Should You Rent or Buy a House at the Start of Your Career?

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Looking for a solution to the question of whether you should rent or purchase a property at the start of your career? It’s a major decision, especially for young professionals just starting out in their professions and developing their long-term financial strategy. Or, if you’ve graduated from college or will be soon, one of the most crucial questions you’ll need to answer is, “Where will I live?”

Everyone’s dream is to own a home. Many people invest a lifetime to buy their first home, while others do it early in their careers. Most young professionals do not consider purchasing a property. However, if people begin taking small steps toward purchasing a home early in their careers, they may own property relatively quickly.

Overall, renting and purchasing offer advantages and disadvantages for young professionals.

Pros and Cons of Renting vs. Buying

Clearly, there are a number of important considerations that require the advice of a real estate attorney while determining whether to rent or buy a house. Here are the primary items to consider if you’re having trouble assessing the exact idea.

Pros of Buying a Property

  • The value of your home/property may increase by time
  • Your payments contribute to equity
  • There are certain tax advantages to buying
  • It is a more permanent annual planning
  • You may modify your living area whatever you like

Cons of Buying a Home

  • If your financial situation changes, you may lose your home
  • There are additional costs of ownership, such as home insurance, maintenance, property taxes, and so on; and
  • Economic fluctuations may cause your home to lose value
  • You are responsible for all maintenance
  • You are locked in one spot for an extended period of time unless you are willing to risk losing money.

Pros of Renting

  • Fixed and predictable monthly housing costs
  • You can move whenever you want
  • You don’t have to spend money on the expenditures connected with owning
  • You don’t have to save up hundreds of dollars for a second mortgage or interest charges
  • Savings may use for some other purposes like paying off debt or investing

Cons of Renting

  • Your rent money is not utilized to purchase the property.
  • You have limited influence over how the property operates
  • Rent may increase in the future
  • The landlord may sell the property or decide to cease renting to you

 So, should you rent or buy?

When it involves purchasing vs. renting, there isn’t a clear winner. The decision is highly personal and is influenced by a variety of circumstances.

Finally, you must consider your goals—not only for where you reside but for your complete financial picture. Homeownership may provide a fantastic sense of security and stability, but it requires a significant financial investment that may not be the best option for you in the long term.

Renting may appear to be “throwing money away,” but if you value versatility, low-maintenance living, and the freedom to invest your money on other things such as investment or vacation, it may be the best option for you. Again, it is your responsibility to crunch the figures and assess your preferred lifestyle.

 

Thanks to John Adams for this guest post!

How to Negotiate a Pay Increase in a New Job Offer or in Your Current Job

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Hey, who can’t use a little more cash and never has the job market been tipped more in favor of the worker.  Time to make sure you get your share of the good times.  Here are five tips to negotiate a pay increase.

  1. Think creatively. There are lots of compensation other than salary.  What about the bonus schedule, PTO (paid time off), employer reimbursements (phones, mileage, home office) and tuition reimbursements are just a few.
  2. Think timing. Don’t bring up compensation early in the interview process.  Set the hook first.  Let them get to the point where they want you, then start negotiating pay.  If you’re at an existing job, wait until you’ve just done something great for the company to ask for more money.  But even then, temper your enthusiasm with the reality that if the company is losing money or having a difficult time, the timing is not right to ask for an increase.
  3. Think turn around. What if an employer asks you how much you’re making now?  Turn this question around by stating that, “you’d like to postpone the conversation until you understand more about the position because there are many components to compensation. But let’s not waste each other’s time – what is the range of pay that you’ve budgeted for this position?”
  4. Think game plan. If you present your case to your present employer and get vague promises or a tepid response, try breaking the increase into two parts with the second adjustment predicated on meeting objective performance metrics.  Follow up any such agreements with an email just to make sure that you understood your employer correctly and to insure against future foggy memories.
  5. Think negotiation. Just because you got an offer to go elsewhere doesn’t mean you should just immediately jump ship.  What about going to your current employer and expressing how much you love the company and love your job but you just got this offer that you can’t ignore?  Inquire about your future with the company and what promotions or pay increases might be looming in the near future.  Give your current employer a chance to beat the offer if you really do like your current job.

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Juggling Job Offers

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We’ve been talking about how to Amp Up Your Side Hustle and how to Set Up a Home Office.   But now with the pandemic receding, maybe it’s time to strategize about conventional work.  What if you’re in the enviable position of having multiple job offers?  Here’s some ideas about how to sort thru that.

  1. Think Research. Know all you can about the companies making the offers.  Understand the entire compensation package.  Remember the interview when the employers were asking all the questions?  Now it’s time for you to ask a few of your own.  Even how your questions are treated gives you a clue about the future.  Are your questions welcomed and answered promptly or does your future employer seem annoyed?
  2. Think Pros and Cons. Consider getting out a piece of paper and writing out the advantages and disadvantages of each offer.  Sometimes seeing everything organized in one place lends clarity.
  3. Think Ask. Maybe none of the opportunities are ideal.  Maybe if one of the opportunities was tweaked in some way, that would make the difference for you.  You don’t get if you don’t ask.
  4. Think Before You Leap. Sometimes you commit to one job and then the dream job offer comes in after you’ve committed to something else.  Do you graciously exit the commitment you just made to move on to the dream job?  Some experts are saying you should.  I can’t make that kind of decision for you.  Obviously, you risk burning a bridge and going back on your work is never a good thing.  Maybe it’s time to get that sheet of paper out again to weigh the pros and cons.

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Setting Up a Home Office

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With the Pandemic, more people are working from home than ever.  And between you Amping Up Your Side Hustle (see blog post from February 2, 2022) and quitting your job (see blog post from February 22, 2022), you’re going to need your own home office. Here’s a few tips to make setting that up easier.

  1. Consider a fold down desk. The example below folds up entirely out of the way when done.  And when open, there’s all kinds of storage cubbies.  There’s plenty of clever alternatives available like this for not much money.
  2. Repurpose the guest room. You’re probably not going to have many guests during Covid anyway.  Time to make better use of the space.
  3. Consider trading up to a larger apartment. Maybe your studio or one bedroom is too small to  accommodate even the folding desk idea.  What about a two bedroom where the second bedroom serves as an office?
  4. Get a good chair. You might be in that chair eight hours per day.  Make sure you’re comfortable.
  5. Take advantage of the view. Does your apartment have a great view?  That’s where your office goes.  No doubt, you’re paying good money for that view.  Now is the time to make the most of it.

Organize the cords.  Remember, you still live here the rest of the day too and you don’t need you or your other housemates to be tripping over unsightly cords.  There are plenty of cord organizing devices to consider from the simple twist tie to entire kits.

 

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A Check List for Before You Quit Your Job

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We just talked about Amping Up Your Side Hustle in the last post from February 2, 2022.  If your side hustle has escalated to the point where you think you could go full time, or if you just want to swap gigs for something new because there’s so much work out there, you’ll want to reference this checklist before you quit your job so you don’t burn a bridge or leave cash on the table.

  1. Think Health Care FSA. Flexible spending accounts don’t move with you from job to job.  Use the funds before you quit or the money is gone.
  1. Think Checkups. Your new job may have a probationary period before health insurance kicks in.  Get routine checks out of the way and fill those prescriptions before you make the move.
  1. Think Vacation Time. Different employers have different rules about how residual vacation time is treated when an employee leaves.  Make sure you know the rules and don’t lose your benefit.
  1. Think Health Insurance. We just said there could be a gap between when your old insurance ends and the new insurance kicks in.  Fortunately, there are lots of remedies.  COBRA continuation coverage allows you to continue in your old insurance plan so long as you pay the entire premium, including the former employer portion.  Or you can apply on the Affordable Care Act website.
  1. Research you 401K. Know the rules on how you roll over your 401K and what fees and tax implications may be involved.
  1. Think Future. It goes without saying that you make your exit on good terms.  You never know when the leap doesn’t work out and you need to go back.02 22 2022 Quit Your Job 300x199 - A Check List for Before You Quit Your Job

Amp Up Your Side Hustle

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Nothing like a little Covid disruption to get you started thinking about a new gig, or perhaps just making more of a go of it on something that used to be a hobby.  Now more than ever it’s easy to get a side hustle going.  Here are a few pointers to get you started.

  1. Think Business Structure. This doesn’t have to be complicated.  Most people start as sole proprietors or if another person is involved, then it’s a partnership.  B
  2. ut either entity could be rolled into a Limited Liability Company or LLC.  This is just like it sounds – an entity that automatically limits your liability under the law.  Why wouldn’t you want this?  Who knows what could go wrong.  Yes, you’ll want to keep appropriate insurance in addition to forming your LLC.  But forming an LLC demonstrates that you’re serious and you know something about what you’re doing.  You can form an LLC online for a few bucks at wdfi.org.
  4. Think Financial Separation. Hopefully your new business is going to generate lots of revenue.  For sure it’s going to generate expense and those expenses may be tax deductible.  Your tax reporting will be a lot easier if you have separate accounts for your business.  So get a business checking account and perhaps a business credit card as well.
  5. Think Bookkeeping. Not exciting, I know.  But having accurate records is crucial to any business.  How do you know if you’re making any money or not?  Besides engaging in the financial separation described above, you’ll want to take record keeping to the next level by using an accounting software package.  There’s lots of good, inexpensive software out there and they’re not hard to learn.  Pick one and keep good records.
  6. Think Network. Somebody else has already cracked the nut on how to be super successful doing just what you’re doing or something very similar.  Forget what you were taught in school and copy them!  The marketplace isn’t going to reward you for figuring out on your own stuff that is already commonly know in your industry.  So make friends and pick their brains.
  7. Think Sales. Every business is going to need someone to hustle the product or service and that someone is you.  Learn how to sell and you’ll never be hungry or broke.  There are plenty of books on this topic for free at the library.

Now get going!

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