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Investing In Real Estate

Sometimes when people buy their very first home, they think more about the interior finishes than they do about their overall investment. Unfortunately, since your home is one of the largest expenses you will ever have, investing in the right property is crucial to your overall financial success. I have purchased several homes over the years, and understanding how to find the perfect house is crucial to your success. This blog is all about investing in real estate to improve your personal situation, so that you don't have to worry as much about making that next mortgage payment. By choosing the right place, you can enjoy your neighborhood and your financial situation.

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The Percentage Of No Return: How To Prepare To Spend More Than 30% On Rent

The hard and fast rule of many apartment complexes and financial gurus is that your rent or mortgage payments should be no more than around 33% or one-third of your income. If you have a lower than average income, or if you live in a high-priced city, you may not be able to follow this rule. If you need some tips and tricks on how to find and maintain a rental while spending more than the traditional 30% of your monthly income, here are some methods to use.

Figure out what is realistic

If you are in a city with expensive rents, landlords will be less phased at you spending more than the desirable average on rent from your income. However, you must come up with a budget that is realistic to continue for the duration of the lease. Making $6,000 per month and spending $3000 per month on rent can be much different than making $2000 per month and only having $1000 to live off after rent. Make a budget of your realistic needs including debt repayments, food, and necessary expenditures, then determine just how much you can comfortably put towards rent.

Prove prior responsibility to landlords

If you have a good rental history and no credit issues that involve recent late payments, you may be able to convince your landlord to allow you to take on a rental that is more than 30% of your monthly income. If your previous rental was more than the 30% and you were able to handle it with ease, your landlord will feel more relaxed. The best way to prove this is to get a glowing review from your prior landlord. If your landlord also accepts a guarantor, you can find a relative or an institutional guarantor to sign on your lease to put your landlord at ease.

Have rent transferred into a different account

The old saying is, you can't miss what you never had. This can be true of life, and this can be true of rent. Divide up your paycheck and have the total amount of the rent put into another account that has no outside access, such as checks or charge cards. Set this account up for bill pay directly to your landlord or rental company. This will subtract any issues of you overspending and being a little short due to your tight budget.

Have a contingency plan

Life happens, but you can be prepared. Come up with a contingency plan of what to do if you find apartments for rent that accept you, but you suddenly have issues paying. This plan could include having a relative or employer who is on standby to help pay rent, or offering up your home as a temporary vacation rental to make a few extra dollars. Having a contingency plan in writing will keep you focused and properly reactive should you come up short one month. Contact a company like Sterling Realty for more information.