If You Move Into A New Or Refurbished House, You: Fill & Download for Free

10 secrets of how I do this…I may change air filters & a lightbulb. Anything more complicated than that, I'm in trouble and it's just too much for me. I don't even own a tool box, so I'm completely an incompetent handyman.I have a different business model to adjust to my weakness… yet my limited ‘handyman’ abilities have never stopped me from investing in rental properties.Here's how I do it:Pick the right property. If you buy a junky old house, you better do a complete rehab before you get a tenant. If you try to be a smartass, you will have a nightmare… plus lose your tenants.This is my biggest secret: I buy old foreclosed properties, rehab and rent. Cash flows are higher than buying a house ready to move in. I keep the increase in value of my now rehabbed house for future capital gains and pay a reduced tax rate. I can be more competitive and have more ROI than everyone else. Plus my freshly rehabbed house will be the best in the area. I'm in control of who I pick from an above average demand of people who want to live in a ‘new’ home! I can be very selective and even get higher dollar for my monthly rent and I paid less for the property.Sears Outlet store appliances with extended warranty. You can find ridiculously cheap appliances. Sell the old ones, buy new or refurbished and get free maintenance with the prepaid extended service for ANY issues . Worth it! Plus you usually can get 12–24 months interest-free financing. Give your tenants the phone. Don't call me!!Depends on the house you rent, but be in charge of the pool, pest control and yard service if the house needs it… Obviously the amount is charged to the lease, because you never expect or believe your tenants will take care of your home. But you will! Stay ahead of them and charge them. Believe me… everyone will be happy!Stay away from low income investment homes. My sweet spot is around $1,300/month. I get responsible tenants.Ask for 2 months deposit if possible. You're in control. If you have the best house, you can wait for the right tenant.This is another huge advantage I have: I found a maintenance worker of a large apartment complex. He has a full time job there… but he's always my first-call person. He can handle after hours in 90% of the situations that may happen. I pay him well, yet it's much cheaper than calling the experts. He's super happy with extra income.Get professional advice and have a strong contract. Set the rules straight from day one.Provide easy payment options. Credit card or auto bill if possible. I even provide them with 12 pre-filled deposit slips of my bank to make it as easy as possible for them.Get a virtual assistant to handle stupid stuff and or logistics. I don't provide my tenants with my personal phone number. Never! Filter the calls. You call back if needed. Be in control!

In the early 1960s, we moved from the USA to the UK. I was 9. We settled into one of the most fashionable areas of Chelsea,London, just a block away from Cheyne Row.Life was incredible. London in the 60s was like living in the film “Yellow Submarine”. Everything was hyper trendy and exciting.My father's U.S. salary made us quite well-to-do by Brit standards, so we had rented a beautiful five story townhouse.Once we moved in, I started having a recurring eerie dream. I was on a staircase in the home and looking at the very still form of an infant lying wrapped in what appeared to be very heavy cloth, unattended on a landing. The material was odd and lumpy - I couldn't really understand what it was -and the child was too still to be alive. Still, it was a calm dream and curiously unfrightening.A couple of months later, my parents decided to install a clothes washer and dryer in the house. England was a very basic country and few people had such commodities in those days.There was no obvious place to put the appliances. However, the house did have an old chute in the front dating from the days when coal was actually delivered straight to people's home by horse cart or lorry. The access doors had long been firmly sealed, but a contractor reasoned there would be an abandoned coal storage area in the basement that had probably been simply sealed up. If so , it would be a great place for the clothes-washing area.After tapping on walls and puttering around with a tape measure, the guy grew increasingly mystified and said there must be quite a large underground space back there. My parents were delighted they had stumbled across some essentially free real estate.So, a couple of days later, my sisters and I were watching idly from the stairs as the workman started to pry away a large piece of wooden wall. Sure enough, a black void appeared.What happened next still chills me to the bone every time I recall it. The contractor poked a weak flashlight beam through the hole, and stifled an anguished cry. He whirled around, his eyes bright with alarm as he tried to compose himself. I heard him hiss under his breath to my parents,”Best get the children upstairs now!” My father, still not knowing what was happening, wasted no time in sending us away.Long story short, the workman had broken into a triage room for victims of German bombs from the Blitz of World War II. While there were no human remains, the floor was covered wall-to-wall with rotted mattresses black with streaks and puddles of dried blood, and abandoned oxygen canisters and emergency medical equipment. It looked like a small station set up to accommodate six to ten patients in very tight quarters.It must simply have been abandoned sometime during the hectic , hellish nights of the height of the Blitz, boarded up and then forgotten over time.It was definitely quite nasty. My parents gave us a talk about it and I clearly remember workmen dragging the blood-stained mattresses up the stairs and the old,odd creepy looking carts and lights being carried away.The basement was refurbished nicely, the appliances were installed and me and my sisters largely overcame our fear of that part of the house (although personally I wouldn't go down there unless my parents were in the house).A couple of postscripts. Just a few yards away, there was the sealed-off entrance to a large bomb shelter. It was impenetrable without heavy equipment, but a local British boy I befriended told me he had tried to break in once. He said an elderly gentleman had stopped him and in a very kind voice had told him not to ever go in there because “there were things in there”. Scared the lad badly and he took his elder's advice.I then realized the still baby I had repeatedly seen in my dreams had been wrapped in layers upon layers of thick gauze bandages - presumably pressure dressings for trauma. In time, the dreams went away.Again, this was 1963 and just a few years after WWII. Large, bombed-out blocks of buildings were still everywhere, the rubble cleared but gaping, vacant lots remaining. I remember meeting old and middle-aged men and women with visible scar tissue from injuries received from either the foreign or domestic war fronts.

Loans. And the huge Interest you pay for them.Every rupee you earn is equivalent to some hours of work you have done. So whenever you spend, you are exchanging a part of you life for a good or service. People don't realize just how much of their lives they are spending serving banks and credit card companies.House Loan. This is rampant. Most people I know have already taken or plan to take a 20 year loan with EMIs that is half their salary but in which the interest component is more than 85% for the first few years, to purchase something that is not liquid, not diversified, not tax efficient, liable to fraud from builders and land mafia and can't be bought in small pieces.This is one of the biggest expenses most people make in their lifetime. Unfortunately, a lot of them do this wrong.​​Beware of the bad arguments you hear:It's a good investment. Sometimes it is. But most people are unable to separate the emotional and financial aspects.Have you done the math? Have you accounted for interest, registration, capital gains tax, parking and interiors cost, time to complete, and opportunity cost? What about the real estate bubble, which is now losing air? Are you buying cheap in an area that is soon to be developed or are you buying expensive in an already developed and appreciated area. Will you be staying in it or are you renting out. Have you accounted for the tax you have to pay if you rent out? Here are some more mistakes people make while comparing Real Estate to Equity:Why Equity Funds Don't Beat Real Estate. You have Builders that construct houses and Banks that provide loans. Why? Because it's lucrative. If buying a house and selling it is so lucrative, why aren't there companies that buy from the builder, rent it out and then sell it after a decade or two? Think about it.The money I pay for rent is wasted. No it's not. It gives you a roof to live under. Also it frees up cash flow for you to invest (EMI-Rent) without having to take a loan. Properly invested, it can give you better returns, that too tax-free and with better liquidity.But we need our "own" house. What's the difference between an "own" house and a "rented" one? It doesn't feel like mine? Seriously? That's your reason? But I want to refurbish it the way I want. Do you realize just how expensive this wish of yours turns out to be? Rents will increase every year? Of course it will, doesn't inflation raise the price of grocery? Don't you get raises every year? Just agree on the yearly % increase before you move in so that you don't have to renegotiate every year. I'll have to shift frequently? Find a house whose owner doesn't have any short term plans of moving back in. Worse case, packers and movers make shifting very easy.Here are more bad arguments: Get rich without real estate Most people will need to take a house loan to buy a house, but you should repay it within 5 years so that you don't waste too much money on interest. If you can't do that, either save for a few more years or buy a house at a cheaper location.Car Loan. Nobody cares what car you have. Not even you !Here's what hurts your finances in increasing order of severity:​​Buying a sedan when a hatchback fits your needs. A car's purpose is to get more than 2 people from A to B. You might feel excited and accomplished when you first buy it. But after a couple of months, you'll view it as a means of getting from A to B. Also a car's value decreases with time. So you want to spend as little as possible on it. The high of buying a better car is temporary. The damage you've done to your finances is permanent.Buying a hatchback and then after a few years, buying a sedan. Cars are meant to be driven for at least 10-15 years. That's when you extract value out of it. If you change cars in 5 years, you've taken the depreciation hit, but not used it long enough to recover it.Buying a car before you need it (only two people at home and short commute). Cars are high maintenance. Fuel, Servicing, Insurance, Cleaning, Parking all eat into your cash flow.Buying a new car. The moment you drive a new car out of the showroom, it's value decreases by 15%. And most of the depreciation happens in the first 2 years. And guess what, after 2 years, the car looks almost the same. And drives a little better because of all the servicings it has had. So why not let someone else take the hit? Buy second hand. Just make sure you get it inspected by a trusted mechanic first.Taking a Car Loan. You want to buy a depreciating, money sucking asset, that too with someone else's money? Are you out of your mind?​​Educational Loans. Debt is a magnifier- both ways. If you use it right, you can multiply your net worth. If you don't you can wipe out a lot of it. But before you take an educational loan, do the math on how much you're investing and what you'd get out of it in the long run. Compare that with the scenario of not getting that education. Of course if you're very poor and need a loan to go to college then educational loans will be a boon to you.​​Investing in yourself is great. Just don't do it via overpriced MBA courses from not so good colleges.Credit Cards. You do not need to buy new clothes every month. You do not need a new phone every year. You do not have to eat out every weekend.Credit cards are a dangerous product designed to encourage you to spend beyond your means thereby profiting the credit card company. They distort your ability to manage your money. They don't show you how much money you have left, they show you how much more money you can borrow.​​That's why I don't use credit cards. I use debit cards. They give me a better view of how much money I have left.Please don't waste your money. Invest it to make it work for you.This engaging video talks about keeping up appearances and investing.Edit:I'm not against buying cars or homes. You should definitely spend your money on things that give you the most happiness.I'm not against loans per se either. Leverage can be an enabler.I'm against taking loans without fully understanding just how big an effect they can have on your finances.