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How Does Rent-to-Own Work When Buying a House?

At Sep 16, 2016

When the market is saturated with homes for sale, rent-to-own becomes a popular option. It solves several problems for both the buyer and the seller. Rent-to-own is a contract to buy, but the closing date has been extended a year or two into the future. The renter has plenty of time to line up financing, and the seller gets his mortgage payments covered with rent in the interim.

Lease Purchase vs. Lease Option

Many people confuse lease purchase–aka rent-to-own–with lease option. There is a big difference. Lease option gives the renter the option to buy the home. The renter is not agreeing to buy it, but if a contract is offered, he may have first right of refusal. In other words, he should produce financing and close on a loan, or make plans to move out. A lease purchase is a contract to buy with an extended closing date. The time is used to save a down payment or to line up acceptable financing.

Buyer Advantages

The buyer in a rent-to-own situation can freeze the price on the home a year or two in advance of when he must close on the mortgage loan. In the contract, he can list payments that will be contributed toward a down payment or toward the sale price. He can move in and try out the neighborhood–and the school system–prior to buying. The extended closing date gives the buyer plenty of time to clear up credit issues or to save down payment money. In the event he does not get financing, however, any deposits he makes up front may be lost.

Seller Advantages

The seller has the advantage of having a renter who is responsible enough to want to buy the home; therefore, he will take good care of it. The rents the seller receives cover all or part of his monthly mortgage payment. The seller also can require a nonrefundable deposit to bind the contract. If, at the end of the rental period as spelled out in the contract, he is not able to close the sale, it can be renegotiated or terminated.

Suggestions

When considering a lease purchase contract, take a look at your credit report to clear up any issues or to raise your credit score. Review the report for errors, duplications and outdated information. Dispute these items by contacting the customer service number on the report. Also, visit a mortgage lender and get pre-qualified for a loan. Even if you have no credit issues to clear up, debt ratios play a big part in mortgage approval. This meeting will show the amount of debt you can handle each month and still be approved for a mortgage. Down payments and loan types will be discussed, making you a well-informed future borrower.

Warnings

Before paying any deposits, do homework to be sure the asking price is reasonable. Ask a real estate agent to do a “sold search” on the MLS to find what similar homes in the neighborhood are selling for. Have a real estate attorney do a title search for you to be sure the seller can pass clear title to you when you close on a mortgage loan. The attorney can also assist you with the contract. Make all payments to the seller in the form of checks. You must have absolute proof of timely rental payments to the seller, as well as proof of any deposits you made so that you can get credit for them from your mortgage lender. Hire an inspector to look over the home; he can ascertain any major construction issues. Major repairs should be negotiated with the seller before you sign a binding contract or pay a large deposit.

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Choosing the Right Furniture

At Sep 16, 2016

Like the move process, the task of properly furnishing your home can be an anxiety-inducing experience, especially since a furniture purchase can seem so very final. But if you follow some smart shopping basics, you’ll reduce your stress and make the right decisions without panicking.

Check out some of our tips below as you approach the process of furnishing your home.

  1. Decide what you like

    Make a list of the colors, textures and patterns that you prefer. Mixing and matching is an acceptable practice, as long as it’s within reason. But if you don’t trust yourself, try to assign your décor to one of the major categories:

    • Casual (comfy-looking, earthy, woods)
    • Contemporary (sharp, angular, metallic)
    • Country (soft, floral, painted woods)
    • Traditional (antiques, dark red woods, damask and chintz)
    • Eclectic (ethnic or artisan pieces, highly individualized)

    Generally, it works best to decide on one main theme for a room, but use contrast to accent your look. And if you’re interested in doing some home décor research, check out TV shows, magazines, books, catalogs, Web sites and furniture chat rooms for ideas. A lot of expert’s will tell you to make a scrapbook of styles that you like to narrow down the options. But most importantly, remember that you’re the one who has to enjoy your surroundings – not the decorator, not your best friend and not your mother.

  2. Evaluate your existing décor

    Take measurements in the room that you’re planning to furnish. Take a cold, hard look at the furniture you already own. How will it all work together? Will your old furniture look as nice next to something brand new? And if you have furniture at home that needs repair work or a facelift, check out our home services center to find a pre-screened furniture repairman in your area.

    If you’ll be mixing old and new furniture, add samples of your existing colors, textures and styles to your scrapbook so you can evaluate a good match when you are shopping. If you are painting, dip a popsicle stick in the paint, let it dry and add it to your scrapbook so you can be sure your furniture will complement the room. You don’t want to rely merely on your own judgment when confronted with 20 shades of blue.

  3. Be honest about your lifestyle

    If you have two toddlers, a 200-pound mastiff and three cats, then you may want to reconsider white silk as the choice fabric for your new curtains. An expensive leather sectional could also be seen as overkill if you rarely entertain guests or have a small living room.

  4. Decide what’s most important

    There’s no rule that you have to buy everything at once. Start with items that need replacing first, and build the room (slowly if necessary) around pieces you love.

  5. Set a price limit ahead of time

    Look for the best values in your price range. Be patient and shop around.

  6. Take advantage of free services where you can

    Many stores have free interior design consulting, product brochures and room- planning guides. Learn to be an expert on the look you’re going for.

  7. Don’t let anyone rush you

    Trust your own judgment. Don’t buy furniture you don’t like, no matter what others recommend. Remember, it’s your home.

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10 Of The Cheapest Kenyan Towns To Live In

At Sep 16, 2016

Nairobi, Kenya’s beautiful capital, has gained a reputation as one of the most expensive cities in Africa. Last year, a survey placed Nairobi as the most expensive city in Africa. However, just because Nairobi is a full of luxury does not mean that the cost of living in Kenya is high. Many towns in this country have very affordable, from cheap housing to low cost of living standards. Most of these are country side towns that are home to a majority of the Kenyan population.

Large population of these towns depend on farming, fishing and in some cases, tourism for their local economy to grow. These are the most laid back, beautiful places in magical Kenya. With that in mind, we have compiled a simple list featuring 10 of the cheapest Kenyan towns to live in, for locals and visitors alike, in no particular order.

1. Nakuru

Nakuru_Town

Photo Source: Nailbuzz.com

Although Nakuru has somewhat become a ‘go-to’ destination for ‘Nairobians’ looking to have a great weekend away from the big city, this Rift Valley town has managed to keep the cost of living tamed. Statistics show that food or eating out in Nakuru is 43% cheaper than in Nairobi. Other factors such as housing, transportation, education and electricity are very affordable. If you want to have a good life; a life that mimics life in the big city, then Nakuru should be one of the towns at the top of your list. Not only is the cost of living in Nakuru much cheaper, but the town is an entertainment hub for both locals and foreign tourists alike.

2. Kitale

Kitale

Photo Source: Heartodarkness Blog

Kitale is a major town in Western Kenya. It is a huge agricultural center that produces quite a bit of maize, dairy products and a host of other produce. Being that Kitale is not as big a town as many others in Kenya, the population here is mostly farm owners and locals who are native to this region. This means that housing, food and even transport within this area is very affordable. Mostly due to low demand. There is plenty of food and fresh produce, which has kind of tamed the price of groceries in Kitale and its immediate environs.

3. Kabarnet

Kabarnet

Photo Source: Ordinarydaisy Blog

Kabarnet, which is in Baringo County in the former Rift Valley province, is one of the most interesting destinations in Kenya. For starters, it has Lake Baringo nearby, which is a huge Flamingo hub. It also has countless other attractions including beautiful resorts, guest houses and a museum. Life in Kabarnet is a lot cheaper than life in most of Kenya. From accommodation, to restaurants, transport and entertainment. The food here is good and so are the people.

4. Kakamega

kakamega

Photo Source: Joeandkathyinafrica Blog

Yet another agricultural hub in Western Kenya, Kakamega is a town that enjoys great weather, a good atmosphere and some hidden tourist attractions that bring foreign life to this quaint, little town. Since many residents produce their own food here, grocery prices in Kakamega are a little lower than they are in most towns. Housing is also very affordable and so is transportation.

5. Eldoret

eldoret-01

Photo Source: Ds-Land.com

Eldoret is one of the biggest towns in Kenya. In fact, Eldoret might just be the next town to get promoted to being a city. It has an international airport nearby, tracks and tracks of farmland, good infrastructure and a pseudo-stable economy. Life in Eldoret is a lot like life in any of the other big Kenyan towns; semi-fast, always moving forward and headed towards ultimate modernization. The nightlife is something that most residents in Eldoret really enjoy. The cost of living here is a bit higher than most towns but it is still very affordable. With all that farmland, food in Eldoret is very cheap. Housing is generally cheap, but this depends on which part of town you want to live. There are some high-rise areas where the prices are almost as high as they are in Nairobi.

6. Nanyuki

nanyuki

Nanyuki is synonymous with soldiers, coffee houses and quite a bit of dust. The town enjoys quite a bit of rain and an outstanding view of Mt. Kenya. Thanks to the predominantly cold weather, there is almost never any food shortage in this area. This means that the cost of food is very friendly. Housing is also rather cheap and entertainment is affordable depending on where you go. It attracts tourists looking to scale Mt. Kenya, which means there are some facilities that charge a lot more than the regions average. All in all, the cost of living here isn’t too high. It is a comfortable standard.

7. Sagana

Sagana

Just like Nanyuki, Sagana has quite a number of facilities that cater for the local and international tourists that this region gets. It is also a predominantly farming region, which means it has a lot of food. The cost of living here is not as high as the nearby Thika town or even Nairobi. Food is very affordable here; housing is cheap and transport is tamed. Sagana is the place to be if you do not mind that quite, country feel.

8. Kisumu City

Kisumu

Photo Source: Boulderkisumu.org

Being one of the big Cities in the country, you would expect life to be expensive in Kisumu. You would be right…in part. The night life in Kisumu very closely mimics that in Nairobi. So does the transport, the housing and general facilities. This doesn’t mean that Kisumu is like Nairobi, it just means it is yet another fast paced city. Surprisingly enough housing in Kisumu is very cheap compared to other towns. Food is not as cheap, but that deficit is recouped via transport and cost of entertainment. Most amenities such as water and electricity are very affordable as well and the weather is just perfect (if you like it hot!)

9. Mombasa City

Mombasa-Tusks

Yes, Mombasa can be very expensive, depending on where you are staying. South Coast in particular is not as affordable as most people would think. Mombasa itself is quite affordable. From housing, to transport and general amenities, Mombasa just welcomes you with open arms. The weather is perfect, the landscape is heavenly and the people are just the best. The cost of living here is not as cheap as it is in most of the towns we have mentioned, but it is very affordable considering this is one of the most beautiful destinations in the world.

10. Naivasha

Naivasha

Photo Source: Dgulotta Blog

This is of the most sort after destinations in the country. Being a mostly ‘touristic’ town, most people who live and work here revolve around that industry. This means they work in hotels, resorts, flower firms and a handful of other locally and internationally owned businesses. Food is very cheap here and so is housing. When it comes to transport, it is generally cheap, but it depends on the season. High seasons such as December often command higher transport costs because of the increase in demand, otherwise, it is very affordable.

Aside from Nairobi, most of Kenya is very affordable. The country presents a wonderfully attractive package; it is warm here, life is affordable, the people are friendly, the sights are mesmerizing and we all speak more than one language from childhood making communication more fluid. If you are looking for a tropical destination that will not break the bank, then Kenya is your country.

Via – TravelStart

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The gloomy future of real estate market

At Sep 16, 2016

The latest House Price Index published by the Kenya Bankers Association for the second quarter of 2016 is a reason to be sceptical about investing in real estate and the future of the property market in Kenya.

The 1.74 per cent increase of the HPI for the second quarter of 2016 compared to the 1.4 per cent rise during the first quarter reflected an uptick in house price, with the movement representing a not very promising future for the sector.

The property market performance of the first half of 2016 follows three years of very mild price changes. The demand and supply market dynamics have not been subject to significant changes over the period. The supply has been in response to the broad demand characteristics in the market. The new units being put up are mainly targeting the middle-end of the market, with the lower-end experiencing supply constraints arising mainly from the tendency of developers inclining more towards renting than selling.

Nairobi is the first area to feel the heat of the market. Investors in several neighbourhoods in the capital are feeling pressure from a slump in property prices and rentals as an obvious excess supply is creating new market conditions. With prices remaining stagnant in some areas and other areas like Kilimani producing negative results as selling prices have dropped by more than five per cent since last June, the property market dynamics are challenged. Mombasa on the other hand has been hammered from the drop in the tourism industry over the few last years. That directly affected the real estate sector.

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