Emergency Ready Kit

December 29, 2015

The Federal Emergency Management Agency (FEMA) recommends that all Americans have some basic supplies on hand in order to survive for at least three days if an emergency occurs. It is recommended that the Ready Kit should be assembled well in advance of an emergency.

The concept is to be able to survive for at least 72 hours until local officials and relief workers arrive on the scene. The disaster could be wide-spread and involve a lot of people that makes it difficult for relief workers to reach everyone immediately.

  • Water, one gallon per person per day for at least three daysFema ready logo2.jpg
  • Food, at least a three-day supply of non-perishable food
  • Battery powered or hand-crank radio and a NOAA weather radio with tone alert and extra batteries for both
  • Flashlight and extra batteries
  • First aid kit
  • Medications (prescription and basic)
  • Whistle to signal for help
  • Dust mask to help filter contaminated air and plastic sheeting and duct tape to shelter in place
  • Moist towelettes, garbage bags and plastic ties for personal sanitation
  • Wrench or pliers to turn off utilities
  • Manual can opener for food
  • Local maps
  • Cell phone with chargers, inverter or solar charger
  • Family and emergency contact information
  • Extra cash
  • Emergency blanket
  • Pet supplies if necessary

Click here for a print version of this list and additional items to consider adding to an emergency ready kit. The American Red Cross has a suggested list for first aid kits and has other items available for purchase at their online store.

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Forced Savings

December 22, 2015

One of the big banks has a voluntary program available that transfers $100 each month from your checking account to your savings account. In five years, the account owner would have over $5,000 because of a type of forced savings. iStock_000059416596-250.jpg

Similarly, when a person buys a home with a standard amortizing loan, each month, a part of the payment is used to reduce the principal loan amount. Amazingly, over $4,000 would be applied toward the principal in the first year of a $250,000 mortgage at 4% for 30 years. In five years, the loan amount would be reduced by almost $25,000 through normal payments.

The other dynamic that is in play is that while the unpaid balance is being reduced, appreciation causes the value to increase. The difference between the two makes the equity grow even faster. Three percent appreciation on a $250,000 home would increase its value in five year by almost $40,000.

A 30-year mortgage of $250,000 will be paid for in 30 years. At an average of 3% appreciation, the asset would be worth about $600,000. If you continue to rent, the asset belongs to your landlord instead.

Many experts believe that the homeowner benefits from the forced savings of amortization and the leveraged growth that takes place in the investment. It has been observed in the tri-annual Consumer Finance Survey by the Federal Reserve Board that homeowner’s net worth is considerably higher than that of renters.

More Equity…More Options

December 15, 2015

The more equity in your home, the more options you have. Since equity is determined by the difference between value and what is owed on a property, when homes lost value during the Great Recession, homeowners’ equity decreased. Equity-250.jpg

Negative equity occurs when the value is less than the mortgage owed. According to CoreLogic, 91% of all mortgaged properties have equity and only 4.4 million properties remain in negative equity at the end of the second quarter in 2015.

A homeowner, who qualifies, can release part of their equity by refinancing the existing loan and taking out additional cash or by getting a home equity loan. The benefits include:

  • To get a lower rate on your current mortgage
  • To finance capital improvements on your home
  • To payoff higher interest rate debt such as credit cards or student loans
  • To purchase items that would not have deductible interest like personal cars, boats, etc.

It could be as simple as waiting for positive home equity so owners can move to another home without having to pay out-of-pocket expenses to sell their home.

The first thing every homeowner needs to know about plumbing is how to turn the water off in case of an emergency. It’s like having a fire extinguisher; you hope you never need it but you want it just in case you do.Plumbing-250.jpg

Generally, the cutoff is in the front of the home. There may be a separate cutoff box on the owner’s side of the meter. If not, the owner needs to be able to open the water meter and turn it off there. This will require a water meter key which can be found at a local home improvement store and a wrench. Once you have the key, practice opening the meter door and check out how the shutoff valve works. Then, put the key in a quick and easy place to find when you need it.

The second thing a homeowner needs is a recommendation of two good plumbers. Having a backup name is always good in case your first choice can’t make it when you need them.

Some homeowners prefer to go the do-it-yourself route. There are plenty of DIY videos on the Internet but having the name of a good plumber if the job gets out of hand can be the tool that saves the day.

Our business puts us in touch with some of the most reliable and reputable service providers and we’re willing to share their names with you. Regardless of whether you “do it or delegate it”, being familiar with the basics can be very helpful.

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Dear Family & Friends,

Wow! What a year of change. After spending Thanksgiving through New Year’s last year in the hospital with Bert (my mother in law) with her heart surgery and complicated aftermath, she finally came home with us in early January. By February we began Hospice care for her. She’s still here as I write this, but is currently attempting to recover from pneumonia. She’s had several setbacks this year and continues to amaze us with her resilience. We have full time sitters with her during the week and Boyd and I care for her at night and weekends. Hillary, our daughter, has been so good to help us out and give us breaks during the year. Bert was able to spend Thanksgiving week with her daughter and family which was a highlight recently. Bert was a traveler and “doer” before she was sick so this year has been quite a struggle emotionally for her. As hard as we try to take her out for small outings she still longs for her independence and old life.

Eric and Casey decided to move to Wyoming during the summer and we assisted them in September by traveling cross country to help them relocate. I flew out for Maggie’s 3rd birthday in October and Boyd and I again drove out for Thanksgiving week to finish taking a few of their things. We had almost 12” of snow while we were there. They live in Lander with a population of around 8,000 and although I love their new hometown, it’s not the easiest to get to even if you fly. Wyoming only has about 500,000 people in the whole state so everything is spread out and can be extremely remote in places. They seem to love their new home and the children have acclimated very well. We miss them terribly but look forward to many trips out there in the coming years. We do look forward to them coming home for Christmas this year.

Hillary is still in Montgomery and I’m not sure how we could do without her. She amazes me with her willingness to always help us out particularly with Bert when we need her. She did change jobs this year and continues to do more web design while her desire is to do what she was trained to do in college, graphic design. She is doing some freelance work with that and also continues her photography jobs on the side. She is very talented!

House & Home Real Estate was born in 2014 and we have grown! We are now 20 agents strong and consistently rank 5th in production in the Montgomery market. We have carefully selected the right agents and grown more than we ever expected this quickly. Our blessings have been bountiful and my partners are amazing. God put us together I’m sure and I look forward to the future. I traveled a lot with the Montgomery Area Association of REALTORS® to Washington DC, Pensacola, FL, Fairhope, AL and San Diego, CA for conferences. I was just installed as the President Elect for our association this week and look forward to getting our new MLS system up and running in 2016. Something our association was desperately in need of upgrading.

Boyd has had a busy year with his work taking him to Tuscaloosa, Troy, and Elmore County and locally finishing up the new VA clinic here in Montgomery. He did get to go to Tulsa twice for his beloved gun shows as well as many others in the southeast with his friend Terry. One of his biggest accomplishments this year was building our new oasis in our backyard with our new hot tub. Just this week we were able to get the last part done. We added a door from our bedroom directly into the cabana. We have really enjoyed the relaxation it has provided since we have to stay so close to home with Bert. It has also provided quite the relief for my neck issues which continue to plague me.

Outside of our very restricted life right now, we have had a good year. We are thankful for caring friends and family that have encouraged and been available to assist us this year. We look forward to the New Year and all it has to bring. We pray you will all be blessed with prosperity, love and health this coming year!

Boyd & Carol

Boyd & Carol Andrews
8332 Brittany Place
Montgomery, AL 36117
Carol’s cell 334-322-4493
Boyd’s cell 334-301-4867
CarolBoydAndrews@outlook.com
BAscrambler@hotmail.com

Look at a Rental This Way

December 1, 2015

Appreciation, tax advantages, cash flow, leverage and equity build-up contribute to the rate of return on rental real estate. If that sounds confusing and it’s keeping you from investing in rentals, try looking at it a different way.Paperwork-250.jpg

Consider this, look at only cash flow and equity build-up to determine whether to buy the property. They are easy to calculate and their outcomes are both reliable and predictable.

Most homeowners, based on their familiarity with their own home, should feel more comfortable with a rental than alternative investments. A conservative strategy is to purchase slightly below average price range homes in a predominantly owner-occupied neighborhood. Collect the rent, pay the bills and make necessary repairs.

A cash on cash rate of return is determined by dividing the cash flow before taxes by the cash invested in the property. It considers all of the “real world” income and expenses related to the property.

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The equity build-up occurs from the normal process of amortization with an increasingly larger portion of each payment applied to reduce the principal loan amount.

In this hypothetical example, the combination of the Cash on Cash and the Equity Build-up is almost 12% which is considerably higher than certificates of deposit and bonds and nowhere near as volatile as stocks or mutual funds.

In most of today’s markets, rents are expected to continue to rise and due to a low inventory of homes for sale coupled with growing demand, prices will continue to rise. Even though there is value in appreciation, tax advantages and leverage, they could be considered an unexpected bonus to this basic rate of return.

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