Archives for September 2018

Pros and Cons of Buying a Tiny Home

Pros and Cons of Buying a Tiny Home

Coyote, the son of Lily Tomlin’s character on the hit Netflix series Grace and Frankie, attempts to prepare a meal in his tiny home. Hilarity then ensues as he tries to maneuver through the dinky kitchen space without running into, or over, his girlfriend. Such is the reality of tiny home life, on TV and in true life. But that hasn’t stopped thousands of people from making the move to a space that’s a fraction of the size of a typical American home.

What was once written off as a short-term trend has proven to have staying power. And, tiny homes are no longer being associated primarily with millennials, either. There are plenty of stories of families choosing to live leaner. Tiny homes are now increasingly the choice of seniors, as well.

Tiny houses “can be an attractive option for retirees who want to downsize after the kids leave the nest,” said TODAY. “For one thing, they can come with major financial advantages. One retired woman TODAY profiled “paid $65,000 for her tiny house, an incredible bargain compared to Portland’s median home sale price of $394,100.”

But that doesn’t make tiny living a breeze—especially for those who are used to more space. Here we’re breaking down the pros and cons.

Pro: Yes, they’re affordable

The price is right for tiny homes regardless of location.

“A tiny house costs a lot less to build than a full-sized one. According to The Tiny Life, it’s possible to build a tiny house for $23,000 on average. The average price for a full-sized house, by contrast, is $272,000—more than 10 times as much,” said Money Crashers. “Cutting back on housing expenses enables tiny house owners to put more money toward luxuries (such as travel), save for retirement, or simply work less.”

A tiny home also often means no mortgage, which, if the buyer can swing it, means they don’t have to pay interest and can own their home outright. “The Tiny Life reports that 68% of tiny house owners own their homes free and clear, as compared to just 29% of all homeowners.”

Con: Yes, they’re small!

Technically, this could also be a “pro” for those keen on tightening up their footprint, but, for most people, the idea of living in 100 to 400 square feet (the average size of a tiny home), is a deal-breaker.

“Living in a tiny home means you’ll have to do a lot of sacrificing in order to downsize,” said Little House of Four. “More often than not you’ll have to give up your private office, art studio or home gym. Your washer and dryer will more than likely end up in your bathroom or kitchen and you’ll have to do some serious compromising when it comes to what you bring into the home. There are ways to remedy these ‘sacrifices,’ but you’ll still be giving up your privacy and downsizing no matter how creative you get with storage.”

Pro: They’re portable

If you buy a traditional house, you’re not likely going to load it up on a truck and move it somewhere else when you desire a change of scenery. But, with a tiny home, that’s part of the allure. “A tiny house can easily be fitted on a flatbed truck, which makes delivering them to buyers, as well as future resettling really easy,” said Millennial Magazine. “Whether they are stuck with a bout of wanderlust, seeking new job opportunities, or just want to spend a season living close to a beach…millennials are sure to appreciate the fact that they can simply pack-up their house and go on their way.”

Con: Lack of personal space

Forget about that man cave or even a she shed. If you need a little space to yourself, that’s going to be hard to achieve in a tiny home. “Living in a tiny home by yourself might be easy, but sharing a small space with one or more people can be a challenge,” said Little House of Four. “There’s no personal space to spend time alone or even roll out an exercise mat and get in a workout. Those of you that are extroverts may have no problem being in tight quarters with others, but introverts…may miss the alone time that a larger house can offer.”

Pro: They’re clever

You think you have some smart storage solutions in your home? Imagine what you’d need to fashion if you lived in 200 square feet! There are tons of great ideas out there. We’re digging the smart storage under the stairs here  and the cabinet walls here.

Con: They still lack storage because they lack space

No matter how many witty ideas you come up with, you’re never going to have an ample walk-in closet and tons of kitchen cabinets—both of which are ingrained in the “typical” vision of the American dream.

Pro: They’re greener

Tiny homes are, by their very essence, more environmentally friendly simply because, “Their size means that they require substantially fewer building materials to construct, which makes it viable to use more expensive, eco-friendly components and still keep costs down overall,” said Millennial Magazine. Plus, “Relying on solar energy for heating and electricity is something tiny homes can brag about over other, less sustainable housing options.”

Con: Zoning Rules

“Although a tiny house doesn’t require much land, many towns make it difficult to build one,” said Money Crashers. “Zoning laws often include a minimum size for dwellings, and a 200-square-foot tiny house isn’t usually big enough to make the cut. To get around these rules, some tiny house owners buy a full-sized house, rent it out, and then park their tiny houses in the backyard as either ‘outbuildings’ or ‘vehicles.’ Trailer parks can also provide a home for a tiny house.”


Source: Pros and Cons of Buying a Tiny Home

Decorating Tricks for Hiding Kids’ Messes While Selling Your Home

Decorating Tricks for Hiding Kids’ Messes While Selling Your Home

Keeping the house together during the selling process is a challenge. Making sure everything is just right for showings and open houses can be exhausting and overwhelming Throw kids into the mix, and things can get downright chaotic. Fortunately, a few small decor choices can help conceal kid clutter—changing your “for sale” sign to “sold.”

Hide in Plain Sight

With overflowing toy boxes and tea-party set-ups overtaking the living room, it may be unrealistic to banish all kid stuff to other rooms. Instead, make use of your furniture’s built-in compartments and drawers. Have a storage ottoman next to the sofa? Fill it with everything from action figures and dolls to coloring books, art supplies, stuffed animals and more. Divide the credenza in the family room so that your little ones can store toys behind its closed doors. Accent the open shelves with ceramic vases, family photos, decorative carafes and other appealing decor items.

If your built-in storage is already in use, opt for two or three woven baskets with lids instead. Place them wherever you want, whether it’s next to the loveseat or on the bottom shelf of a console table. Buyers will be too busy appreciating your home’s cleanliness and open floor space to think about what’s inside.

Hide Within Reach

Families in smaller living spaces might consider another strategy—underbed and attic storage. While the underside of your child’s bed may be already home to all sorts of tchotchkes, encourage kids to neaten it up with rolling plastic or rattan storage bins. Discreetly stow away everything from dress-up clothes to seasonal clothing in multiple containers. Slide them out of sight, then help your little one make the bed with an oversized quilt that conceals what’s hidden below. The best part? These containers can still be used after moving into the new bedroom or playroom.

For toys that are too big to fit in this space, such as kids’ teepees and play tents, consider collapsing them and stowing behind a dresser. If the dresser has legs that makes it easy to spot what’s behind it, opt for a chest instead.

Rotate Toys in Longer-Term Storage

Consider storing bins of toys longer-term and swapping them out every few weeks. In addition to the attic and basement, the back corner of a deep closet is a great place to stack storage tubs filled with everything from building blocks and board games to miniature cars and pull toys. Strategically hide them behind long coats so a quick peek inside the closet doesn’t give anything away. Better yet, switch out the storage tubs for suitcases. Rotate the toys in storage every few weeks–kids will have renewed interest when they come out of hiding.

Minimize and Add Some Style

Rather than attempting to conceal every toy, consider downsizing. Prior to the first showing, help your little one sort through toys, determining what still gets played with and what doesn’t. Sort into “keep,” “donate,” and “throw away.” This streamlines the cleanup process and makes it easier to stow away what remains. Bonus? You’ll have less to move when the time comes. For every item your children give up, consider rewarding them with small change or a trip to a favorite restaurant or ice cream shop.

For kids’ areas like bedrooms and playrooms, embrace the playful nature and just add a little style. Choose bookcases and desks with useful cubbies and shelves, and dress up the space with vibrant and unique artwork. Inspire imagination in potential buyers (and keep the space useful while your home is on the market) by choosing a few colorful supplies and knick-knacks to display.

Strategically rearrange home decor to hide kids’ messes while your house is being shown, and potential buyers will see a clean space that they’ll want to make their own.

 

Heather Cordonnier is a writer for Crate and Barrel. She specializes in sharing her style-savvy tips on DIY and lifestyle blogs.


Source: Decorating Tricks for Hiding Kids’ Messes While Selling Your Home

Study Says Buying a Home is Cheaper Than Renting

Study Says Buying a Home is Cheaper Than Renting

As Canada’s homeownership rate drops for the first time in 45 years, a new study says those who buy a home are better off financially than those who rent.

If you can afford to buy a home, do it. That’s the message from a new study by Mortgage Professionals Canada, which compared the costs of buying versus renting in 266 scenarios across Canada.

“The report demonstrates that the money Canadians are spending on monthly rent, if used instead to finance a home, would be a very beneficial investment over time,” says Will Dunning, author of the report. “The costs of owning and renting continue to rise across Canada. However, rents continue to rise over time whereas the largest cost of homeownership – the mortgage payment – typically maintains a fixed amount over a set period of time. The result is that the cost of renting will increase more rapidly than the cost of homeownership.”

“Buying a home also has more long-term upside than renting,” says Dunning. “Everyone wants to save for their future, but rising costs, including rent, are making that more difficult. The lower life-time costs of homeownership mean that owners have more ability to save for retirement than do renters. The financial benefits of homeownership go beyond equity accumulations.”

The report comes as Canada’s homeownership rate is dropping for the first time in 45 years. A report by Point2Homes found that 11 of 13 provinces saw the share of homeownership drop in the 2016 Census, according to Statistics Canada.

Homeowners still outnumber renters by more than two-to-one. The homeownership rate hit a high of 69 per cent in 2011 but dropped to 67.8 per cent in 2016. The number of renters rose from 31 per cent in 2011 to 32.2 per cent in 2016.

Dunning acknowledges in the report that it’s not easy for first-time buyers to come up with a down payment, due to rising house prices and government housing policies such as the mortgage stress test. It requires borrowers to qualify for a mortgage at two percentage points higher than the posted mortgage rate.

The study determined that across the dataset of 266 locations and different dwelling types, the total cost of homeownership is an average of $3,052 per month, compared to $2,511 for renting the same property.

“However, the cost of ownership includes a substantial amount of principal repayment ($990 in the first month). Since this results in a reduction in the amount of mortgage owing, it is a form of saving,” says Dunning. “There is, therefore, a net cost of homeownership that excludes the repayment of the principal. This net cost of $2,062 per month is lower than the cost of renting by $449 per month. On this basis it is, on average across the dataset, currently cheaper to own than rent.”

He says that since the homeowner is tying up a lot of capital with the down payment and closing costs, they should consider the rate of return on that investment.

“In this data set there is a negative rate of return (-5.2 per cent per year) when the total cost of homeownership is calculated,” he says. But when calculating rate of return, “the repayment of principal must be taken into account (since it is a legitimate component of the return on investment). On this basis, the rate of return at the beginning is an annualized rate of 4.3 per cent.”

While some people might consider this “inadequate,” Dunning says that since buying a house is a low-risk investment, a high return on investment shouldn’t be expected. His calculations did not include any capital appreciation on the home, since there is no guarantee that house values will go up. “In most situations, homeownership is justified financially without any need to expect price appreciation,” he says.

Another advantage is that homeownership in Canada has a tax-free rate of return, which other investments do not.

In Dunning’s scenarios, if the mortgage interest rate does not change, in 10 years the cost of ownership will be lower than the cost of renting in 263 out of the 266 cases. If the rate rises a full percentage point after five years, owning will still be cheaper than renting in 92 per cent of the cases, and if the rate is up by two per cent after five years, 82 per cent of the homeowners in the scenarios still come out on top.

“Looking even farther ahead, by the time the mortgage is fully repaid in 25 years or less, the cost of owning will be vastly lower than the cost of renting in every one of the 266 cases,” says Dunning.

He also looked at data from Statistics Canada to compare the wealth of homeowners versus renters and found that homeowners ìare distinctly better off financially compared to tenants who are similar in age and level of income. The difference is not just in terms of their home equity. Owners have more non-housing wealth than tenants. This may reflect that because owners have lower lifetime housing costs than tenants, they have more opportunity to accrue other savings.î

Dunning adds: “In this light, is it any wonder that Canadians remain highly interested in homeownership? Contrary to what might be asserted by some ‘housing bears’, home buying is not the result of a ‘cult’, a ‘mania’ or a ‘delusion’. It is the result of a reality that, even at much higher house prices, and even with the risk that interest rates may increase substantially, in most situations Canadians, over long periods of time, are still much better off as homeowners than as tenants.”


Source: Study Says Buying a Home is Cheaper Than Renting

5 Mistakes Home Sellers Make

5 Mistakes Home Sellers Make

There’s no shortage of advice for home buyers. Getting approved for a mortgage or how to keep on top of a credit report is certainly good advice but there should be just as much attention given to those who are selling their home. After all, home sellers also typically turn around and become home buyers. For most, selling the home means coming up with the necessary funds for a down payment and closing costs. Here are five common mistakes home sellers make.

 

Wrong Price

The first misstep is to price the home wrong. Either too high or too low. Getting the price “just right” means getting the most out of your home while at the same time not pricing it out of the market to the point where very few, if any, potential buyers reach out. If you have some time to sell, you could list your home on the higher side compared to recent sales in your area. If you need to sell quickly, the lower end can help. You should contact a couple of real estate agents and ask for a Comparative Market Analysis.

Flying Solo

Some home owners think they can save a few thousand dollars by selling a home without a real estate agent when in fact it can cost someone thousands of dollars by not using a real estate agent. You simply can’t provide the reach that a licensed real estate professional can. When a home is placed into the local Multiple Listing Service, the home is then available for potential home buyers all across the country and not just your neighborhood. A deeper buyer pool means more offers.

Show Ready

One thing you’ll need to keep on top of is the selling condition of your home. This means both inside your home and out. How’s the curb appeal? When someone first pulls up to your home are they automatically drawn in? Or maybe the lawn needs some work and the shrubbery is a little ragged. Keep the lawn trimmed and free of clutter. Power wash the sidewalk, driveway and front porch. Inside, you also need to de-cluttter. Open up each room by placing bulky furniture into a storage unit. Take down family photos and portraits. When buyers walk into your home they want to be able to visualize it being theirs, and having an instant reminder that it’s not by having family photos all around detracts from that.
Inspection Home buyers are advised to have a potential property inspected to discover anything that needs to be fixed, updated or repaired. But you too should hire an inspector to perform a complete run-down from basement to attic looking for anything that needs your attention. The buyers will order an inspection so you want to know what they’ll discover before they do with their own.

Getting Anxious

Don’t get too anxious and don’t jump at the very first offer. Your sales price will probably be much higher than what you originally paid for it, but take a deep breath when that first offer comes in. Give your agent plenty of time to list your home and hold open houses to gain a wider audience and have some patience. If you accept an offer very early on in the process, you might be costing yourself thousands of dollars and no more offers.


Source: 5 Mistakes Home Sellers Make

Legal Marijuana: Where To Move, And Why

Legal Marijuana: Where To Move, And Why

Because you need it for medical reasons. Because you want to become a grower or open a dispensary. Or because you’re simply a fan of getting high. They’re all reasons for moving to states where marijuana is now legal. But there are also a few you may not have thought about, like the fact that, “Legal marijuana is a boon to the economy,” said Forbes. And that the economic benefit is largely being felt by homeowners.

“One thing is clear, pot entrepreneurs are contributing to real estate booms in commercial and residential markets in states that have legalized the drug for medical and recreational use,” said PropLogix.

The impact on commercial sales has been palpable, with growers and dispensaries creating demand for warehouses, factories, and “long-abandoned strip malls. As a result, states like Colorado and Washington are seeing premium prices for building leases and purchases within the proper zoning,” they said.

As for residential sales, Colorado provides a prime example of the demand being created. “Colorado’s state law allows for counties to determine if they and how they want to legalize and regulate the drug. Areas where it’s legal attract more homebuyers, including marijuana users as well as entrepreneurs and job seekers. As more growers and retailers open up shop in these municipalities, the demand for workers rise. The influx of new residents inevitably leads to more home sales and higher rents. There are also plenty of people moving to pot-friendly states without intent to work for the industry, but rather to enjoy the bud of its labor.”

So how does that translate to home values? The Cannifornian also turned to Colorado for a look at how the state’s home values were affected by the legalization of marijuana. “Researchers looking at the impact of legalized recreational marijuana on Denver’s home prices found a surprising trend: dispensaries that began selling recreational marijuana had a ‘large positive impact on neighboring property values,'” they said. “After recreational sales became legal, houses close to a participating dispensary saw their value increase more than 8 percent relative to homes located slightly farther away.”

In addition, Realtor.com looked at real estate values in Colorado and three other legalized states, Alaska, Oregon and Washington. They “showed a marked increase in home prices — well above the national median price,” after at least “a year of experience with recreational marijuana sales,” said the Herald-Tribune

Where it’s legal

Oklahoma recently became the 30th state to legalize medical marijuana. The rest are:

  • Alabama
  • Arizona
  • Arkansas
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maryland
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • West Virginia
  • Wisconsin
  • Wyoming

Nine states, plus Washington, DC, have legalized marijuana for recreational use:

  • Alaska
  • California
  • Colorado
  • Maine
  • Massachusetts
  • Nevada
  • Oregon
  • Vermont
  • Washington
  • Washington D.C.

Several additional states including New York are considering the move, especially in light of the growing support (pun intended) and tax ramifications. The Verge’s recent look at whether or not New York should legalize weed brought up several interesting points in favor:

“It’d certainly be a popular move, since one in 10 New Yorkers used marijuana in the last month. It could also help fight the opioid epidemic. After all, medical cannabis can be prescribed for pain-relief.”

Indeed, a Gallup Poll shows that support for marijuana legalization is at “64% of Americans, and a recent report predicts “the legal marijuana market will reach $24.5 billion in sales—a 28% annual compound growth rate – by 2021, as more state-legal markets come online,” said Business Insider.

The financial consideration for states is tremendous. “In the end, legalizing pot could be good for New York State’s bottom line because the state could rake in the tax revenue,” said The Verge. “People buy between 6.5 and 10.2 million ounces of weed illegally in New York State every year. If you estimate that it costs between $270 to $340 per ounce, that adds up to a $1.7 to $3.5 billion-dollar market. With taxes, anywhere between $173.3 million to $542.3 million of that could end up in state coffers.”


Source: Legal Marijuana: Where To Move, And Why