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KMBZ>Audio & Video on Demand>>Life As You Own It 1.22.14 Segment 1

Life As You Own It 1.22.14 Segment 1

Jan 22, 2014|

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Automatically Generated Transcript (may not be 100% accurate)

Life as you own with mark McDougal and Craig Miller. Remember you got questions we've got answers 804924664. You may not take time to educate yourself about the single worst investment and opportunity you have. That invested in the roof of your head in real estate we talked about your home financing make investments in real estate we keep the backs coach -- -- just go back. -- How are I don't Mark Richt -- these Craig Miller welcome back Craig Miller I almost didn't come today is why I am. Still a little under the weather today -- No well you know after an hour together I'm sure you'll be revived -- generated rejuvenated and rejuvenated. All that stuff all those things wolf we are alive as you own it we thank you for joining is on now what we hope is a fan. Stick weekend for you and your family. A panel mark retooled he's Craig Miller we -- each and every weekend you can check is out on at your local affiliate or you can podcasts that show all or you can go online like this you own it dot. Com -- And don't forget I heart radio and a shout outs to oh some of the new family members that have joined it via. Growing team that that is spanning the globe and picture of your drivers to a city -- a show for the first time when you get home call your local radio station and demand that life as you won't it. But comes up part of the air programming so we're gonna give a shout out to what candy why 15:7 AM in Marysville Kansas. And also why. A big Holler out to our friends in now. -- Ohio -- LO -- thirteen 20 AM in -- LH 104 point five that. FM in Lancaster and the Columbus, Ohio some of our newest team members so. Hope you are all doing well and it. You're in for for a lot of information this weekend if your check and is out for the first time -- well you know that we'd like to give you some some great advice about what is likely that single largest investment your life. Put the roof over your head with you rent way the old -- you have investment properties. We're gonna cover a lot of information that is meaningful to you show you ways to save the money maximize that opportunity to invest in real estate or maximize that opera series to -- make other investments. And pay your landlord we're gonna make sure that you leave here. Empowered. Educated and most importantly entertaining because that is our number one goal let's just hope we we -- are saying you so so Craig do you wanna share with those new listener you'll quickly some of -- some of the stuff they may catch. I'm in a typical show or should we just tell what they're gonna catch today. We don't they're gonna catch today there are there are some core features every week the you're gonna pick up when you tune in the life as you -- it we've got you would bring your rates every week -- which you know we're rates have been. Where they were the week before where they're headed we're gonna tell you the national averages almost that you can compare that may be worse scenario that you might be in the -- love we share with you. What's going on with. The general trends and real estate most weeks but also we have our should he stay or should you go segment and that's where we have used the listener emailing us are calling our 800 number. In leaving a message and -- saying hey here's my scenario I owe this much in my house it's worth about this much room to be here for a how long. And my current rate is this should I refinance or should I not should I buy this house and a -- rent any kind of scenario where you're trying to decide if you move from where you are now. Two different position. We wanna give you the answer so reach out just what those every week we we do -- -- forum depends on the amount. And I got -- sacred that is my favorite part of the show is there really whenever we have our our listeners send in their scenarios and sometimes they're challenging sometimes. You know Craig got -- Craig sometimes. And do we incurred were resource for you so we wanna be your answer guys. And some days like Russia we had an answer gallon meg and Clark filling in for Craig Miller but we encourage you -- use us. Users don't abuse and if you include your address in all that information when you send us an email. We will send you on a picture of mark. We are already pursuing a -- -- our entire economy I mean meet tonight Mueller is now at my mom is -- she's up there's mom -- right now she's she lets get one of those autographed photos she's the only person -- okay folks -- In today's show what we're going to talk about if it is now the time to become a real estate investor. Do the math will tell you how to determine the gross yield. See you can insure your investment yield isn't gross prior to buying the property. And also we've got five tax surprises and when we say surprise it's not surprise is as then happy birthday or Cipro. Says then if you -- blog -- proposal. It is surprise as in -- is just taking -- also even some of our most loyal listeners upon occasion. -- to take our vice with a grain of salt now we know it's only advice we meant to be sarcastic but -- -- but we're gonna tell you five. Expensive cities in the US -- retiring and but don't think we're telling you to -- the band today. If budgeted an issue these might be your cities but you know we hold true to our show each and every weekend it's about making sure that you are a educated consumer a savvy consumer and get maximum bang for your investment dollar which could include. Live and literally expensive city. Or not okay -- rates stalk where where are they. There's still flat folks are hanging hanging tough but I will say that the trend has been an upward direction so as a give -- rates today. And you realize that they're similar where they were last week and the week before that we before that we have been in a pattern of a flat line on interest rates for awhile however there's just enough of a technical indicators that we can look at. That show it is an upward swing ever so slightly. But we look at more than just the raid itself we look at a lot of trading patterns of mortgage backed security bonds we wanna tell you that. We are advising people to take you danger -- rates are available today. And not assuming that they're gonna be dropping down anytime in the near future so with that in mind when we share with you where the world this courses last week. Compared to the prior week again the national average on interest rates is based upon 200000 dollar loan amount. So what 20% or more equity and perfect credit. So if you get less than perfect credit may be less equity little bigger -- Marleau out these things could be affected Indian and keep doing again these are guidelines are general guidelines. They don't tell you the whole story we always want to warn you be careful about those fees and closing costs that's the big one is funny he didn't -- -- good rate. -- way to save money with a refinance -- pay off some -- your bills or whatever your goals are. And fail. To really sit down with you and show -- -- break even periods intake to recover those costs and fees are often times are too excessive and in piled in as a new loan amount so. Pay attention. Good like -- dot com free to breaking formula applied to your answer there to make sure that you know with whether this refinance or even have purchased when we comparing two different options. Make sense or not you've got to compare fees vs no fees or hide these fees -- as low fees. OK so. Thirty year fixed four point 39 over the past week that's -- four point 41 the prior week. So would you notice a difference in a rate quote you would -- -- shopping for Maurice today probably not. However like -- that the trend is still up were fifteen year fixed 3.4 five vs 3.4 five no movement on fifteen year fixed rates. And 3.5 five vs 3.5 seven on a 51 arm again folks a 51 arm. That's a thirty year amortized loan with a rate that's fixed for five years and going to an adjustment period thereafter. FHA thirty year fixed four point 26 horses vs four point 29 so. Not much movement there but they're still indications that they will be move in the wrong direction if you're looking for the lowest possible rate take actions that make sense today. Also. Wanna point out there are fees and points involved in last week's national average has been staying steady -- about one point. On average so on 2000 alone at one point 1% that amounts to 2000 dollars and a 200000 dollar loan. That's in addition to other fees and closing costs that may be charged you so pay attention to those fees OK mark. Well how about that timing the timing folks okay you know the drill. This is he should he stay or should you go segment you give us your scenario we'll tell you quickly. Whether you should get the heck out of that won't get the heck out of that house we get the heck out of that relationship. Okay we have Debian Omaha Nebraska emailed the following question I don't a duplex with a balance of a 1161000. And a rate of five and -- that's five point 375. No plans to sell and it's worth about 200000 should I refinance. Or stay with what I've got act. Go meaning refinance. But I've got some. Additional notes mark. Why so I've answered it and we don't know Debbie unfortunately whether you live in -- -- first of all is GoDaddy go and a little little bonus advice from mr. Miller for a doctor Miller goes -- their vacation wasn't as for the rest of the listeners out there -- you're gonna sinister scenario little extra detail can be helpful but. We don't know if Debbie lives in this as a primary residence on one sirens the other raised both sides. If it's an investment property you may not be able to benefit much from refinance if it's a primary residence you probably can save a few -- watch the fees as always. Are triggered one suggestion for our listeners. Watch the fees you know watch the season watched the -- and if you -- the feast today and they should look at the breakeven for because that's the way they're gonna be out protected. What's coming up next mark right we -- -- we've got five tax surprises and we don't mean top top surprise we mean oh crap. -- Joan stay tuned. Our -- backlight Arizona mark McDougal Greg Miller. Sorry we're both back are of -- can say we're back guess who's back. Craig is back and say I missed you last week did you I don't know if he did he didn't tell me that you missed me I did and I called by texted. All those things. So folks but we we think you bring out -- -- -- and we want to make sure that you get the best information available so we -- -- call is 8049246. Export you've got questions. Or if you've got a suggestion not right now we're gonna talk to those -- considering. Thinking about. Purchasing that first investment property or maybe you are a seasoned real estate investor and you need to be reminded. Of the real reason for the exercise in real estate investment it is not because you'd like. Being getting calls an all night to go unclog toilets deal with the chased down now attendants that are not paying their rent on time it bounced checks. All the things that aren't the business and that. The real estate investment piece it's because you want to what Craig what are you wanna Dubai donate some money you wanna make some money and misses the par -- people off to do this. The most basic principle. A really put together business plan. Before you invest in any business which it is a business. You've got to put together a business plan to identify how much money you can make it and if it's really worth the time and effort associated with that investment. Two big dollars if you're gonna talk about an investment property it's a 1020300000. Dollar spokes. Think of that as you should which you're investing in a business a 1020300000. Dollars put get your business plan itself. On the we want to teach you today how to calculate the gross yield up on a rental house. House prices may be on the rise that you can still find attractive investments on rental homes in many markets cross country just need to identify the most profitable deals. The ideal investment house is one that gives you obviously the most bang for your buck in this case that would be the property gives you the highest rental income. And it costs the least. How do you figure the gross -- rental yield is the annual rental income you expect to get on a particular house so if it's a thousand dollars a month. Times twelve months would be 121000 dollars divided by the price shall pay for the property. It gives you a basic idea of the return you can expect to get on your investment. For example you paid a 100000 dollar for a house and you can get 121000 dollars per year for the house the gross yield is 12%. Shoot for obviously a double digit gross yield anything 10% and above it is very healthy for gross yields. Says -- Bloomquist our friend from realty track. But you have to take into account the gross yield is not factoring in your costs associated with the property in terms of maintenance. Property taxes and other potential costs of properties vacant for a couple months while -- finding a rancher. Folks Daryn it's realty track mentions that a good formula is setting aside 40% of -- cut rental income to cover these extra expenses what we want you to do. Is identified -- shield. Then take the next step if it's in the double digits that gives you an opportunity. To potentially recoup that investment. What are you put in -- you put in the maintenance you put in any any. Mean age you may need over the term that -- alone whether it's 51015 years what's that gonna cost. What is your mortgage payment going to cost you one of the taxes what is the insurance and then also what is the management fee you may have to pay if you're not branding yourself and it. Most importantly what is the vacancy rate of that house so good when that we would say to assume is that once you've checked to make sure what you can wreck your -- compared to what the market will. Bad air you then take that number times say 75%. That means that if you believe you get 121000 dollars a month or 121000 dollars a year rented. All twelve months take -- -- 75%. Because that means that you would have only two months on an average year little over two months on an average year where it is vacant. Do you that math if you still are coming out ahead at a rate of return. 678. Or ideally still a double digit rate of return. Might be time to invest in realistic. Any suggestions anything any illumination wanna provide that information Craig. Well one thing I'll say is that elect mark said you really have to do the math a lot has what people don't factor in is the general expenses of involved when it's time to switch renters because there's expenses involved there that are in addition to the -- the expense -- -- you're anticipating that. One thing that the that this article doesn't mention a whole lot is in does barely mentioning is that they're taking into account appreciation in the future I would say that's a big. Consideration if you have some way of knowing. And you don't have a way of knowing exactly but if you have a really good hunch. That you've got you've found a little bit of a gold mine in this is going to be a great property year due to the location the zoning having something to do the big ability to liquidate laid on the road. Is if you can break even on the rent. But the appreciation taking care of itself -- you know your expenses were the rent is it could still be a good investment so. There's many considerations this is he's in -- general guidelines -- All right. What's stamped. Conference just this area. Okay check you stay or should you go -- Lawrence Kansas emailed the following question I bought my first home last summer. It is a small two bedroom one bath house that was a good starter home at the time now I'm engaged to be married in the spring in my future wife. Has six year old son and we both will need more space. Both have good jobs and I'm wondering if I should rent this house. Out or sell when we buy our next home we already been preapproved for a two -- 50000 dollars even if we don't sell but honestly we feel little. We feel a little. I don't know -- direct action read this before lost and she's -- well -- we feel little list probably feel lost because the bank we're working with that really hasn't offered any sound advice please share your thoughts. That is a lengthy question my friend but our benefits and -- we -- so should you stay or should G goes to the question again is. They are getting married in need a bigger house should they keep the rental property or should they sell it -- stay or go Imus to keep it keep the rental property. In all day. Stay the rental property and David rental property and any elaboration you wanna gift. The literal word is so well I don't nor should he -- -- should go waste date may be steady -- I know enough about the Lawrence Kansas market to tell you that that's a good place to have a two bedroom one bathroom property got it. Number two day says they have good jobs and that they qualify whether they -- they don't which tells me that -- nationalist fine. Right and it might you know looks like the perhaps the two of them are you know they both have good jobs in May be upwardly mobile it may be agreed up because it -- and a great town. For rental properties to begin their rental property career other things to take into consideration obviously but from the way -- am looking in on the surface. Sounds like he could play and so far there you go folks and if you do the break even for me on that investment and you include what we just discussed in the previous segment -- the beginning of this segment. If you if you really do the numbers and identify what am -- paying myself per hour. Bomb ma to to to do this part time job of managing this and if it's enough and if you enjoy it and if you're getting the appreciation on the home is Greg mention. But it could be good investment if you're not hitting all those metrics and not hit him right where you wanna beat. Yet for some people the emotions side evidence dealing with people that are paying on time are showing up when -- vacate the property see holes in walls and things treated poorly I mean that's enough for to run some people away including yours truly. Because a federal properties and hasn't gone that well for me and I'm just not a huge fan of dealing with the people themselves but dealing with the people that. All right folks well we talked about it the opening of the our that we had some some terrible tax surprises that we wanna make sure -- aware look as well believe it or not. Another year's past and we're getting ready to get the paperwork together so we can file senator stuff doesn't. Good old Uncle Sam and ideally you'd get a a modest refund. But hopefully it's not too much as we liked the thought of Uncle Sam keeping your money and use it all year. And not pain free any interest so wide number one name is. The unemployment benefits. I don't know if if you if you knew drag I'm sure I'm sure you knew -- off our listeners knew but I guess it's true under tax on unemployment is considered -- come. And the IRS wants the air cuts who's so you've got a -- you gotta fill out it is it is income that you learned and you will pay taxes on it. Alimony received death. You survived divorce is now you have the IRS to deal with -- if you getting alimony. On alimony separate -- missed payments and similar recompense. From your former spouse are taxable TU in the year you receive them. -- pour money however is not taxable so those are you going through the divorce process. If you're to receive one of those. Not that you have got a lot of latitude in this but a little tip to you is. Child support that you receive is not taxable alimony is so if you can wedge a little moreover on the child's -- side and a little less and alimony. I'll tell you folks also it's a it's kind of I think a negotiating peace to his. -- people are more comfortable paying a little more for -- for gosh darn it they're not gonna give more alimony. Coming up but so little little negotiations if there I'm also unemployment benefits. Hello unemployment did you know that -- I did not know what happened this Groundhog Day yeah -- whenever we come back we're gonna share reviewed the other three. Tax prices stay tune like visual.