All right folks we are back life as you own it. Talking about these tax surprises five. Surprises you don't want. When it comes to deal with a -- seen him so -- let's recap mark what we've covered so far. All right one as unemployment benefits yes Uncle Sam wants is cut of the money he gave you and also alimony received. If you get alimony or separate maintenance yet. You get it reportedly got paid tax -- on that as income. Also forgiven debts. I'm so and we talked about this in the form of mortgage folks you got to understand if if you were. Get a short sale and dory if the lender that you owed the money. Ultimately rode off a certain portion of debt you need to ask them are they going to report that. To the IRS as in essence income do you think you need you to 98 on that because it. Truly is income do you and its most practical sense. So make sure you understand that are right prize winnings Craig did you know. Other than the fact you get to meet here with me every now -- taxed on the time we spend together. -- -- among rattling -- -- -- emotionally and physically yes taxing it is deaths. So I think you're pretty lucky visual 1000 dollars and or radio contest. Well guess what prize winnings are included in the long list of other in come out. That tax law says is taxable and it's not just limited to cash awards you have to pay tax on fair market value of any property went so yes. He go to that option -- you -- that cruise. They had you know maybe it's. You -- to charity any you paid 3000 dollar storage. And they associated will send some form of cost of what that Cruz was maybe that's the Cruz was the value was 15100 dollars and in the other 15100 -- able to deduct but. Folks unfortunately that amount you paid. Is actually not income you can deduct so it's not so much as a taxable event this much is a non deductible went on and also. Some Social Security -- benefits so I'm generally so security benefits are your only income your benefits are not taxable but if you collect Social Security plus other income. As much as 85% of those government checks could be subject to tax. You can figure out just how much it will cost you but you've got to do on the they income worksheet that is now on your 10401040. Day so. Many are in the future will probably not have to worry about that because of being Social Security money for you if you're under the age of what. What do you -- -- 35 or forty and he probably worse than that but you know you probably in the to -- them. There they go well that's another show. It's okay -- Craig anything else that you want to touch on that as far is any good -- -- -- to backtrack a little bit. Two with those -- you did listen the first segment you know wide. I like that -- sealed I wanna do it and I know that a lot of people are are renting houses now or and there's more people renting maybe the demand is up. And it is an opportunity if there's still some some deals to be had on the purchased. And so let's talk about what's financing opportunities for someone that's gonna do the formula do the math. Kind of what's their what are their options to purchase and and and dip their toe in the the landlord. Market well there are there's some great options to finance and that's something that you'll want to take advantage and in fact if you're getting a good return. You're. Barring the money from somebody else instead of using your cash is an additional piece of profit for a potentially. Because he could maybe turning the money in something greater in another investment elsewhere or additional properties -- center of so being able take out alone on -- on investment property is a huge plus now. Many guidelines depends on who what lender you're working with exactly in what they're internal guidelines are but. Most people are limited data for properties so you can't go and buy ten properties and have loans on all of them in less you have some private mortgages or something like that. In general if you're looking you're going through conventional type financing to purchase of property go through banker or mortgage lender you're gonna need to put between 2125%. Down. Have decent enough credit. And you can expect to get a rate that's anywhere from quarter to three quarter percent higher than what the primary residence rate would be generally it's about a half a percent. Split the difference right down the middle there. So you may see their rates are in the mid fours a thirty year fixed today might be closer to 5% on an investment property however with regional sites down payment. And interest rates as -- as they are here interest expense is gonna be deductible off of your income. In you're gonna have the opportunity to maintain your cash if you did indeed have the cash to -- Pay for the you don't outright buy that property using financial options are huge plus now I will also add some people suggest that fifteen year mortgages. Are the best thing for an investment property to the properties being paid off more quickly and eventually becomes mortgage free. Well you're still raining -- bringing any more cash flow profits I will tell you I disagree with that. You should always do long longer term -- thirty year fixed if it's a property planned to hold for five to ten years take a look at an arm. In potentially save yourself quite a -- and interest. If it's something that you plan to hold indefinitely do a thirty year fixed have a lower payment have a greater cash flow it also helps you in times were maybe for some reason your. You've got a tenth at eight vacate the property stops paying your -- free for a couple few months it helps you with the cash flow in that sense tip. One consideration I'd say in the that time horizon were a fifteen year. If you're older and you estimate and I I think it's good so Craig. That that the peace there is if you're younger -- buying this. Then thirty is the way to go as are older and you may convert to a fixed income assuming Social Security still available and your pension retirement available. Venue gives you could give some consideration go you know wide. I'll have this bad way paid off when I'm 65. So I'd say the one little piece I'd put there is considered the older you are when you're dipping in for the first time. You may consider going to hey. Paid off when I'm on a fixed income so I'm not trying to identify how to make the cash -- that -- kind of warrior you're. Target timing that yes a little additional again reserves yeah need to reserves and I'm -- -- for that age should have some. Then yet that you take care of potential issues there but remember also well -- bringing it up and who's gonna mention this really quickly. Those of you who are having the year your future retirement one of the things you earmark is a paid off home. Please do the math before you find yourself in the situation where you're looking reverse mortgages or some other solution here problem. Having a paid off home does not eliminate the expensive realistic taxes and insurance on the home for any of that. You're only a save a little bit interest question I think about it the break if you have a paid off home month and -- it is your largest asset by far. Are you diversified. Or not to life as you wanted to stay tuned for the answer when we come back. All right we're back we're -- mark we are right. OK before we took the break we start talking about the concept of diversification OK we didn't talk about it too much we just mentioned that. If you have eight. 200000 dollar house and you -- what nothing on its. And you have and it is that equity CF 200000 dollar in equity and then you've got forty to 50000 dollars in your 40 -- Are you diversified. Our -- -- -- no not at all not not sufficiently you're all in that real estate. What is real estate down over the last five your strike dropped and I for the most part is the most plugged on down an idea on and -- for many people went down. Such a significant amount they don't walk away from that investment. Folks if you were diversified today you would watch your balance sheet. Possibly go down some or possibly stay -- similar range is one thing -- can tell you that hasn't gone up over the last twelve months. Stock market. -- like a rocket -- that now has a real estate come. Come back over the last moments sure so so now it is gained back a third of what it lost since its peak. But again just like purchasing a stock. An investment in real estate is just that is an investment standing on your time horizon and your appetite or threshold for risk -- It may be a great investment. Or it may be a bad investment that's why we've in -- -- to do the math on that investment whether it's your primary residence or an investment property. You gotta make sure. -- you take the opportunity to educate consumer but also look at the opportunities to diversify. So if you've got to a as Craig talked about considering a thirty year vs a fifteen year mortgage is -- an opportunity to diversify. On you or by -- by using a thirty year -- -- a fifteen year to a cracked it yes yes because you've got more cash -- work within that additional cash look at me going into some other liquid asset that you can move around investment. It summary to return -- is good or better than what -- -- in net interest and when we say diversification it doesn't mean you diversify. Or diverted vacation which you divert. Your savings into the economy. I've -- junkie can't use were saying you have a plan a budget an investment strategy and you take that difference and you. Diligently and with -- discipline invest that in vehicles that will be -- return. Oh there's the music love that music should stay or should you go out and now from Chicago Illinois emailed. Love the show guys thank you and it's I have learned a lot as I've been listening here's my question. Does it make more sense for me keep my home in my name and make all the payments out of my bank account if my husband and I were not married. When I bought this house and he has -- credit. -- in the middle of a refinance and they asked if I wanted to put my husband on title. But not on the loan my fear is that is is that his poor credit were sold in greens being placed on our home. What's the best way to prevent list. Short answer -- stay with what she's been and keep her name on. Title in alone keep her husband often. That's the quick answer at this -- ago answer yet. Now let's elaborate okay -- -- elaborate as the most states there are many states that may or may not require you know I don't know Illinois law necessarily know about consult an attorney indoor. An easy way to get the advice for free is gonna be contact a local title company. Com and -- and if I can -- -- consummate that transaction not included in title most states you have marital rights now. That separates from if you guys get a divorce what's -- site asset when you -- -- vs when you get divorced it's separate conversation. But there are -- for rights they can in prevent somebody from entering into a contract on real estate. Without the agreement and when you refinance. You are renegotiating that contract so at the surface level. Hot spot I agree with Craig is hate no need need to put him on the but when we dig a little deeper -- -- and say hey he may be required to be put on and also the attachment of liens that are he is. I'm depending on what they are if their state tax liens that -- up. That's a whole separate issue. That we can't give -- -- cancer and so yeah and if the fact that you are married -- -- at this new property laws it's probably. Did general requirement that you have the title many states do you have Merrill writes waivers that you can sign. Don't know about Illinois just -- just -- -- as mark said if your husband can sign a marital rights waiver which is saying he. Can change acknowledging he did not have any interest in the property. Then you've maintained all interest in the property and they would have a harder time catching any liens if it could if they could at all. But definitely need to probably -- I don't know how bad a situation is he better -- that -- console that probably real estate attorneys to protect yourself depending on how grave the situation may be that her husband. You got it okay Cragg whilst we have to -- well we were talking about those those cities for those it views that are. That are you may be budget conscious but your budget happens to be not appear budget the more the champagne budget right. We have five recommended cities where you may just consider you know plant those routes or you know not -- retirement. Okay so in the United States there are five expense of cities and I -- that you can now probably get some of them but in the twentieth century many retirees. On the America flocked to the sun belt looking for low taxes cheap living in warm sun is baby boomers retire to the once. Sparsely populated region golf courses in luxury development sprouted up in Vegas Phoenix Santa Fe and new mex in Phoenix and Orlando. But since there is a chain -- there is change come -- folks there are. The the baby boomers are starting to think more along the lines of -- kind of wanna go back to the urban war. Bomb and there is there's a shift of those that are -- of the big city life for the urban -- urban feel. And so here this cities that that you can pay a premium and get that -- big urban fix. When one number one analyst Craig what do you think it is. New York city New York City baby are right the biggest expense. In the city of New York. Is that rents. Shocker it is expensive to live in New York so while you've got all Medicare for all that a big city affords you. You've got a lot to afford in that big city that those need to bend in New York probably know the the pros and cons of women in the concrete jungle. And it can be fantastic lifestyle for those that are prepared to pay for it. And see the value that San Francisco. We know that's another cool place to live that is not -- San Jose California. Honolulu Hawaii. And Stamford Connecticut it's all places. That are not cheap to live of but also I think we can agree have some pretty cool opportunities for those you want a little bit of culture. And on on a budget life -- you won't stay tuned back and if you.