Gunning Daily News
October 28, 2011 5:42 pm
Lately, you've been thinking a lot about investing strategies. You have a small nest egg that needs to grow, but frankly you don't trust the stock market. (If you're like many investors, your 401(k) hasn't fared well in recent years.) And while real estate has been somewhat of a rocky road in recent years, it's still a solid long-term investment strategy—and clearly we're in a buyer's market. But you aren't really interested in being a landlord. What to do?
Christine Karpinski has a suggestion: Purchase a vacation home and rent it out to travelers.
"Vacation homes are almost always a good investment," says Karpinski, director of Owner Community for HomeAway—te the world's leading vacation rental marketplace—and author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, 2007, ISBN: 0-9748249-9-2, $26.00).
"First, if you're looking for a good long-term investment, real estate tends to be a good bet," she adds. "Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own. And finally, there has never been a better time to buy a vacation home—it's like the planets have all lined up perfectly."
Karpinski, who owns vacation homes in several parts of the country, says she herself is looking for new properties to invest in. Overall, she says, the vacation home rental market is a burgeoning segment of the economy.
Want to know more? Read on for a few reasons why there's never been a better time to go vacation rental house hunting:
There have never been so many properties on the market. For potential home buyers, there is a silver lining to the slow economy and the housing crisis: Most vacation markets are chock-full of buying opportunities. Once you've pinpointed the vacation rental market that is right for you—The coast? The mountains? A ski resort area?—you will likely have a lot of properties to choose from.
"There are many properties available right now in many different areas," says Karpinski. "Once you start hunting, I think you'll be pleasantly surprised at what you find. But I must offer one caveat: Before you let yourself fall in love with a property, make sure it is legal to rent it out as a vacation home. Some areas and homeowners' associations do not allow short-term rentals."
Prices aren't going to get much better. In fact, they're the lowest they've been in five to ten years. If you're pretty sure you want to buy a vacation home "someday," you might want to quit procrastinating and pull the trigger, says Karpinski.
"Prices should increase eventually," she points out. "Now is the perfect opportunity to make a really sound investment. In fact, speaking from my own perspective, I'm afraid that if I don't take the plunge now, I'll look back ten years from now and say, 'Why the heck didn't I buy back in 2010?'"
Interest rates are very favorable for purchasing. Today, mortgage interest rates are low. Bottom line: Take advantage of them while they last.
These days, you have access to the best real estate professionals. Anyone connected to the housing market who managed to survive the housing crash had to be at the top of his or her game. That means the agents left standing today—including the ones you'll be working with in your search for the perfect vacation home—are possibly the best of the best.
"Quite simply, the real estate professionals still working today are the top in the business," says Karpinski. "And because vacation home renting has become so popular, they are more knowledgeable than ever. Use their knowledge to your advantage. They are at your service when it comes to helping you hunt down the best property for you."
It's never been easier to rent your vacation home. As mentioned earlier, vacation home rentals have never been more popular. More and more consumers are choosing to stay in cozy condos, cabins, and chalets instead of cramped, impersonal hotel rooms when they travel. And as market demand has surged, organizations have sprung up to help connect vacation homeowners with these potential renters.
If you buy now, you can be ready for the 2011 peak season. It's true that the longer you wait to buy, the likelier it is that interest rates could rise. But there's another reason not to procrastinate: If you buy now, you'll have time to get your property ready for peak rental season. Experienced vacation homeowners often find that the rental fees generated during the twelve weeks between Memorial Day and Labor Day pay their mortgages for an entire year—and most inquiries come in between January and March.
"Even turnkey properties aren't really turnkey," notes Karpinski. "To get your property up to your standards, there will very likely be things that you will want to spruce up. Rooms might need repainting. Decorating will need to be done. And the yard might need some work. By buying now, you will have a cushion of time to get the home ready for your guests, take great photos for your property listing, and start marketing it to potential renters."
"Someone is going to be smart enough to take advantage of the great buying opportunities available today," says Karpinski. "That person might as well be you."
October 28, 2011 5:42 pm
According to a recent SEI publication, many wealthy parents are waiting until their children are well into adulthood before discussing how they should use their inheritance. In fact, SEI ran a recent survey that showed that just over a third (36 percent) of wealthy parents have discussed their wealth and its implications with their children before the age of 21.
SEI reports that only 16 percent of wealthy families have had that discussion with children before the age of 16. The survey results point to a growing wealth communication breakdown in high-net-worth families—one that many believe is inhibiting the ability of future generations to sustain long-term wealth.
According to the company, their survey—which polled more than 100 individuals representing families with an average net worth of more than $20 million—was carried out by independent research firm Scorpio Partnership. It highlighted a significant communication barrier between current and future generations related to the challenges and expectations of wealth. The majority of those polled (51 percent) said they have strong expectations for how family members use the wealth they will inherit, yet only 19 percent said they have communicated their hopes and fears about wealth to their families. Only 11 percent of respondents believe their children have communicated their hopes and fears about the family's wealth with them.
"There is a communication breakdown in many wealthy families that must be fixed if future generations are going to sustain wealth for the long term," said Michael Farrell, Managing Director for SEI Private Wealth Management. "Parents need to make talking about money a rite of passage with their children. The most successful families talk about finances early and often, making children feel involved, empowered, and better prepared for the future."
The survey showed that when families do communicate about their wealth the results are often positive. Nearly half of those polled (43 percent) described the experience of having their families involved in financial interests as fulfilling or liberating, while slightly more than a third (39 percent) described the experience as challenging, frustrating, or uncomfortable. When families do share information about financial matters it is mostly in informal settings. Seventy-one percent of respondents said family members were made aware of financial interests through general family conversations, while 18 percent said the conversations took place in formal family meetings, and 11 percent were made aware at private bank/investor meetings.
The survey results clearly suggest that many wealthy families lack the level of comfort or tools to effectively communicate on wealth issues with their children. To help facilitate healthier and more frequent family wealth conversations, SEI has compiled the following set of wealth-talk tips. The tips include:
Start Early -- It's never too early to start talking to your children about money. The subject matter and level of detail may change, but it's important to show children you are comfortable and approachable on the topic. Whether it's over a game of Monopoly or about a child's allowance, small conversations early will make the bigger talks you have to have later in life less daunting.
Initiate Conversations with Your Child -- If you wait for your child to start the conversation, it likely won't happen. Many children take a parent's silence on any subject, intentional or not, as a sign that the topic is off limits. Take the initiative to start a money conversation with your kids. It will break down the invisible sound barrier and lead to healthier wealth communication habits.
Communicate Your Own Values -- It's important that children understand their parents' values. Talk about what you want your wealth to do and what expectations you have for your children related to it. Sharing your values will help children embrace their own values and ultimately help create more productive financial behaviors.
Use Everyday Opportunities to Talk -- Money talk doesn't have to be confined to formal settings or family meetings. Talk about the issues and implications in the context of real life. Whether it's paying a restaurant check or monitoring the performance of your investments, use everyday occurrences as teaching opportunities. The frequency and practicality will serve your children better than any formal annual debriefing.
Don't Just Talk, Listen -- Wealth conversations or any effective conversation must be two-way. Don't mistake a lecture for a dialogue. Listen and respond to your children's questions, thoughts, and concerns. If they know you're listening they are more likely to open up, which will make the talks a lot more valuable.
The survey results are part of an ongoing series that SEI has developed in collaboration with Scorpio Partnership to help gain front-line insights on wealth goals, behavior, and issues of ultra-high-net-worth families.
For more information, visit www.seic.com.
October 28, 2011 5:42 pm
Multiple listing. Agreement that allows real estate brokers to distribute information on the properties they have listed for sale to other members of a local real estate organization. Allows the widest possible marketing of those properties. Commissions are split by mutual agreement between the listing broker and the selling broker.
October 28, 2011 5:42 pm
Q: Why do lenders require a down payment?
A: It protects them should you default on the loan, especially if you fail to make payments in the early years of the loan when more is owed on it. Foreclosure, property fix-up, and resale costs could result in a loss on the mortgage loan.
That is a bad situation the lender wants to avoid. So they have historically required cash down payments of 20 percent of a home’s purchase price.
However, if you purchase private mortgage insurance, the down payment requirement can drop to 5 or 10 percent of the purchase price.
Few lenders will lend the full value of a home unless they have special guarantees, such as that offered by the Veterans Administration (VA) under its mortgage assistance program.
October 28, 2011 3:42 pm
When it comes to setting healthy behaviors, many people have the best of intentions. However, due to hectic schedules, stress at jobs and a variety of other influential factors, many of these changes only last a few short weeks.
Most people know what they need to do to improve their health—taking steps like making healthier food choices and maintaining an active lifestyle. It's figuring out how to do these things and fitting these changes into the daily routine that can present the biggest challenges.
It takes 21 days to fully incorporate a new habit. In the grand scheme of things, 21 days is a small time period to make a healthy behavior a part of your life, and the boons are extensive. Maintaining a healthy weight and staying active can help lower risk for developing a number of illnesses, including diabetes, heart disease, hypertension and more.
Make a Plan
To reach your goal, you need a plan. How do you get started? Take these steps:
• Think about what is important to your health. What are you willing and able to do?
• Decide what your goals are. What changes do you want to make? Choose one goal to work on first.
• Decide what steps will help you reach your goal.
• Pick one step to try this week.
Ask yourself these questions to help you shape your plan:
• Why haven't I made this change before?
• What challenges stand in my way?
• How can I work around what gets in the way?
• What's my goal?
• What might get in the way of making this change?
• How can I plan ahead to make it easier to stick to my new habits?
• How will I reward myself?
Making healthy lifestyle choices is hard work. However, once you have your routine down, these healthy habits will become easier and easier to maintain, and the benefits—slimming down, gaining energy, cutting cancer risks, feeling healthier—are more than worth the extra effort.
October 28, 2011 3:42 pm
After a long day at the office or running after the kids, preparing a healthy and delicious meal may seem daunting. When you add in the time it takes to pick a recipe that everyone will enjoy, and go to the store for ingredients, just the thought of cooking a nutritious meal may be exhausting.
Bonnie Taub-Dix, MA, RD, CDN, author of "Read It Before You Eat It," director and owner of BTD Nutrition Consultants and former spokesperson for the American Dietetic Association, believes that cooking with simple and quality ingredients is critical to keeping your health in check.
"Learning to prepare a few quick and healthy meals will help you eat better and motivate you to continue to stay on track," says Taub-Dix.
To help you prepare smart, quick and simple meals your family will enjoy, Taub-Dix offers these tips:
• Use what you like. Pick a few meals that you enjoy eating out and learn to make them at home using fresh vegetables, lean meats and reasonable portions.
• Frozen zone. Stock your freezer with healthy, frozen vegetables and all-natural, lean meats without preservatives so you can always have healthy options on hand. Perdue's new breaded line of chicken, including SIMPLY SMART® Lightly Breaded Chicken Filets, have up to 40 percent fewer calories, 50 percent less fat and 25 percent more protein than the USDA standard for breaded chicken.
• Keep an eye on the details. Make sure to shop at well-maintained stores with quality produce. Ask your local grocer about the temperature settings they use to store refrigerated and frozen items.
• Know your food. Ingredient lists can be hard to pronounce, let alone understand. Try to choose foods that have ingredients that are simple, recognizable and real. If you don't know an ingredient, do some research before purchasing the product.
• Go for lean. One 3-ounce portion of chicken provides a powerhouse of lean protein, with the breast meat being the leanest part of a chicken.
• Refrigerate and freeze ASAP. Select your frozen and refrigerated items at the end of your trip and freeze or refrigerate within 30 minutes of purchasing.
October 28, 2011 3:42 pm
A schedule full of fun events like sports practice, dance recitals, movies and activities can be fulfilling for the whole family, but without a plan, your fun weekend may mean more stress, less playtime.
Recently, Olympic gold medal figure skater and mom of two Kristi Yamaguchi, shared her secret to busy family fun with Smucker’s® Uncrustables. "Like so many parents, it can be a challenge to keep my active family organized, especially on the go," says Yamaguchi. "I am thrilled to share with other moms and dads my favorite tips for unstoppable families."
1.) When a busy day has you skating from one activity to the next, it's important to be prepared. Bring along a backpack with everything you might need for your on-the-go day, including handheld snacks, like fruit, water, sunscreen and easy activities for down time.
2.) Unstoppable families are always on the move. Post a large calendar in the kitchen or family room to capture and keep track of your family's weekly activities. Assign a different color marker to each member of the family. This will help keep everyone on time and in line.
3.) Let the games go green! Encourage creativity by finding ways to repurpose everyday items into fun activities. A drinking straw and some ribbon becomes a magic wand. Two painted paper towel rolls can become a pair of backyard binoculars. Reuse magazines to make colorful collages and other fun art projects.
4.) Sometimes fast-paced weekdays leave little time for family fun. Set aside time each weekend to enjoy the outdoors and each other's company. Plan hiking trips and bike riding adventures that will appeal to everyone. Put together a "scavenger list" with fun things to look for along the way like a yellow flower, a white cat, a BIG bug and other outdoor items.
5.) Have a little fun while on the run. Store books, games, markers and paper in the car to keep kids entertained on the road or in-between events. Also, make sure to have some kid-friendly tunes to keep the kids singing from your driveway to the soccer field.
6.) Ask around at your local community center or health club about family fitness classes. Try an aerobics or swimming class as a family; it will be a great way to stay active and spend time together.
7.) Like the title of my book Dream Big Little Pig, I always teach my kids they can accomplish anything with practice and perseverance. Encourage your kids to try their best at every activity they pursue and explore their interests no matter how sky-high. You might be raising an award-winning musician or the future President of the United States.
8.) Think outside the toy box when it comes to family activities. An old blanket quickly transforms into a magic carpet when spread across the living room floor. Couch cushions and bed sheets always make the best forts. A simple flash light becomes a projector for shadow puppets in a dark playroom. Use soccer balls, hula hoops and other everyday items to create a fun obstacle course in the backyard.
9.) My family spends a lot of time on the ice and it has shown us the importance of teamwork. Encourage your kids to join a local soccer or basketball team. They'll have fun while learning team building skills.
10.) Don't let a rainy day dampen your outdoor plans. Pitch a small tent in the living room and have a "camp in" complete with a construction paper campfire and sleeping bags. Weather the storms outside with tall tales shared over campfire treats.
October 28, 2011 3:42 pm
Make no bones about it—Halloween is all about having some spine-tingling fun. This year, why not share the scare by hosting a Trick-or-Treat party for school friends or even the neighborhood?
With these tips and ideas, you can throw a monster bash on a budget that's not frightening at all.
Set a Spooktacular Scene
Whether you want to go all-out scary or keep it all in good fun, you can combine store-bought decorations with homemade creations to save money.
• Line fake gravestones along your walkway. Buy them pre-made, or make them yourself using foam or cardboard and spray paint.
• Perch eerie, fake birds near your doorway, and hang cobwebs anywhere you can reach.
• Place creepy-crawlies, like plastic spiders, everywhere.
• Add scary inflatable figures to your yard—the designs get more elaborate every year, and they store easily when deflated.
• Turn an inexpensive, thrift-store stockpot into a spooky kitchen-table centerpiece. Just add dry ice and warm water for frightfully fun fog. Always wear gloves when you handle dry ice and always store it in a ventilated container.
• A jack-o-lantern is a Halloween classic. Easy stencils make complex witch, werewolf and scary-face designs a breeze.
• Use rechargeable outdoor tea lights and Halloween-themed string lights as safer alternatives to candles.
• Build a scarecrow—all you need is wooden garden stakes, pillows, straw and old clothes.
• Use unexpected items in a whole new way. Spray paint branches or old lamps black and orange and use them as centerpieces; make spooky skeleton cut-outs with poster board; use toilet paper to wrap someone up in a nifty mummy costume; or bring the outdoors in with hay bales and mums.
Frightfully Fun Games
Kids and grownups alike will get a kick out of these Halloween games.
• Halloween Charades—Write down Halloween characters, places and things on pieces of paper. Fold the papers and put them in a bowl. Then have each person, in turn, pick a piece of paper and act out the written words until the game's audience guesses what's being acted out. Want more competition? Split the group into teams and award candy prizes for correct answers.
• Pin the Nose on the Pumpkin—You'll need a pumpkin (either real or made out of orange construction paper), pushpins or tape, a blindfold and several pumpkin noses (black construction paper will work). Draw eyes and a mouth on your pumpkin's face, and hang it up. Blindfold a player, spin them around, hand them a paper nose (secured with a pushpin for adults and tape for children) and direct them toward the pumpkin. The player who attaches the nose closest to the right spot wins. You could also play Pin the Wart on the Witch, or Pin the Smile on the Scarecrow.
• Pumpkin Decorating Contest—Set out markers, stickers, glue, construction paper, buttons and other household items. Give guests a pumpkin and a 30-minute decoration time frame. Award prizes for the "Prettiest," "Scariest" and "Most Interesting." Don't want winners or losers? Let kids decorate and take home their pumpkins.
For more information, visit www.walmart.com/halloween.
October 28, 2011 3:42 pm
Mortgagor. Party or person that borrows money, giving a lien on the property as security for the loan; the borrower.
October 28, 2011 3:42 pm
Q: What things do lenders view positively and negatively during the application process?
A: When you apply for a loan, long, steady employment is always seen as a plus, as is a large down payment, a good credit rating, a history of regular savings, and property located in a “good” neighborhood.
Not so good in the lender’s mind: frequent job changes without salary increases, self-employment in a new venture, bad debt history, no previous borrowing record, and dilapidated property.
Do not be discouraged. These are standard lender pre-dispositions when evaluating your application, but when it comes to making a loan decision, most lenders will tell you nothing is completely carved in stone.
Consider, too, that credit you have qualified for—say, credit cards—can work against you, even if never used. This is because those credit cards are looked upon as being open credit lines—and while they have not been used, they could be used, and potentially used up to the maximum dollar amount allowed by the credit card companies. As a result, their perceived risks lower your credit, or FICO, score.