Real Estate Investing

Not everyone believes in haunted houses, ghosts, or other paranormal activity.  In college, I once rented a home with two of my friends.  It was an older home on the edge of campus.  We weren’t allowed in the upstairs because the owner still had some belongings there.  The house next door was occupied by an elderly woman who tinkered around her backyard garden a lot.

We had heard someone had died in the house and that it was haunted. We also heard that sometimes you could see a face in the upstairs window.  I never saw the face although I did crack open the door at the top of the stairs once to take a peek.  There were boxes, some lamps, a chair … nothing of great interest.

I went to bed after my roommates one night and as usual the room wasn’t quite dark because of the streetlight outside.  My eyes were growing heavy but I wasn’t yet asleep when I saw my door swing open.  Though I couldn’t see anyone, I heard footsteps walking toward me.  They stopped at my bed, but I couldn’t see anyone.  My heart was pounding when I heard the “person” turn and walk back toward the door.  I watched as the door slowly swung closed and then leaped out of bed.  I ran to the rooms next to mine and both roommates were sleeping soundly.  Eventually I dozed off, but it was an eerie night.

Several weeks later I saw our neighbor in her garden.  I went out to say hello and asked her if it was true that someone died in the home.  What the long-time resident said scared me, “Yes.  A woman was killed by her husband after he came home from drinking.”  “Oh no!  How sad!” I replied.  She added, “In fact, she died in that corner” and she pointed.

I followed her finger and it was aimed directly to where my bed was located.  When I went back inside, I rearranged my room and never had any more night time visitors.

I don’t think I’d want to own a haunted house, but if you’re someone who would like one, there are many to be found online.  In Meaford, near Toronto, Ontario, here’s a house for sale that should be of great interest to people who love ghost-hunting.

The boys were ill at ease and refused to enter certain rooms. One said he woke to a feeling that he was being choked.

“We chalked it up to the children having vivid imaginations and talked to them at length about the inappropriate nature of their stories,” she says.

Things began to escalate: appliances and lights turned themselves on and off, things went missing and turned up in strange places. While they slept, a plaster column in the kitchen smashed as if hit by a baseball bat, and also while they slept, their phones called people.

May the buyer beware.

Former Secretary of the Treasury Paul O’Neill has said Congress should drop it’s latest economic stimulus package in favor of changing mortgage rules to the point that no loan is given without a 20 percent down payment.  According to MSNBC O’Neill said,

In 2006, he says, 30 percent of mortgages had no down payment and a larger number of those buyers defaulted on their first payment.

“That was a strong enough signal we should have shut down this … flagrant abuse of the principles of home finance,” O’Neill said. “It was bound to crater. It was absolutely bound to come down around our ears, which it has.”

If every mortgage was backed by a 20 percent down payment, O’Neill said, the financial system would be protected long-term, even if some individual investments or businesses failed.

This would definitely protect the U.S. financial system in the long run because NO ONE would be able to get a mortgage to buy a house.  If there are no home loans made, there is nothing to lose.  My first house in 1992 cost $88,500.  Although $7,000 doesn’t sound like a lot (5 percent down payment plus 3 percent for closing costs), our gross income as two working parents was about $33,000 per year at the time.  That made finding $7,000 hard to come up with.   

But we had scrimped and saved for six years and finally managed to do it.  However, if it was $17,700 we would’ve had to pay - along with $2655 for closing costs - it would’ve taken 15 years to get into a home.   My point is, there is nothing wrong with asking people to put money down when buying a house, but I believe 5 percent is more reasonable.

My husband and I have never missed a house payment, we’ve never been late on a house payment.  Therefore not every person who puts no money (or as little as 5 percent) down is in default - ready for foreclosure.

However, on the flip side, the benefits of coming up with a big downpayment are tremendous.  Mike Adams of Somerset 08873 writes,

The risk of putting down too little: If the home falls in value and you sell at a loss, you’ll owe more to the lender than you receive from the buyer. In addition, many mortgages require buyers who put down less than 20 percent to get private mortgage insurance, which can add $80 to $100 to your monthly bill. And the less you put down, the higher your loan balance and therefore your monthly payment will be.

I think there should be a happy medium.  I agree that Zero Down programs should accept a large part of the blame for the level of foreclosures we have today.  However, if I had to wait 15 years to buy a house, I would’ve gone bonkers.  The solid compromise, in my opinion, is to go back to the 5 to 10 percent down payment level.

Start saving!

Photo from Lifestyle Options 55.

Fuel prices for the winter will be staggering in my area.  Not only are they already at an all-time high, but my own electric company just raised rates by a whopping 20 percent.  We’re in for some cold, dark nights on the homestead so plan to do everything we can in advance to get our home ready for winter.

Here are some easy tips from the Farmers Almanac that will hopefully save you some dough:

1. Seal windows and doors.  If you can’t afford replacement windows, caulking the outside of the window frame may help keep hot air in and cool air out.
2. Check your furnace and chimney.  Change your filters, inspect and clean your other heat sources. 
3. Buy a programmable thermostat.  You can adjust the temperature based on whether you’re home, at work, awake, or sleeping.
4. Insulate your attic.  A home with no attic insulation will lose about 48 BTUs per square foot on a minus 10 degree day.
5. Payment plans.  Your local electric or gas company may provide a payment plan that averages out utility bills to pay throughout the year rather than you getting clobbered a few months at a time.
6. Find ways to cut costs.  Cancel a premium cable channel, cook more meals in, turn out lights when you leave the room, and clip coupons when you go to the grocery store.  Sometimes the basics can save you a lot!
7. Layered clothing.  Undershirt, t-shirt, long-sleeved shirt, hoodie, coat.  Footies, ankle socks, wool socks, shoes.  Long johns, jeans, sweatpants.  Stay warm!
8. Reverse your ceiling fan to blow warm air down from the ceiling.
9. Open the curtains during the day, close them at night.
10. If you rarely use a room, close the vents and and door so save energy.
11. Water heater can be adjusted.  Not only can you turn the temperature down, but you can also install a timer to shut if off during the day when you’re gone (like the thermostat!).

The Farmers Almanac offers many other outstanding articles, from how to pick out a perfect pumpkin to how persimmon seeds can predict winter.  Go there in haste to enjoy the great ideas and insights!

My own suggestions…

• Get a cat or dog to curl up in your lap for warmth.
• If you have a no-pet-policy, get a lap blanket like an afghan.  Make sure it’s long enough to cover your feet.
• Try not to use the fireplace on bitterly cold days because once the fire is out, the flue will have to remain open until all the coals are cold.  Even if you have doors on your fireplace, warm air will still be lost up the chimney.
• Check the weather stripping on your doors.  Not only will it help keep out the cold, but weather stripping in good condition can also keep out the spiders that are trying to get in this time of year.