Master Money Management: Expert Tips for Financial Success

Easy Ways to Invest In Real Estate

by David Glenn | Nov 14, 2017 | CRESTICO

As an investor, real estate is one of the many options you can consider to expand your portfolio. It comes with many benefits including securing your future, buying a home and making money from renting out the real estate property you buy. If you are starting out, it is imperative to keep in mind the advantages and risks that come with real estate investment so that you make the best decision for your money. Once you have decided to invest, here are a few easy ways you can start out with:

Buy to rent

With buy-to-rent properties, you will be able to pay the mortgage on your property through the income generated from the tenant. If you select this option, you will be responsible for the expenses that come with renting out, including maintenance costs and taxes Ensure that you do your due diligence to make sure that the investment is worth it. Remember, the rent will depend on the market rates without affecting your mortgage. You should also make sure that you choose a property in an area where people would like to live so that you can get tenants easier. Consider the kind of tenant you want on your property before making a decision.

Consider investment groups

If you do not want a rental property, consider joining an investment group. With these groups, a company buys or builds property and lets a group of investors buy them through the company. Although you can own one or multiple units, all management responsibilities fall on the company. The company will also take a percentage of the monthly rent to cater for the maintenance, mortgage insurance, advertisement of vacant units and others. It is important to note that mortgage insurance is different than homeowners insurance, also known as home insurance, and it is wise to have both. Keep in mind that some investment groups require a percentage of the rent for vacant units. Ensure that you find out more about the agreements before signing up for such an investment.

Buy to Sell

If you are not interested in the two options above, consider flipping properties as a way of investing in real estate. This is the process of buying property, holding it for a few months with the intention of selling for a profit. It comes with a number of pros including the potential to make quick money and you will be able to learn a thing or two about Construction, real estate and market demand. However, you need to be careful not to make mistakes that might cost you. Keep in mind that you will need adequate time, as renovation is important to boost the value of your home when reselling. From finding the right house, buying the property and fixing it up, you will need quiet time and patience so that the investment can be worth it.

Real Estate Investment Trust

A real estate investment trust (RIET) will invest your money to buy and operate income property. It is a good plan as it allows both small and large investors to own real estate and commercial property as well. REITs come with a number of regulations, including having at least 100 shareholders; at least 75 percent of the assets must be in real estate, cash and government securities and 75 percent of the gross income come from rent, mortgage, and real estate investments. With REIT, you will benefit from high yields, simple tax improvement, and diversification.

Leverage

You can also consider leverage as an investment strategy to increase your potential of earning returns on your investment. This means that you use borrowed money to pay a significant percentage of the cost that enables you to buy a more expensive property that you could have bought using the available funds. If you are not comfortable with using leverage directly, you can invest in companies that use leverage to finance their operations. Depending on the decision that you take, make sure that you weigh your options, do your research on the benefits and costs of each before making your investment.

5 Fun and Simple Ways to Save Money for the Family

by David Glenn | Sep 12, 2017 | CRESTICO

Saving your family money is nowhere near as difficult as many people think, which means you can lower your family’s bills and save a little money in more than one place. Saving is the easy part. It’s figuring out how to do it in your own family’s budget that makes the concept a little more difficult. With these five money saving tips, you’ll be on your way to more savings and a more fulfilling life in no time.

Get Quotes

The first thing you need to do is go over the budget and see where you can save money on your expenses. You can get free insurance quotes for your car as well as your home, you can ask your credit card companies to lower your interest rates, and you can call the cable company and tell them you’re paying too much. Most are happy to lower your bills for you if they suspect you might leave for another company.

Make a Meal Plan

You don’t have to sit down and plan every single meal for every single day of the week, but you should have enough meals on the menu for the entire week. You can eat them any night you want, but pick seven meals you’re going to eat this week and make a list. Now you can go to the store once and buy everything you need rather than a dozen times to pick up that one extra thing you forgot. You’ll end up spending far less the fewer times you go to the store.

Take Some Time

Impulse buys are difficult, but you don’t have to live with regret each time you make a purchase. Is there something you love more than anything, and you really want it? Put it in your online cart and leave it there for 24-hours. If you still can’t stop thinking about it at the end of your 24-hours, it’s for you. If you still aren’t sure you want it or not, don’t buy it. The key here is to really decide you want it. If you do want it, you’ll know at the end of the day. If you don’t, you just saved yourself a lot of money and regret. If you’re worried about regret after making the decision to buy something, perhaps the decision isn’t the right one for you and your family.

Find Local Deals

Did you know you can take your kids out without blowing the budget? It’s easy to spend $100 at the movie theater on just tickets and popcorn for the average family, but you can find a better way to do it. Most movie theaters offer $1 movies for families all summer. Bowling alleys have $1 bowling night, and even skating rinks offer family packages to save money and encourage people to visit. Take advantage of those when they are offered.

Lower Your Utility Bill

One of the biggest wastes of money in most all households is the energy bill. Start shutting the blinds during the hottest part of the day to keep it cool inside and the air from running over-time. Cook outside during the summer to prevent heating up the house. Light a fire instead of turning up the heat. Turn off lights, set timers, and invest in a smart thermostat. The more you save on utilities, the more your family can save elsewhere There are hundreds of ways you can save your money, and it all starts at home. Start paying your credit card balances in full each month to avoid paying interest charges. Start filling up your gas tank rather than putting a little in here and there. Eat at home more often, and be sure to only buy things you need. You can negotiate with just about anyone, and that’s what makes it easier to save on things you need the most for you and your family.

Lessons most real estate investors learn the hard way

by David Glenn | May 20, 2017 | CRESTICO

Investing in real estate can be one of the most exhilarating things an investor does. There is a thrill that comes with finding a good deal, improving a home and, making a killing off of the sale. Most real estate investors don’t start out that way, however. In fact, many, if not most, real estate investors will tell you that they have made many mistakes and lost quite a bit of money as well. They will also tell you it was worth it because of the lessons learned that could be utilized later down the line.

Here are a few mistakes real estate investors typically make in the beginning. Avoiding them can save a lot of heartache.

Hard money

Hard money loans can be an incredible tool. If you have not heard of hard money loans, they are quick loans that are based on the value of the asset (the home, or piece of real estate) instead of the person getting the loan. This means someone with bad credit good get a hard money loan, as long as it is a good deal and the house is worth a lot more, or has a lot of potential.

Hard money loans are usually less than a year, and are just used to snag a quick deal, maybe fix things up, then sell or convert to a regular loan. They have incredibly high Interest Rates – often as high as fifteen percent.

Because of the high interest rates, investors usually hold hard money loans for as little time as possible. If a mistake is made and they end up holding the loan significantly longer than expected, the interest expenses can rack up and put them in a miserable place. If they hold past the original time of the loan, things can get really ugly.

Simply put, if you are going to use a hard money lender, be careful, have exit strategies and backup exit strategies to be sure you are not stuck holding the bag.

Signals

Most good investors are able to use signals and see when the signs point to selling and when they point to buying. If you are able to recognize these signals then you are able to capitalize much quicker and make money much faster.

Research

If you think you are getting a good deal on a piece of property then it is time to be careful. There is often a reason a piece of property is priced the way it is. While good deals do exist, bad deals disguised as good deals also exist.

Research the neighborhood, the history of the home, the future of the area, rental prices, the real estate market as a whole, and everything else you can think of. If everything checks out, you can feel confident in the deal you are getting.

Understand expenses

Your mortgage will absolutely not be your only expense. There will be random expense all along the way. Try to have an emergency fund for when something big comes up. New investors are often surprised to realize how much some home repairs can cost. One recommendation that some investors will give is a home warranty. A home warranty is a warranty that gives you the ability to insure almost everything in your home that can break. From water heaters, stoves, microwaves, refrigerators, and more. While these are not killer expenses if broken, it may be a good idea to have a warranty in place until you have a large enough savings that you can replace and repair these items yourself.

This list is not comprehensive in the least. New real estate investors make mistakes every day. It will happen no matter how big the list. Find a mentor who has done what you are looking to do. Get advice and confirm your first few deals with them. Someday you may be that very mentor.

How to Save Money For Your First Home

by David Glenn | Apr 18, 2017 | CRESTICO

Some home buyers are able to purchase their first home for as little as three percent down or less. However, three percent on a decent home can still cost a small fortune. In some markets, it may equate to tens of thousands of dollars or more. You also have closing costs to pay for when buying a new house, and these can easily cost you another three percent of the sales price or more in some cases. Saving up enough money to purchase your first home can seem like an impossible feat, but you actually can accomplish this goal if you put your mind to it. These steps can help you to reach your goal more easily.

Determine Your Goal

Establishing a financial goal gives you a target to reach for, and it can help you to more easily focus on saving. First, research homes that you would like to purchase, and pay attention to their approximate sales price. Then, research Loan Programs that you may qualify for, and pay attention to the down payment requirements. Using this information, you can determine the approximate amount of money you need to save as a down payment. In addition, factor approximately three to five percent of the sales price for closing costs. It is always better to estimate on the high side so that you are not caught off guard by extra expenses. In addition, most lenders want to see that you have at least three to five months of the estimated mortgage payment available in savings after the down payment and closing costs have been taken into account. When you add all of these figures up, you will determine your financial goal.

Create a Detailed Budget

Now that you have a firm goal in mind, you need to review your monthly budget. Some of the most financially successful people have a rolling budget that extends for many months. This is because expenses can vary from month to month, and an extended budget gives you the opportunity to budget for these fluctuations. Take time to look for ways to trim back your expenses. For example, you could shop around for more affordable auto insurance or switch from cable TV to Internet-based programming. Many people can easily trim several hundred dollars or more from their budget with proper effort. Allot this money toward regular savings. It is wise to include a line item in your budget for savings and to consider this is a necessary expense.

Make Automated Savings Transfers

Some people find it difficult to adjust to saving money. It essentially takes a large chunk of money out of your budget each month. However, when you scale back your regular expenses, such as by eliminating your cable TV plan, you do not necessarily need to adjust your lifestyle and regular spending habits to save money. You can easily set up an automatic savings transfer that moves the money to your savings account on each payday. This way, within a few months, you will easily become accustomed to saving money.

Save Your Windfalls

Many people receive windfalls throughout the year. For example, you may receive a production or holiday bonus from work, a tax refund or holiday or birthday presents in cash. In some cases, this can add up to several thousand dollars or more over the course of a year. Rather than spend this money, add it to your savings account. This is a great way to see an instant increase in your account balance. In addition, if you receive a raise, increase your savings transfers by the amount of your raise. This way, you will increase your savings contributions regularly without impacting your current lifestyle.

It may take you several years to save up enough money to purchase a house. When you follow these steps, you will see your savings account balance grow over time. Eventually, you will reach the goal you have established.

How To Save For A Home Downpayment

by David Glenn | Feb 17, 2017 | CRESTICO

One of the more common ways to build wealth over time is owning a home. As owners pay down the mortgage, they are able to build up equity. Should they decide to sell the home, they can then tap this equity. The homeownership rate in the US was 63.8 percent in October 2016. While this was down from what it was a few years ago, this statistic shows that owning a home is still a popular way to build wealth.

It’s recommended that prospective buyers save up 20 percent of the home’s value as a down payment. This will allow the buyer to avoid private mortgage insurance, which can be quite expensive and only protects the lender. FHA loans only require a 3.5 percent down payment, and loans via the USDA or the VA require no money down. If you’re not in a rural area or a veteran, here are some ways to build up the down payment that’s necessary to buy a new home.

Live In Affordable Accommodations

When it comes to the biggest expenses that most people will have on a monthly basis, the cost of lodging will usually come up near the top of the list. The average cost of rent in the United States is $1,231 a month. That’s more than a quarter of the median family income. The best way to save money on rent is to find a place to live that’s on the low side of the local market rate. While there won’t be as many amenities in cheap apartments or homes, the money that’s not spent in the way of housing can go toward savings.

Just getting a cheap apartment is not the only way to save money toward a down payment. Getting a roommate can also help cut the cost of rent and free up even more cash flow for savings. For example, a three-bedroom apartment or house that costs the median of $1,200 could cost only $400 a month if one person rented out each bedroom. Put in some twin beds, and the cost could be lower. Even a married couple could rent out a room or two to save on costs. Every dollar saved on rent can then go toward saving up for a future down payment.

Cut Other Expenses

Americans are notorious for spending more money than they need to. Whether it’s a daily latte or cable television, people in the US confuse wants and needs. Basic food, lodging, clothing and transportation are necessary to live and have a job. Most everything else is a want, and there are ways to cut down on these expenses. For example, it’s not necessary to have a super expensive cell plan with unlimited data. There are prepaid options that are pretty cheap. Additionally, it’s possible to cut down on eating out or save some money by opting for Netflix or Hulu rather than an expensive cable package with every pay channel known to man. Every dollar saved from cutting out unnecessary expenses can then go toward a down payment.

Get A Side Hustle

Sometimes, one job just doesn’t pay enough to save much. This is where a side hustle can come in quite handy. There are entire online communities that are dedicated to helping people find side hustles that can bring in extra income. Every dollar earned in excess of basic living expenses can go toward the down payment. Those who can keep up the side hustle after signing off on a mortgage can even accelerate the time needed to pay off the loan.

Regardless of whether a person thinks a down payment for a new home is in the cards, there are steps that he or she can take to build up some savings. It will take time, and it’s a good idea to save up for closing costs and a deductible for home insurance claims. However, over time, building up savings for a down payment can be done by taking positive steps toward the goal.

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