Figuring out whether to file a homeowner’s insurance claim can be a challenge. After all, you pay for coverage to help you after an incident, so putting it to use seems wise. However, there are risks for filing, and some of them can cost you big. With that in mind, here are some of the pros and cons of making a homeowner’s insurance claim.
When you buy stuff – smartphone, cars, computers, lawn mower—they usually come with a warranty. A warranty helps you to cover the cost of repair or replacement when such devices become damaged. You can also pay an extra for an extended warranty that keeps the manufacturer or seller under obligation to fix or repair the item if it breaks down even after the regular warranty period. What many people don’t know however is that you can buy a warranty for your home.
A home warranty is simply a policy that provides coverage on the cost of fixing or replacing home appliances when they become damaged. A home warranty is different from a home insurance in that while home insurance covers the structure of your house, the home warranty covers the appliances and systems in the house. More so, it is somewhat compulsory to have homeowners insurance but a home warranty is optional; yet, below are three reasons you should seriously consider buying a home warranty.
Save money on repairs
Repairs on home appliances and systems are usually costly; unfortunately, nothing lasts forever and home appliances have a tendency of breaking down at the most inopportune moments. A home warranty typically covers systems such as plumbing, electrical, washer and dryer, HVAC, and kitchen appliances. A home warranty saves you from having to spend money out of your pocket to repair these items when they break down.
When an item under the home warranty coverage breaks down, you call the warranty company and they’ll send someone over to fix the item. If it can’t be fixed, you can reasonably expect the home warranty company to bear the cost of replacement. ReviewHomeWarranties provides insight on companies that offer home warranties so that you can find a local provider that offers excellent coverage at fair prices.
Escape the stress that comes with home ownership and maintenance
Home ownership is fun and exciting, until the hidden costs of homeownership begin to take a toll on your wallet and your emotional sanity. A homeowner spends more money, effort and time on home maintenance than a renter because there’s no other landlord or property manager to call – the buck stops at your door. Hence, homeowners could find themselves under immense stress and pressure when their home appliances breakdown and they have to navigate the maze of finding and working with contractors.
A home warranty takes the stress out of homeownership because the warranty company does the heavy lifting of keeping your home systems and appliances in top shape. You also don’t have to worry about finding the right contractor because the warranty company has established relationships with licensed technicians who will fix faulty appliances. Hence, you don’t have to spend countless hours reading reviews or worrying about whether the technician has enough insurance.
A home warranty helps you sell your home at a better price
Buyers are very selective when buying real estate – they look at the structural integrity of the house, the state of systems, appliances, and fixtures, and they look at the curb appeal among other things before they decide to buy. Hence, if your home is in a state of disrepair relative to other houses in the same market, your house will probably be the last to sell, and even at a ridiculously cheaper price. A home warranty ensures that your house doesn’t fall into a state of disrepair because you didn’t have the funds or time to facilitate timely repairs when things breakdown.
More so, buyers don’t want to start spending money on fixing home appliances and systems soon after moving in – it could be very frustrating dealing with a clogged toilet barely two weeks after moving in. Buyers will be more inclined to purchase a property that has a home warranty because it offers them protection in the event that one of the home systems break down after they close the deal.
Housing affordability is a hot topic for the Australian media, real estate agents and economists. Although parts of the country are buoyant to the point of overheated (here’s looking at you Sydney), other parts are largely neglected in a fear inducing narrative that declares us to be in a housing shortage. The reality is that market demand for certain types of properties in specific hotspot locations is driving prices up. If you want a beautiful and cheap home in Melbourne, you might be looking for quite awhile if this translates to a 10 or even 15km radius from the CBD. However, if price is a more pressing priority, you have other options to that will help you find a more affordable home.
In areas that have already experienced exponential growth, there are a few tips for finding properties that traditionally will fetch a slightly lower sale price. These include proximity to major arterials or public transport. Many people prefer to live within walking distance of transport, but not so close that the noise will affect them. Therefore, a house with a train line over the back fence will generally be more affordable at auction or private sale. Similarly, inner suburbs that offer subdivided plots that have town houses on them will also fetch lower prices than their stand-alone compatriots, especially if there is less or no outdoor living space. Over time these typically increase in value faster than apartments, but slower than detached houses.
Attached properties are often found in the inner, inner suburbs so despite their proximity to one another, they can still be expensive. You can still snap up a cheaper one if it’s in need of significant DYI, but be wary of heritage overlay as many are unable to be demolished for this reason. Other more affordable options for inner areas include apartments in large high density blocks, although some experts are tipping a decline in their value over the medium term.
In any area, you could offset the cost of your mortgage by offering it on accommodation rental sites like Stayz, Homeaway or Airbnb, but of course, you’ll need somewhere cost effective to stay whilst it’s occupied to make it worth your while.
Casting your property search slightly further out is the easiest way to snap up an affordable home. For the best value, with proximity to facilities, consider the fringe of one of Victoria’s regional towns such as Ballarat or Bendigo. In addition to stamp duty abolishment for new home buyers on homes under 600k, there is also a 20k first home buyers grant for those purchasing in regional areas over the next three years (from July 2017).
Another way to access affordable housing is to purchase then rent out a home in an area while you rent in the location that you cannot (yet) afford to buy in. To do so, you should spend some time targeting areas that will have consistent rental tenants as well as a property that will be easy to maintain.
Buying your first home is a huge milestone that can be a very exciting experience in your life. This does not mean that it doesn’t require a lot of hard work and due diligence. Whether you are months out from looking or you are already in the process, it is never too early to start preparing for the big purchase. By following some of the tips below you will be well on your way to purchase the home of your dreams.
Know what you can afford. The Internet proves to be a great place to start when it comes to pricing out your home and what exactly you can afford. There are several online calculators that are very detailed in the process they take to calculate the amount of house you can afford. Such considerations in these calculations are property taxes, homeowners insurance, escrows, etc. This exercise helps you prepare by allowing you to create a budget which is crucial when you own a house.
Research for a reputable lender or mortgage broker. Being able to work with a mortgage broker on your first mortgage is well worth the legwork that is required to find one. Securing a good lender will hopefully pay you back tenfold in that they usually know of incentives or ways to save time and money in the home buying process. Do not automatically go with the least expensive banker. Make sure that you have done thorough research before committing to working with someone. With the amount of time that you will spend working with this person, you will want to make sure that they are someone you can get along with easily.
Save up on a down payment. Despite the fact that you may not need a large down payment on a home, it is not to say that you should not save for one. The more that you are able to pay down on a house, the better the rates you will be able to secure. Depending on your particular situation you most likely will want to put down at least 20 percent of the purchase price. This not only allows you to pass on paying mortgage insurance, but you will also be able to take advantage of lower interest rates.
By following these simple tips, you are well on your way to owning your first home. The journey is a long and sometimes trying one but in the end your new home will be well worth it.
Real estate investments seem to be a reliable way of making money in these tough economic times. However, there are number of traps to be wary of in order to protect your investments.
1. Insufficient Research
Often an investor will fail because they purchase the best home on a street that is in an unsuitable location, or in an area that’s run down due to the economic times. It’s important to do your research and choose a wonderful property that’s in a desirable spot. To be able to recognize the flow of your investment, check the listings over the past ten years. This will give you an idea if the market is depressed or if the costs are on the rise. Run a list of the comparables in the area you’re thinking of purchasing also and see how they have fared. For an expert opinion, think about hiring a professional estate agent to help you with the process.
2. Exceeding What You Can Afford
The primary goal of investing is to spend only what you have figured within your budget. Make sure you know your limits and try not to get caught up in the enthusiasm of the projects at hand. Real estate is a long-term investment and you won’t reap the rewards immediately. It takes time for your property values to rise and for them to generate sufficient money. You will also need to factor in any necessary improvements and renovations. When it comes time for making home improvements, be conservative and choose only the projects that will add value to your property first.
3. Not Having an Emergency Plan
An investor can fail in the real estate market if they don’t have an emergency plan ready in case something goes wrong. Today’s economic climate is tough to figure out, so you need to have an emergency plan figured out for a quick evacuation. Be prepared for the unexpected and have a professional expert handy in case you need to get rid of your investment quickly.
4. Don’t Be Impatient
Unlike other ventures, investment property is a long-term project that you’ll probably make money on once you resell. Plan ahead for renovations and general upkeep and expect these projects to set you back financially at the beginning. It may even be a struggle to meet your mortgage payments on the property at times. Depending on a quick sale will only set you up for financial disaster.
5. Getting Emotionally Attached to the Aesthetics of the Property
This is a major area where investors struggle. They could get emotionally attached to a specific feature or room of the house and fall in love with the investment. It’s definitely a plus to like the home that you are purchasing, but you have to remember that you aren’t going to be living in it. Clear your mind and see the property for its imperfections and the costs that you will have to incur to fix it up. You may love it for its quirkiness and charm, but you need to make sure that you can still rent it out.
Andrew Potter is the resident property blogger for www.myonlineestateagent.com. My Online Estate Agent partners with the leading property websites, providing an unbeatable service for landlords and sellers.