Five days after Hurricane Gustav made landfall the estimated damages are up to 10 billion dollars. This is a lot lower than originally expected because as the hurricane moved over land it fortunately went from a category 4 to a category 1 storm. Many people were worried that this storm was going to be as bad as Hurricane Katrina which did 41 billion dollars in damages. Unfortunately, this is only good news comparatively as insurance rates for coastal cities will continue to rise due to Hurricane season just starting.
People from effected areas will have to be evacuated as storms get stronger and will continue to have to determine what kind of damage has effected their homes. When Katrina was over and residents returned to their homes the debate became whether wind, flood or rain damage was to be paid by the insurance companies. Home-owner’s insurance covers the wind and rain damage, while the flood damage is paid by flood-insurance policies. To learn more on the rising insurance rates and what they mean to you visit USA Today’s site. So, to all the residents of coastal cities this hurricane season: Good Luck! You are going to need it.
I have helped many people choose new places to live and work, a real estate choice is a big decision to make. The first thing I do is make a list of the places that people travel most often. For many people it is the drive to and from work, the grocery store, etc. Some people have specific things they do often as well, if you travel to a particular country club, or golf course every weekend, jot that down.
When you are considering a new place to move, consider the travel distance and time it will take you to get from work to home, if you move 20 miles away, certainly you can find a new grocery store, but will you have to travel even further to get to your gym where you have a 3 year membership?
Consider these things, plot them out on a map, add up the gas, add up the time, and you may find that a pricier piece of real estate is actually saving you money and time.
I often use yahoo maps for distances like these.
This is something that I make all of my clients do, and everyone should do it at least once a year. Look into your insurance. Are you paying for insurance that you really don’t need? I was paying for earthquake insurance for years, and I love far away form any major fault lines.
Is your insurance enough? Believe it, you can save a lot of money by having more insurance too. If you have a lot of jewelry, or guns, or a home office, make sure that those things are covered by your current policy. I have heard weeping horror stories about entire collections that were destroyed by a fire, and the people who lost it all thought that everything in their home was covered, but their policy did not cover more than $1,000 for jewelry, and their collection would of cost for than $10,000 to replace.
Be sure to find out what your policy covers, is it replacement value, or current value? This could cost you in several ways, it is good to know before you need to replace computers for your business that you will be able to replace them if something happens.
Another thing to keep an eye out for is coverage for your land, home or business itself. Many people are surprised to find that their policy only covers 80% of the value of the home, this is common, it protects your mortgage holder, but it doesn’t do much for you if have $50,000 in equity, yet your insurance will not pay you a dime of that.
Most of my clients end up adding some coverage to their policies, and it costs very little, but it’s the only way to get the peace of mind that they thought they should already have.
Most people I have talked to know that they can pay off a mortgage in 15 years instead of 30 by paying extra money each month, but most people do not do it. When friends are looking to buy real estate I often try to talk them into buying something cheaper. It makes much more sense to me to have something you can pay off quickly, own, and get into buying more property.
If I told you that living in a slightly cheaper neighborhood today could net you 3 houses to own in the same time you would be paying for that big house that stretches your budget, would you consider it then?
Another way to convince friends to calculate their mortgage payments and options is to give them the jail scenario. If you have no house payment, and bills, you would be free. Free to do what you want when you want. If you have that mortgage bill coming every month for 30 years, that’s like a life sentence. Wouldn’t you rather be free in 15 years instead of 30?