thereâs virtually no excuse for not knowing it. It doesnât matter if you do it through one of the top three credit bureaus, FICO® or one of your card issuers. Just remember to pay attention to those ever-important three digits as often as possible.
Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the authorâs alone, and have not been reviewed, approved or otherwise endorsed by the issuer.
The rocker Jon Bon Jovi has relisted his rockinâ New Jersey estate. Now it comes with an important piece of information for potential buyersâa price.
The posh property in Red Bank, NJ, had previously been listed as “Price upon request,” when it debuted a year ago. Itâs returned to the market with an asking price of $20 million.
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Jon Bon Jovi’s New Jersey chateau (realtor.com)
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Living room (realtor.com)
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Family room (realtor.com)
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Kitchen (realtor.com)
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Patio with river frontage (realtor.com)
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Pergola and pool (realtor.com)
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Dining room (realtor.com)
Last year, when we asked brokers to give their best guesses on the mysterious number, estimates ranged from $14 million to $100 million.
So perhaps somewhere in the middle is about right for this cool chateau.
It was built in 1999 by the noted New York-based architect Robert A.M. Stern, former dean of the Yale School of Architecture, in a style that could be described as French chateau meets rocker-chic.
Known as High Point Estate, the Euro-inspired, six-bedroom residence is set on 15 lush acres, with 700 feet of Navesink River frontage. It’s located about an hour outside Manhattan.
The sprawling 18,000-square-foot design boasts âexceptional materials, museum quality craftsmanship and superb attention to detail,â according to the listing, which also notes that the grounds were originally designed by the influential landscape architecture firm Olmsted Brothers.
A gated entrance opens to reveal brick courtyards, French balconies, slate roofs, tall chimneys, and historic wrought-iron accents.
The expansive layout features a 50-foot living room with 12-foot ceilings, a grand fireplace, bookshelves, and parquet flooring, and includes a movie theater. The adjoining bar features river views.
The dining room was designed for a round dining table seating 18 people. The standout kitchen contains a brick barrel ceiling, with hand-painted beams, wide-plank wood floors and a large island, as well as a breakfast room that looks out to the river.
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Watch: Marc Anthony Hopes to Turn a Tidy Profit in Florida: $8 Million in 2 Years
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The family room includes beamed ceilings and a fireplace that doubles as an outdoor fireplace, with a pergola and seating area looking out to the pool and water.
The second floor includes the family wing, with a study, four en suite bedrooms, including a grand master suite with a balcony and spa bath. A second wing with a separate entrance, intended for staff or guests, includes two bedrooms, a bathroom, and a kitchen.Â
In addition, the grounds have a pool and two cabanas, an original carriage house from 1910, a pub with bar and pool table called the âShoe Inn,â as well as a dock and boat lift.
Meanwhile, a loft-style music studio is located over seven double-door garages below. Yet another building includes laundry, a workshop, and storage.
While the Jersey native is still looking for a buyer for his Garden State compound, that hasnât stopped the superstar from making other real estate deals.
Last summer, he sold an oceanfront in Palm Beach, FL, for almost $20 million that he had purchased just two years before, for $10 million, and totally rebuilt. The brand-new contemporary featured five bedrooms, five full bathrooms, and three half-bathrooms, within a little over 5,000 square feet of living space and ocean views.
On the same day as that sale, he splashed out $43 million for another beachfront abode down the street.
The even larger, 10,232-square-foot mansion features seven bedrooms, seven bathrooms, and five powder rooms. It was built in 2007, and its interior details include coffered ceilings, hardwood and marble floors, and intricate millwork. The property’s grounds, on an oversize lot, include a courtyard pool and cabana, as well as covered dining and lounging space.
Bon Jovi, 58, is the frontman and founder of the band Bon Jovi, formed in 1983. The Grammy-winning rock group has recorded 14 studio albums and sold over 100 million records worldwide.
Gloria Nilson with Berkshire Hathaway HomeServices Fox & Roach Shrewsbury holds the listing.
The post Jon Bon Jovi Finally Puts a Price on NJ Mansion: It’s Available for $20M appeared first on Real Estate News & Insights | realtor.com®.
What could be easier than getting a little money back on the things you buy every day? That’s how cash back credit cards work and what makes them appealing to some consumers.
Cash back cards come in a variety of flavors â bonus category, tiered rewards and flat percentage cash back cards â but they all pay you back. Flat percentage cash back cards are ideal for the âset it and forget it” crowd, but bonus category and tiered rewards cards can offer more rewards â if you’re willing to put in a little legwork to maximize your cash back in select spending categories.
Here we take a look at the different types of cash back cards and how they work, the key benefits of cash back cards, how to redeem cash back and how to choose the best cash back card for you.
See related:Â How to choose a credit card
How cash back cards work
So how do all of these cash back cards work? It’s simple: Cash back is essentially a rebate of a percentage of the purchases you make on the card. With flat-rate cash back credit cards, every purchase earns the same percentage cash back, while with category bonus cards and tiered bonus cards, different types of spending earn more cash back.
Card issuers can afford to pay cash back because merchants pay an interchange fee on each transaction. âWhen you pay a merchant $100 with a credit card, the merchant only receives about $97,â says Daniel Mahoney, a certified financial planner in Atlanta.
For example, a TV that costs $700 would net you $14 with a 2% cash back card. The merchant, meanwhile, paid a transaction fee of around $21 when you paid with your credit card.
âRewards or rebates may also be funded by deals between the credit card issuer and specific merchants,â Mahoney adds. An example of this is cash back earned through card-linked offers.
How do card issuers know what types of spending qualifies for which percentage of cash back? Merchant category codes are four-digit numbers denoting a business type, such as a gas station or grocery store. Merchant category codes are used by credit card networks to categorize and track purchases.
How to redeem cash back
There are a number of ways to redeem your cash back rewards, including as a statement credit, check or deposit to a bank account, toward travel, to purchase gift cards or merchandise or as a donation. How many options you have and what requirements must be met before you can redeem will vary from card to card and issuer to issuer.
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Statement credits are the most common cash back redemption method and, as the term implies, act as credits against your existing card balance. For example, if you earned $20 in cash back and redeemed your rewards as a statement credit, your card balance would be reduced by $20.
Statement credits give you a simple, convenient way to save money over time, but since they’re tied to your card account, they offer a bit less flexibility than “true” cash back in the form of a check or direct deposit, which you can save or spend however you like.
Generally speaking, redeeming your rewards is as simple as choosing your redemption method, specifying the amount you want to redeem and hitting submit. Some cards also offer automatic cash back redemption in the amount and via the method you specify once you’ve reached a specific earnings threshold.
While statement credits, checks and direct deposits tend to get you full value for your rewards (with $1 earned yielding a $1 credit or direct payment), other redemption methods like gift cards and donations may only net you a fraction of your rewards value.
On the other hand, pairing a cash back card with a higher-tier travel or rewards card can sometimes boost the value of your cash back rewards, as in the case of the so-called “Chase trifecta“.
Check with your card issuerâs rules on cash back redemption amounts and options, as some cards offer more restrictive redemption schemes than others. For example, while a card like the Chase Freedom Unlimited allows you to redeem your cash back as a statement credit, check or direct deposit in any amount, anytime, the Costco Anywhere Visa® Card by Citi only issues rewards annually as a certificate with the February statement.
Benefits of cash back credit cards
Along with the obvious benefit of allowing you to earn a bit of money back on most â if not all â of your spending, cash back cards offer a number of advantages for experienced and newbie cardholders alike.
To start, cash back cards can offer more simplicity than other rewards credit cards. Since you get back a percentage of your card spend, you’ll always have a pretty good sense of how much money you’re earning. Cards that earn points or miles, by contrast, often require you to calculate point values and weigh redemption options to be sure you’re getting the most out of your rewards.
âThe primary benefit of a cash back card is the simplicity,â says Roman Shteyn, owner and CEO of RewardExpert.com.
âYou donât have to think too much about how much youâre earning while using the card, and when it comes to redemption, the best cash back credit cards are pretty straightforward. Most people just deduct their cash back from their statement balance or redeem for gift cards.â
Cash back cards also stand out as a low-effort savings tool. Indeed, the typical savings account earns a measly 0.05% annual yield, while nearly all cash back cards offer at least 1% back on every purchase. Your return is even greater with cash back cards offering a flat 1.5%, 2% or more on every purchase.
And unlike the interest on your bank account, cash back comes tax-free.
âThe IRS has historically viewed credit card cash back as a nontaxable rebate on the purchase price, rather than as a taxable form of income,â says Mahoney.
Something else to think about: Cash back, if loaded back on your card, also earns its own cash back when you spend it, adds financial planner Andrew Feldman of Chicago. âItâs a fraction, but itâs still a little more cash,â he says.
Factor in that some cash back cards offer sign-up bonuses of $150 or $250, and that is even more cash for you for using the card.
See related:Â Cash back vs. points
Types of cash back cards
There are three main types of cash back credit cards: Category bonus cash back cards, which offer a high cash back rate in spending categories that change throughout the year; tiered rewards cash back cards, which offer consistent cash back in specific categories of spending; and flat-rate cash back cards, which get you cash back at the same rate on all purchases.
Category bonus cash back cards
Overview: Category bonus cash back cards offer the lure of 5% cash back from revolving spending categories. These categories are typically set by the issuer every quarter and are usually released a few months before the new quarter starts. Five percent back can be a nice haul if youâre able to max out the spending categories each quarter, but it takes a bit of work.
First, you have to register for the bonus categories every three months, and spending in the categories is capped at a set amount each quarter (typically $1,500 in purchases). Since any purchase not in the bonus category earns 1%, you may not be getting the average return you think you are.
Pros:Â These cards allow you to earn cash back at an impressive rate in a variety of different spending categories, which could be ideal for cardholders whose spending varies from month to month. If your spending habits are flexible and you’re strategic about when and where you buy, category bonus cards can offer lucrative returns.
Cons: They can be a headache to keep up with, often requiring you to manually enroll in a category each quarter and track your spending to ensure you’re maximizing your cash back in a given category. You’re also at the mercy of the issuer when it comes to which categories are eligible for bonus rewards, and categories may not line up with your spending habits or may be tough to maximize.
Top cards: Discover and Chase each offer popular category bonus cards, including the Discover it® Cash Back, Discover it® Student Cash Back and Chase Freedom Flex cards.
The Discover 2021 bonus categories have already been released and include grocery stores, gas stations, wholesale clubs, restaurants and online shopping at stores like Amazon, Target and Walmart. Chase Freedom Flex bonus categories, on the other hand, are only announced on a quarterly basis.
The U.S. Bank Cash+ Visa Signature Card is a variation on the rotating bonus category theme, but the cardholder picks the bonus categories that will earn the most cash back for the types of purchases they make most.
See related:Â Chase Freedom Flex vs. Discover it Cash Back
Tiered rewards cash back cards
Overview: Like category bonus cards, tiered rewards cards offer more cash back in select spending categories, but to maximize your earnings you have to think about which card to use with each purchase.
For example, Feldman puts all his business expenses on his tiered rewards American Express SimplyCash Plus business card and his own personal expenses on a Citi® Double Cash Card that delivers a flat 2% (1% when you buy and 1% as you pay for your purchases).
His Amex business card rewards 5% on office supply stores and wireless telephone service, 3% on gas (cardholders choose from eight categories for this tier) and 1% on everything else.
At the end of each year, Feldman calculates the rewards delivered on the total amount he spent. He says both of his cards end up delivering the same cash back on average.
âThe Amex works out to about 2%, maybe slightly under,â Feldman says. âI just donât spend enough on office supplies to max out that 5% category.â
âCould I get back another couple dollars at the end of the year by using a credit card targeted to each category of my spending?â Feldman asks. âItâs possible, but Iâd have to think about which card to use every time I made a purchase and that would make my life crazy.â
Pros: Tiered rewards cash back cards may offer a bit more consistency than category bonus cards, as bonus categories are the same year-round. You’ll know before you apply if an elevated rewards rate in a given category like travel or dining makes sense based on your spending, and you can pair a tiered rewards card with a flat-rate card to ensure you’re maximizing your earnings.
Cons: These cards tend to earn a low rate on general purchases, and people often overestimate how much they spend in a given category, like gas or airfare. You’ll have to take a close look at your spending habits to determine whether a tiered bonus category card really makes sense for you or if you’d be better off with a card that earns the same flat rate in cash back on every purchase.
Top cards: While the best choice for you will depend on how you spend, one of our top picks is the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 6% back on select U.S. streaming service subscriptions, 3% cash back at U.S. gas stations and 1% cash back on all other spending.
Supermarket purchases make up a big chunk of the average person’s spending habits, so a card that offers bonus rewards in this category should be useful to the majority of cardholders.
Flat-rate cash back cards
Overview: With simple cash back cards, also called flat-rate cash back cards, you earn a flat percentage with every purchase. Thereâs no need to track and activate bonus categories. You earn the same cash back on every purchase.
Mahoney carries the Bank of America® Travel Rewards credit card which earns 1.5 points per dollar (effectively 1.5% cash back) plus a 75% bonus for being part of the bankâs Preferred Rewards Platinum Honors program.
âThatâs effectively 2.625% cash back*,â Mahoney says (2.625% cash back referencing 1.5 points per dollar plus 75% boost for Preferred Rewards program). âThe caveat is the cash back must be used as a reimbursement for travel purchases**, but lots of things count for that, even Uber and Lyft.â
Feldman recently switched from the Capital One Quicksilver Cash Rewards Credit Card, which offers 1.5% cash back, to the Citi® Double Cash Card, which earns up to 2% cash back (1% when you buy and 1% as you pay for your purchases).
Why did he switch? â2% is better than 1.5%,â he says.
Also, âI miss the convenience of being able to log in and get my rewards in one sweep or set it up for an automatic $25 or $50,â he adds. âI like to cash in my points immediately so I donât forget about them.â
Frequent-flyer expert Gary Leff likes the Fidelity Rewards Visa and Citi Double Cash cash back cards.
With the Fidelity Rewards Visa, cardholders earn 2% on all purchases, but you need to be a Fidelity account holder with excellent credit to qualify for the card.
âMost people arenât going to beat 2% cash back, even with travel rewards,â says Leff, who blogs at View from the Wing.
Pros:Â You won’t have to track spending or enroll in bonus categories. You can simply use your card for every purchase and rest assured you’re earning cash back at a consistent rate. This makes flat-rate cards ideal for those who want to avoid the hassle of juggling multiple cards or someone who’s looking to supplement their current tiered rewards or category bonus cash back card.
Cons: While these cards offer consistent rewards on every purchase, you may be missing out on bonus rewards in a category of high spend, like groceries or dining.
Top cards:Â A top pick in this category is the Citi Double Cash card, as it offers one of the highest flat cash back rates available, charges no annual fee and can pair with a premium Citi card to make earning travel rewards a breeze. It also encourages responsible card use by only giving you the second 1% back once you’ve paid off your purchases.
Types of cash back cards compared
We ran the numbers to see how flat rate, category bonus and tiered bonus cash back earnings would break down based on an average Americanâs spending (drawn from a Bureau of Labor Statistics consumer expenditures survey):
2% flat percentage
5% category bonus*
6% tiered bonus**
$21,897*** at 2%
$14,645 at 1% ($14.65)
$16,596 at 1% ($16.59)
$6,000 at 5% ($300)
$4,464 at 6% ($267.84)
$437.90 in cash back per year
$314.65 in cash back per year
$284.43 in cash back per year
* This assumes the category bonus cardholder maxes out the $1,500 in qualified quarterly spending, which is difficult to do every quarter.
** The Blue Cash Preferred from American Express offers 6% cash back at U.S. supermarkets and other tiered rewards, so total cash back will be higher.
*** This includes expenses on food, gas and oil changes, vehicle expenses, apparel and services, entertainment and other expenditures
â CreditCards.com research, March 2020
How to choose a cash back credit card
Which cash back card is right for you depends on how much thought you want to put into which card to use where.
While some cash back cards offer outsized bonuses on specific types of purchases or in rotating bonus categories, you’ll have to remember to use the right card at the right time and place. Not only will you need to pay attention to your account to see how your issuer categorized your purchase, but you may also need to manually enroll in a bonus category each quarter to reap the benefit of certain cards.
This makes such cards less than ideal if you’re looking for more of a “no-fuss” way to earn rewards. Additionally, most tiered and category bonus cards only get you 1% cash back on general purchases. This means that unless you spend heavily in a card’s bonus categories, you could be missing out on maximizing rewards on the majority of your spending.
Flat-rate cards, on the other hand, may offer a lower rewards rate in a specific category like dining or groceries, but will help you score extra rewards on general purchases that don’t fall into a specific category, boosting your average cash back rate overall. This is why it’s also worth considering pairing a flat-rate cash back card with a tiered bonus card that fits your spending habits.
Bottom line
Whether you opt for a flat-rate, tiered rewards or category bonus cash back card, you can enjoy earning cash back on all (or nearly all) of your purchases, often with minimal effort.
You may be surprised at just how much 1% or more cash back adds up to at the end of each month. Just be sure to take a close look at your spending habits and each issuer’s terms to be sure the cash back card you’re considering is a good fit for you.
*2.625% cash back referencing 1.5 points per dollar plus 75% boost for Preferred Rewards program.
Queue the panic. Mortgage rates have officially spiked and the media is all over it. Yep, the average rate on a 30-year fixed mortgage increased from 2.65% to 2.79% this week, per Freddie Macâs weekly survey. Freddie Mac Chief Economist Sam Khater noted in the weekly news release that mortgage rates have been under pressure [&hellip
The post Donât Freak Out About the Recent Mortgage Rate âSpikeâ first appeared on The Truth About Mortgage.
Yet another year is about to come to an end, and that means it’s time to look ahead to what next year has in store. I think just about everyone wants to see the back of 2020, though it wasn’t all bad news. The housing market actually held up surprisingly well, and mortgage lenders enjoyed [&hellip
The post 2021 Mortgage Rate Predictions: Mostly Flat But More Record Lows Possible first appeared on The Truth About Mortgage.
I have five years until I retire. I have a nest egg of $1 million and will also have a monthly military pension of approximately $6,000, and Social Security on top of that.
I like cycling 60 miles a day and want to retire in a place that is known for good, safe cycling. I hate hot humid weather and donât want a lot of snow. I love craft beer. And I would prefer a place with limited or no income tax on a military pension.
Where should I retire? Fort Collins, Colorado, and Asheville, N.C., seem like good places, but the cost of living in Fort Collins seems above average, and I am told Asheville has a lack of housing.
What other places should I consider and how do they compare with the two locations already mentioned? My wife likes the sound of âthe Hill County in Texas,â but she knows the heat is bad.
Charles
Dear Charles,
The Fort Collins and Asheville areas sound lovely. And popular places tend to be more expensive â thatâs just the reality of supply and demand. If thatâs where you want to be, the trade-off might be as simple as a smaller house/condo/rental.
You also could seek cheaper housing a bit further from these two cities â Greeley, Colo. (donât believe everything about the smell), or Hendersonville, N.C. (recommended here), for example. Or what about Raleigh-Durham, with the American Tobacco Trail as the trail networkâs spine? Youâd have to accept more humidity with that one, however.
I started my search by looking at the League of American Bicyclistsâ bicycle-friendly communities. Five, including Fort Collins, are platinum. Housing in only one is cheaper than Fort Collins, but I donât think youâll appreciate the snow in Madison, Wis. I ruled out Davis, Calif., because the state is one of seven that taxes military retirement pay in full. (It doesnât tax Social Security checks, though.)
So I looked further down the list while taking weather and taxes into consideration. You can estimate your state taxes using this calculator, but you may want to verify that with a tax professional.
Iâve described three suggestions for you below. Boise (a silver-level BFC) and Corvallis, Ore. (a gold BFC), recommended here and here, may be other places to consider.
As always, taxes, housing costs, the number of craft brewers and even bike-friendliness can change over the next five years. And some of these places may not mesh with whatever your wifeâs wish list includes.
Another piece of advice: Be sure to experience a place in all weather, or at least the worst season, to make sure itâs a fit. Data can only tell you so much. Consider renting, at least at first. Your pension and Social Security may cover your regular expenses, but donât make yourself house-poor.
Equally, state income taxes arenât always everything. Virginia, which does tax retirement pay, is rated the best state for military retirees according to this survey and scores second-highest for the âeconomic environment,â behind Alabama.
Why not check out your shortlist on a bike tour?
A kayaker and a paddleboarder in Meadâs Quarry, part of the Ijams Nature Center in the South Knoxville section of Knoxville, TN.
Justin Fe/Visit Knoxville
Instead of Asheville ⦠Knoxville, TN
Asheville is one of Americaâs premier craft beer destinations, but Knoxville has an above-average number of breweries too. By moving here, youâd get a city twice the size (nearly 190,000 people) and the stateâs flagship university (33,000 students and the potential for practically free classes starting at age 65). Youâd be in a valley with the Smoky Mountains visible to the east; Ashevilleâs elevation is more than 1,000 feet higher. Average July highs would be a couple of degrees warmer than in Asheville, and January highs would be a couple of degrees cooler, but a little less snow.
Knoxville is a bronze-level bike-friendly community, as is Asheville. Check out bike rides that tour the breweries. You can also join BikeWalk Knoxville on one of its rides to explore the city.
Tennessee has been reducing its state income tax and will abolish it at the end of 2020. North Carolina will give you a more modest break on your pension and tax your Social Security check.
Housing is much cheaper in Knoxville than in Asheville, whether buying or renting. Hereâs whatâs for sale in Knoxville now, using listings from Realtor.com (which, like MarketWatch, is owned by News Corp.
And hereâs Asheville.
You can flip to the rental market for both.
âââ
A sunrise near Wenatchee, WA
Wenatchee Valley Chamber of Commerce
Instead of Fort Collins ⦠Wenatchee Valley, WA
The Wenatchee Valley is a bronze-level bicycle-friendly area of 67,000 people in central Washington, so far from Fort Collinsâ platinum status and even smaller than Asheville. The city of Wenatchee has nearly 35,000 residents, and the narrow, 50-mile-long Lake Chelan is an hour away. This is an agricultural area â fruit is a big crop, and thereâs wine, too â so you should have plenty of rural roads to pedal on. Yes, youâll also find craft brewers
Washington state doesnât have an income tax, so Wenatchee checks that box. Colorado offers some tax breaks on both military pensions and Social Security.
The Wenatchee area is more affordable and less busy than Fort Collins, which you should think of as a cheaper(!) version of Boulder. Fort Collins has 170,000 people, plus there are almost another 80,00 in neighboring Loveland and 110,000 in Greeley. The plus side is that it gives you a broad range of neighborhoods and prices.
Average summer highs in Wenatchee are in the mid-80s; average highs in the winter are just above freezing. Fort Collins is a touch cooler in the summer and warmer in the winter. Youâd get little rain, unlike cities on the other side of the Cascade Mountains, but expect 7 to 9 inches of snow on average in December and January. Despite its higher average temperatures, the snow starts earlier in Fort Collins, lasts longer and you get more of it.
You will find plenty of retirees around Wenatchee. Nearly 20% of Chelan Countyâs 77,000 residents are 65 or older, according to the Census Bureau. Fort Collins comes with Colorado State University.
If Wenatchee looks too pricey, check out Spokane, another bronze-level BFC. Itâs far bigger, with about 225,000 people (and 525,000 in the county), and has more craft brewers. The drawback is more snow. If you want to go smaller, Ellensburg, about 90 minutes south of Wenatchee, is a silver-level BFC and a touch cheaper than Wenatchee.
Hereâs whatâs on the market in Chelan County.
This is what the housing market looks like in Fort Collins, Loveland and Greeley.
Indiana University’s Little 500 bike race.
Visit Bloomington
Wild card: Bloomington, IN
If you like older biking movies, you know this town of 85,000 people from âBreaking Awayâ and the Little 500 bike race. But did you know the home of Indiana University is a gold-level bike-friendly community?
And weâre not talking about just biking past miles and miles of corn fields on those 60-mile rides. (That would be retiring near rival Purdue University in West Lafayette, a bronze-level community.) Southern Indiana is hilly â test yourself on the brutal Hilly Hundred weekend ride outside of town during peak foliage. Others might prefer the all-terrain Gravel Grovel through the Hoosier National Forest. To chill, take the 9.2-mile trail that runs from the north end of town to the limestone quarry on the south side.
For beer, check out Upland Brewing, which won a gold medal at the Great American Beer Festival in 2019. Six more gold-medal winners are in Indianapolis an hour to the north.
Indiana is changing how it taxes military retirement pay; your pension should be exempt as of 2021. The state also doesnât tax Social Security income.
Temperatures in Bloomington reach an average of 86 in July, while January means an average high of 37 and about 5 inches of snow. If you want to hang out on campus, seniors get 50% off tuition, and the break starts at age 60.
Here are homes on the market now.
The post Iâll Retire With a Military Pension and Want to Move to a Bicycle-Friendly, Beer-Loving PlaceâSo Where Should I Go? appeared first on Real Estate News & Insights | realtor.com®.
When I got my first apartment after college, I needed my mom to co-sign my lease.
The landlord required proof that I made three times the rent, but since I wasnât making nearly enough, I called Mom to sign on that second dotted line.
Then, in my mid-20s, when I bought my first condo, I needed a co-signer again. Once again, my mom was there for me.
Now I’m almost 30, married, and expecting our first child. Both my husband and I are gainfully employed and have good credit histories, so you’d think we wouldn’t need any parent co-signing for us to rent a home! But alas, we’d recently moved to New York City, where rents were so high, snagging a half-way decent apartment would require Mom to co-sign once again.
What’s going on? Would I need my mother to co-sign forever?
Of course, I feel lucky to have a parent whoâs so supportive. But I canât help but think that thereâs something wrong with me, where I was choosing to live, or perhaps the housing system in general.
So, I started looking into why co-signing is so often required, even in cases where it seems unnecessary. Hereâs what I learned, and some words of wisdom from experts that could help you get through the inconvenient (and embarrassing) cycle.
Why co-signers are required
What bothered me most about needing a co-signer was that I felt like I wasnât being taken seriously as a tenant. I had a good job and a college degree, why couldnât I be trusted to pay my rent?
As it turns out, many people face this problem.
While landlords may have differing requirements, the industry standard is that your take-home income must be three times what you pay in rent. So if you make $3,000 a month, your monthly rent should not exceed $1,000.
But is this realistic with today’s runaway rent prices?
For instance, in 2013, as a fresh college graduate, I paid $1,600 a month for a one-bedroom, third-floor walk-up in Los Angeles. So based on the three-times rule, I should have been earning $4,800 a month, or $57,600 a year.
A salary that size was an unattainable dream for me right out of college. Even though I had a great sales job and a minimum-wage side hustle, I was making only about twice the annual rent, or $40,000.
And I was one of the lucky ones. The minimum wage in California is $12 an hour, but in 2013 it was $8. To afford a monthly rent of $1,600 in 2013, a minimum-wage worker would have needed to put in 150 hours a week.
Is the three-times rent rule realistic?
Because I needed a co-signer, I couldn’t help but wonder about the three-times rent rule, and the reason for it. Did this mean I’d overextended myself?
As it turns out, I had no reason for worry. With a monthly rent of $1,600, I had another $1,600 left for other expenses, and it was more than enough.
So I started wondering: If twice my income worked just fine for my bills, why do landlords want proof that renters make three times their rent?
âThe exact origins of the three-times rule is unknown,â says Michael Dinich of Your Money Geek. Nonetheless, this rule has remained the industry standardâfor renters and home buyers alike.
âMortgage lenders have often used the guideline that housing costs should be no more than 30% of income,” Dinich says. “The three-times rule is likely a handy approximation based on those old guidelines.â
This guideline may even contribute to younger generations’ low rates of homeownership.
âThe income of many people, particularly younger adults, has not kept up with home prices in many areas,â says Andrew Latham, managing editor of SuperMoney. “This is why millennials have lower homeownership rates than previous generations.â
Plus, experts say that most landlords (even the nice ones) donât necessarily care if people arenât making as much money as they used to. They care more about finding a renter who will be able to pay their rent on time. And if that means sticking to the tried-and-true method of renting to those who can prove they have plenty of income to spare, or can at least get a co-signer, theyâll do it.
How I pay my rent without a co-signer today
While it’s tough for young renters and home buyers almost everywhere to cover their housing costs, it’s even worse in New York City.
Sure, my mom agreed to co-sign the lease, as always. Yet with a baby on the way, my husband and I decided that, rather than taking my mom up on her kind offer, I’d try to find an apartment with a rent that fell comfortably within the three-times rule.
We started crossing things off our wish list. We moved our search from Manhattan to Brooklyn. We stopped looking at homes near subway stations and cute cafes and started touring apartments that were a bit farther out. In the end, we found a studio we liked, and the low rent didn’t require a co-signer.
The post Why I’m Grown-Up and Employed, but Still Need Mom to Co-Sign on My Home appeared first on Real Estate News & Insights | realtor.com®.
guarantees that they will beat any competitorâs locked loan estimate, or theyâll pay you $500.*
realtor.com, Max Mumby/Indigo/Getty Images
Visit Knoxville
Jillian Pretzel