Happy Valentine’s Day to all who celebrate it! I would also like to wish my wife of 19 years a Very Happy Anniversary today!
The image above shows the numbers for the local real estate market from the last 7 days. I shared last week’s numbers on social media but decided to use this as an opportunity to also share them as an article here.
New Listings are a little bit lower than the numbers from last week. Since I am just beginning to observe these numbers, I don’t have a working theory on why they dropped. It’s possible that the holidays have impacted it, but I have no evidence to show that for certain.
New Contracts have also dropped since last week’s reporting. Again, further study is needed to get a handle on why that is. It could just be a natural fluctuation.
Closings are only down by 2. Closings are a function of contracts signed in the past. Duhhh…that’s obvious! They are a lagging indicator of contracts written anywhere from two to six weeks ago, typically, but could be from a longer or shorter timeframe.
Overall, things seem to be staying busy…lots of buyers looking, not nearly enough inventory on the market.
Remember, if you have a real estate need, whether buying or selling, give me a call or shoot me an email. It doesn’t matter if you are outside of my area, I can connect you with a Rockstar Real Estate Agent!
Clint C. Galliano, a native of Lafourche Parish, has lived in the Houma-Thibodaux area for over 36 years and is currently a REALTOR® with Keller Williams Realty Bayou Partners in Houma, La. He has been involved with real estate investing since 2017 and hosts the local Real Estate Investment Association. Real Estate is his passion. Clint previously worked in drilling fluids and drilling fluids automation for 28 years. He lives in Bayou Blue with his wife and two daughters.
This week, we are going to talk about spending, spending habits, and debt. As I related in a couple of previous posts, My History With Money, Pt. I & My History With Money, Pt. II, I had a bit of a spending problem. While the majority of my debt was from my mortgage, I was having trouble keeping up with payments and just keeping cash on hand. Hopefully, I will be able to provide you with some insight into why we spend and get into debt.
First, here are some statistics I gathered on income and spending in the US:
The average pre-tax income for people living in the US in 2016 was just under $75,000.
The average annual expenditures for people living in the US in 2016, including food, housing, transportation, discretionary spending, and insurance was slightly over $57,000.
Add to that, the average amount of taxes paid between local, state, and federal in US as of last year is about $10,500.
What you wind up with is about $8,000 a year (or $666.67 per month) of savable/investable income, based on averages.
The problem with averages is that it smooths out all of the variations in the data. In simpler terms, not everybody can recognize that excess money at the end of the year.
Here’s another bothersome statistic: 43% of Americans in the US spend more money than they make, according to the Federal Reserve.
The most common reasons people spend more than they make.
How to address the reasons listed above
If you are in the situation where you are spending more than you make and/or are in a lot of debt, the first thing to do is commit to changing your habits and then doing some things to change your situation.
Be aware of what money you have coming in and what money you are spending. Break out your spending between necessities and discretionary. Necessities are electricity, water, gas, mortgage/rent, food, transportation. Discretionary spending covers items like cell phones for every member of the family, cable, internet, visits to the casino, cigarettes, beer, and similar things that are not vital to your survival.
Figure out approximately what percentage of your monthly income is needed to cover each necessity and allocate a little more than that requirement to be put aside to cover each one. I suggest putting cash into envelopes labeled for each one. By putting a little more into the envelope, that will help to cover variances in income and costs. This idea is actually based on the ideas put forth in the book Profit First by Mike Michalowicz. The book is aimed at entrepreneurs trying to get their business to a profitable state, but the principles apply to personal finance, also.
They KEY thing is to not touch the money once you put it aside unless you are paying the bill it is dedicated to.
Make sure you are also able to put aside an emergency fund. The amount should be approximately three times your monthly income/take home pay. This goes a long way towards keeping your life steady in the event of bad weather, vehicle breakdown, illness, etc.
Try to stick to only spending on necessities until you are comfortably out of debt. Then start looking for ways to invest some of your “profit” to make you more money. (Since I am not a financial advisor, I can’t offer advice on how to invest that money, but I will cover my thoughts on the matter in a future post.)
Only use them if you have the money to pay for what you are purchasing and can commit yourself to not spending the cash on anything other than paying your credit card bill. If you have a balance on your credit card, don’t use it at all until the balance is paid off. Only then should you use a credit card to buy stuff.
If you already have a balance on your credit card or even multiple cards, work on paying off those balances first. There are two approaches to methodology when doing this, either start paying extra on the card with the highest interest rate and balance, if you can make yourself do that regularly without getting disappointed or pick a card with the smallest balance and pay it off first. This will give you a self-esteem boost by way of accomplishment.
DON’T PUT ANYTHING ELSE ON THAT CARD!
After the first one is paid off, take the monthly allotment of your income that was dedicated to paying off that card and start adding it to what you are paying on the next card. Keep doing that until all of your cards are paid off.
PAY OFF YOUR BALANCE EVERY MONTH!
This is crucial for not accumulating debt. It may even be better for you to have a charge card like American Express, where you are required to pay it off every month.
Don’t “float” your balance from one new card to another without paying it off. It ends badly.
Psychological Reasons for Spending
We are constantly being bombarded with advertising trying to influence us to spend money. Whether it is buy a new car, get the latest phone, or use our credit card to buy your dreams. Advertising implies that if we don’t spend, we are a lesser person. Don’t believe it!
Yes, you do need some of the things you see advertised, but you don’t need to go broke or get in debt to get it.
Buying things to feel better about yourself actually make you feel worse in the long run.
DO something to change the things in your life you don’t like. Don’t waste time worrying about the things you can’t change, because it will only make you feel worse.
Below is a list of recommendations for tenants from an article by NOLO Press. (Click the link to read the full article and see respective offerings from NOLO.) Each has a short description from the article. In addition to that, we have added further commentary from JJR Holdings’ perspective.
Bring your paperwork.
The best way to win over a prospective landlord is to be prepared. To get a competitive edge over other applicants, bring the following when you meet the landlord: a completed rental application; written references from landlords, employers, and colleagues; and a current copy of your credit report.
JJR Holdings: Showing up with a completed rental application and any supporting documentation definitely helps to ease tenant screening and cut down decision making time. It also demonstrates that you are a responsible person.
How to Get a Copy of Your Credit Report
You can order your credit report by mail, phone, or online at www.annualcreditreport.com or directly from the websites of the three major national credit bureaus:
Carefully review all of the conditions of the tenancy before you sign on the dotted line. Your lease or rental agreement may contain a provision that you find unacceptable — for example, restrictions on guests, pets, design alterations, or running a home business.
JJR Holdings: We like to review each clause of the lease to ensure there are no misunderstandings on responsibilities on our side as the property manager or your side as the tenant.
Get everything in writing.
To avoid disputes or misunderstandings with your landlord, get everything in writing. Keep copies of any correspondence and follow up an oral agreement with a letter, setting out your understandings. For example, if you ask your landlord to make repairs, put your request in writing and keep a copy for yourself. If the landlord agrees orally, send a letter confirming this.
JJR Holdings: We are set up to communicate via email, text, and telephone. We prefer to use email and text specifically for documentation purposes.
With regards to requesting repairs or maintenance, we have an online maintenance request form. All you have to do, as a tenant, is go to the form, fill out the information, and we will arrange for an appropriately quick remediation.
Protect your privacy rights.
Next to disputes over rent or security deposits, one of the most common and emotion-filled misunderstandings arises over the tension between a landlord’s right to enter a rental unit and a tenant’s right to be left alone. If you understand your privacy rights (for example, the amount of notice your landlord must provide before entering), it will be easier to protect them.
JJR Holdings: We respect the privacy of our tenants and generally leave them alone. When we do need to enter a dwelling, we provide a minimum of 24 hours notice, unless it is an emergency or the tenant has requested an immediate visit.
In the event of contractor-provided services, such as air conditioner repair or pest control, the individual providers coordinate directly with you, the tenant, to arrange scheduling.
Know your rights to live in a habitable rental unit — and don’t give them up. The vast majority of landlords are required to offer their tenants livable premises, including adequate weatherproofing; heat, water, and electricity; and clean, sanitary, and structurally safe premises. If your rental unit is not kept in good repair, you have a number of options, ranging from withholding a portion of the rent, to paying for repairs and deducting the cost from your rent, to calling the building inspector (who may order the landlord to make repairs), to moving out without liability for your future rent.
JJR Holdings: We, as the property manager, strive to provide out tenants with a comfortable, habitable place to live. To do this, we take maintenance and repairs seriously and request that you, as the tenant, report all maintenance issues, as defined by our lease, to us immediately using the maintenance request form, mentioned above.
Talk to your landlord.
Keep communication open with your landlord. If there’s a problem — for example, if the landlord is slow to make repairs — talk it over to see if the issue can be resolved short of a nasty legal battle.
JJR Holdings: We encourage communication, even if it is only an email or text saying everything is hunky-dory.
Purchase renters’ insurance.
Your landlord’s insurance policy will not cover your losses due to theft or damage. Renters’ insurance also covers you if you’re sued by someone who claims to have been injured in your rental due to your carelessness. Renters’ insurance typically costs $350 a year for a $50,000 policy that covers loss due to theft or damage caused by other people or natural disasters; if you don’t need that much coverage, there are cheaper policies. For more information about renters’ insurance, see this previous post on the subject.
JJR Holdings: While we don’t require tenants to hold renter’s insurance, we strongly urge it, as it protects you form damage and liability.
Protect your security deposit.
To protect yourself and avoid any misunderstandings, make sure your lease or rental agreement is clear on the use and refund of security deposits, including allowable deductions. When you move in, do a walk-through with the landlord to record existing damage to the premises on a move-in statement or checklist.
JJR Holdings: We use a move-in check list to document the condition of the rental as we go through it with the new tenant. We also document the whole property with video and save it, along with the check list, to ensure that we don’t forget about the condition of something when settling repairs against the tenant’s security deposit after move-out.
Protect your safety.
Learn whether your building and neighborhood are safe, and what you can expect your landlord to do about it if they aren’t. Get copies of any state or local laws that require safety devices such as deadbolts and window locks, check out the property’s vulnerability to intrusion by a criminal, and learn whether criminal incidents have already occurred on the property or nearby. If a crime is highly likely, your landlord may be obligated to take some steps to protect you.
JJR Holdings: We do our utmost to ensure our tenants’ safety. We provide deadbolts and/or a secondary locking mechanism for all doors on our properties.
Deal with an eviction properly.
Know when to fight an eviction notice — and when to move. If you feel the landlord is clearly is the wrong (for example, you haven’t received proper notice, the premises are uninhabitable), you may want to fight the eviction. But unless you have the law and provable facts on your side, fighting an eviction notice can be short-sighted. If you lose an eviction lawsuit, you may end up hundreds (even thousands) of dollars in debt, which will damage your credit rating and your ability to easily rent from future landlords.
JJR Holdings: We don’t like evictions and do our best to avoid them.
If you have ever rented a home, you know first hand how stressful the process can be. Not only are you consumed with finding the perfect home, but the contract process can be overwhelming once you do. With so much information to digest, it is common to overlook important questions that you should be asking. Below are three important inquiries that should be confirmed before entering into a lease agreement:
When is rent due and how can payment be remitted? If you have rented a home in the past, you may have been fortunate enough to be provided with a grace period. However, it is becoming more and more common that property management companies are requiring rent to be paid by the 1st of the month and the late fee can be significant if it is not received on time.
It is also important to inquire how rent can be paid. Most property managers and landlords now have the capability to accept online payments. This can make paying rent extremely convenient and help to avoid any late fees, especially if automatic payments can be setup.
How are maintenance requests submitted and how long does it take to address the issue? One of the primary benefits of renting from a property management company is that maintenance requests are usually taken extremely seriously. Before signing the lease agreement, it is important to clarify how maintenance requests are to be submitted and what phone number should be used for emergency situations. Most property managers will want the issue to be submitted in writing and have the capability to accept the maintenance request online. It is also very important to ask how long it typically takes to respond to these requests and the timeline to resolve most issues.
How can the lease agreement be terminated? When entering into the contract, the last thing you are probably thinking about is canceling your lease agreement; however, the fact of the matter is your situation may change and it is important to outline the process for early termination. Most property management companies do have policies for this situation and will offer an early termination option. Before entering into a lease agreement, it is extremely important to confirm this policy and how much is charged for breaking the agreement early.
I hope that you never are in a situation where you enter into a lease agreement before receiving all of the important information. Always remember that it is better to ask a lot of questions and be comfortable with the decision than sign a contract and regret it later.
If you have never rented a home from JJR Holdings before, you can expect a totally different experience than renting directly from an owner. There are definitely pros and cons when renting from each, but the benefits from renting from JJR Holdings will far outweigh the drawbacks. One of the key differences between each is the cost associated with leasing the property. Although each property manager will charge different amounts, below is a list of the some of the typical fees that are associated with renting a home from a Salt Lake City property management company:
Application Fee– This is charged to a tenant when applying for a property. This fee typically covers the cost of the background and credit report when screening a prospective tenant. JJR Holdings currently does not charge this fee.
Lease Origination Fee – This is charged to a tenant when a new lease agreement is created. This fee typically covers the work associated with underwriting a new lease agreement. JJR Holdings does not charge a lease origination fee.
Late Fee– This is charged to a tenant when rent is not received on time. This fee is a flat $50. It is assessed when rent is not paid by the end of the courtesy grace period, after the due date.
Service of Notice Fee – This is charged to a tenant that has not complied with the terms of the lease agreement. This fee is associated with the process of JJR Holdings property manager posting a notice for the tenant to correct the lease violation or risk eviction.
There can be other fees associated with renting. I always recommend inquiring about all of the applicable costs before entering into a lease agreement.
If you are a tenant that is interested in renting a home in Houma or Thibodaux, please consider renting from JJR Holdings. You can preview a list of our available properties here. For additional advice, check out this article from Time.com
Moving to a new city can be a life changing moment for most people. It is important to know how to avoid scams when looking for a new apartment, in an area that you are unfamiliar with. Here are something’s to be aware of in order to help you avoid those scams.
There are a lot of scammers that take and use a real listing from, a real home rental or real estates and claim it as their own, they will take these already written listings and make a few modification, by changing the email address or other contact information to include their own information. They might even use the same name as the original poster and only change the picture and contact information, just to confuse you.
The best sign that the listing is a scam is if they request you to wire money over. There is no reason for you to wire money over, not matter what the reason may be. Some reasons could be paying a security deposit, vacation rental, or application fee, there is never a good enough reason to wire money, because once the money is wired there is no way for you to get that back. So beware if a listing for a rental home is asking you to wire some money for a security deposit, or application fee it is most likely a scam.
Another thing to always remember is, if the deal is too good to be true then it probably is. Most scammers will take all of the real information for a home rental listing, but list the price below the average rental rate in the market, that is an easy sign tell whether or not the listing could be a possible scam.
These are some of the basic things that you must look out for when looking for to a home rental, the best way to avoid these kinds of mishap is to hire a real estate agent, and discuss your concerns with them. If you choose to continue the search by your self always be aware that if they ask you to wire money, that is a safe assumption that the listing is a scam, and remember that if they deal is too good to be true, then it probably is.
You might be asking yourself – what is renters insurance and why should I pay for it? Unfortunately, there is a common misconception for renters that they don’t really need to carry this insurance and that it has no value. Unless you have ever been in the unfortunate situation of having to make a claim, you might not fully appreciate this as a necessity.
Below are three reasons why every tenant should have a renters insurance policy:
Reason #1: Renters insurance covers your personal property – If you stop and think about everything you own and assign a dollar value to all of your possessions, it will probably surprise you how much you own. A renters insurance policy will help replace your items in the event of theft or destruction by a fire.
Reason #2: Renters insurance covers liability from negligence – Consider this scenario…it is a windy day and you don’t have the time to sweep the driveway. An individual slips and falls and breaks a bone. Since your negligence caused the injury, you are liable for all of costs associated. Another situation where renters insurance would be critical is if a fire was caused by the tenant’s negligence. This would also result in the tenant being responsible for the cost of replacement of the home, which many individuals would not be able to cover without renters insurance.
Reason #3: Renters insurance covers additional living expenses – Have you ever thought about what you would do if a fire or natural disaster made your current rental home un-livable? Renters insurance will help pay for your living expenses under this scenario. As a tenant, this peace of mind can be priceless.
If renters insurance is something that you may be interested in, I would recommend contacting your local insurance agent for more information.