All right folks we are back like that you own it. Talking about these tax surprises by -- surprises you don't -- When it comes to deal with -- uncle -- shall -- let's recap -- we've covered so far. Our rights one as unemployment benefits yes Uncle Sam wants is -- of the money he did you come and also alimony received. If you get alimony or separate maintenance yet. You can reportedly got paid tax Maine 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. Did a short sale and the worry if the lender that you -- the money. Ultimately rode off a certain portion of debt you need to ask them are they going to report that. To the IRS has in essence income do you think any of 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 -- taxed on the time we spend together. In as a -- I don't know if it's emotionally and physically 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 income up. That tax law says is taxable it's not just limited to cash awards you have to pay tax on fair market value of any property went so yes. You go to that option to you by that. Crews. They'd you know maybe it's. -- -- to charity and you pay 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 but this much is a non deductible event and also. Some so -- Dennis 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 incumbent. 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 -- income worksheet that is now on your 10401040 day so. Mean Martin as usual probably not have to worry about that because there won't be Social Security money for you if you're under the age of what. What do you -- just 35 or forty and he probably worse than that but you know you probably in the to see 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 or bad. We could backtrack a little bit too with those of you did listen the first segment you know wide. I like that -- -- I wanna get into I know that a lot of people are are renting houses now or and there's more people renting may be the demand is up. On 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 -- its gonna do the formula do the math. Kind of what's their what are their options to purchase an -- 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. Your. Barring the money from somebody else instead of using your cash is an additional piece of profit for potentially. Because he could maybe returning the money in something greater in another investment elsewhere or additional properties -- center of so being able to get alone or an investment property is a huge plus now. Many guidelines depends on who what lender you're working with exactly and what they're internal guidelines are but. Most people are limited down -- four 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 -- going through conventional type financing to purchase of property going through banker -- mortgage lender you're gonna need to put between 20/20 5% 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 a 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 on a thirty year fixed today might be closer to 5% on investment property however with regional sites down payment. And interest rates as those they are here interest expense is gonna be deductible off of your income. And you're gonna have the opportunity to maintain your cash if you did indeed have the cash to -- Pay for the -- out right -- 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 and bringing any more cash flow profits I'll 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 of the greater cash flow it also helps you in times were maybe for some reason here. You get -- to vacate the property stops senior. Tenet free for a couple few months and helped you at the cash flow and a sense -- 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 you're buying this. Then thirty is the way to go -- are older and you may convert to a fixed income assuming Social Security still available and your pension retirement available. The menu gives you could give some consideration go you know wide but 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 your dividend 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 flows that -- kind of warrior you're. Target timing of it yes a little additional aggregate reserves yeah need to reserves than -- -- for that age should have some. Then years that you take care of potentially she's there but remember also well -- bringing it up and who's gonna mention is really quickly. Those of you who -- 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 to save a little bit interest question I think about it the break if you have a paid off home -- and day 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 -- -- mark we are right. OK before we took the break we asked her to talk 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. End you have and it is that equity CF 200000 are inequity in and you've got forty to 50000 dollars in your 40 indicate. Are you diversified. -- either side -- now not at all not not sufficiently you were all in real estate. What is real estate down over the last five your -- dropped and I for the most part in the Muslim gunned down an idea on and that 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 any similar range is one thing -- can tell you that hasn't gone up over the last twelve months. Stock market. All would like a rocket amen now has a real estate come. Come back over the last moments sure so so now it is gained back from 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 encourage you to do the math on that investment whether -- your primary residence or an investment property. You gotta make sure. -- -- take the opportunity to -- consumer but also look at the opportunities to diversify. So if you got a is Craig talked about considering a thirty year vs a fifteen year mortgage is there an opportunity to diversify. On you or by eight. By using a thirty year -- vs a fifteen year to a -- 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. Summary to return hopefully is bitter better than what you're paying that interest and when we say diversification it doesn't mean it. -- diversify or -- for certification which you divert. Your savings into the economy. By Brian junkie can't use were saying you have a plan a budget in investment strategy and you take the difference and you. Diligently and with discipline invest that in vehicles that will be -- -- -- Oh there's that these -- that music should he stay or should you go out and app from Chicago Illinois emailed. Love the show guys thank you and that'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 we're not married. When I bought this house and he has -- credit. -- and 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 -- being placed on our home. What's the best way to prevent this. 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 OK until elaborated 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 going to be contact a local title company. Com and -- and if I can -- even consummate that transaction in not included in title most states you have marital rights now. That separates from if you guys get a divorce what's the value 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 a 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. We can say hey he may be required to be put on and also the attachment of liens that are he has. I'm depending on what they are if their state tax liens that senator -- That's a whole separate issue. That we can't dvd quick answer on so the end of the fact that you are married but marks it with new property laws it's probably. Degenerate -- that you have to title many states do you have Merrill writes waivers that you can sign don't know about Illinois just checking officials as mark said. If your husband can sign a marital rights waiver which is saying he. It -- to acknowledge that he did not have any interest in the property. Then you maintain all interest in the property and they would have a harder time in catching any liens if it could if they could at all. But definitely need to probably -- I don't know how -- a situation is he better kitchen 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 got the well we were talking about those those cities for those -- -- 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 that recommended cities where you may just consider you know plant those routes or you know not the 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 America flocked to the sun belt looking promote taxes cheap living in warm sun is baby boomers retire to the once. Sparsely populated region golf courses and luxury development sprouted up in Vegas Phoenix and a state 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 I kind of wanna go back to the urban war. Com and there is there's a shift of those that are want to -- the big city life for the urban -- urban now feel. And so here this cities that that you can pay a premium and get that -- big urban six. Well 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 of you have been to New York probably know that the pros and cons of living in the 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. 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 is you won't stay tuned back and if you.