Dear Dave: I know when it comes to investing you like mutual funds and paid-for real estate. What do you think about using condominiums as investment properties instead of single-family homes? — Jason
Dear Jason: I don’t really have a problem with condos as paid-for investments. I own a couple of them myself. When it comes to making this kind of investment for the first time, however, I would advise that you keep a few things in mind.
Based on equal price and equal neighborhood, the average single-family home will probably increase more in value over the years. Now, a nice, well-placed condo will obviously go up in value faster than a traditional house in a lesser neighborhood. So speaking in an overall sense, they’re not bad investments if you do your homework.
You have to think about what you’re getting into and also take into consideration a number of variables. What are the HOA dues or condo fees going to be? Is the condo association being managed well? That and the neighborhood are the two biggest concerns I have when buying a condo. A lot of condo associations are very poorly managed. And if they don’t provide proper maintenance or keep a certain percentage of the complex owner-occupied versus rental, the condo association or complex can lose the ability to get normal permanent financing. If they can’t get FHA, VA or conventional financing, the values are going to drop like a rock — because you’ve only got cash buyers and investment buyers at that point.
Research on these kinds of things doesn’t take an awful lot of work. Just call the management company, and the realtor who’s involved if it’s listed, and ask for the documentation. Most of the time this sort of stuff is public information, so it’s not hard to access. Some other questions you might ask are: What are the reserves for the roof? What are the reserves for paint and the parking lot? Are they collecting enough to pay their bills, and are they actually paying their bills?
Then you start looking at things from a buyer’s perspective. Would I want to live in here and have my wife and children here? Would a normal, reasonable person want to live here? If the answers are yes, then you’ve probably got a good, solid condo complex. — Dave
In most states you could lose your driver's license for not paying a speeding ticket. You'd have a real emergency then, wouldn't you?
I would advise looking at the situation this way: What is the amount of the ticket in relation to your income and overall financial health? If the ticket is $100 and you make $200,000 a year, then stop worrying and pay the ticket. But if you got slapped with a $300 ticket and you only make $20,000 a year, then that could be an emergency.
If you can cash flow it out of your budget, then leave the emergency fund alone. If not, then dip in for just enough to pay the fine and replace the amount as quickly as possible. I mean, you've got to get it paid, right?
Just remember to slow down a little when you're behind the wheel.
Question: I took a new job less than a month ago. Just the other day, I was recruited by a huge company for the same position that pays twice what I’m making now. I didn’t apply for the job that was offered; they came directly to me. I didn’t sign a contract or promise to work a certain length of time with my current employer, but they’re good people and I want to do the right thing and handle things well. Do you have any advice?
Dave: In situations like this I always try to put on the other person’s shoes. Let’s pretend you own the company and you just hired a young guy. A few weeks later, someone comes in out of the blue and offered him double what he’s currently making. I can tell you what would happen here. I’d tell him to take it. I mean I would. And as an employer I’m certainly not going to double his income that quickly.
I think you take the job. Just walk into your leader’s or supervisor’s office and tell the truth. Lay it all out there, and let them know that while you feel awful about the situation, you had no intention or misleading them or causing problems, but you simply can’t pass up the opportunity. Be sure to show an extreme amount of gratitude, and promise to do everything possible to make the transition as easy as possible.
Truthfully, if an organization cares about its team members, and one of those has the ability to double their income and they’re not breaking a promise in the process, this type of scenario is perfectly reasonable. It may be a little uncomfortable for you – and inconvenient for them for a while – but they can’t realistically expect you to pass up the opportunity to double your salary.
You’re a good man. Congratulations!
Dear Dave: Will hospitals take a settlement on past due medical bills, or is this a rare occurrence? — Kristin
It's not all that rare for hospitals to accept a settlement on past due bills. Most businesses will accept a settlement on past due accounts, and many hospitals will accept a deeply discounted settlement because they've usually gotten a big chunk of their money up front from the insurance company.
Let's say you had a $1,000 bill with a hospital you honestly haven't been able to pay for several months, or even two or three years. If you go to them and offer $300 or $400 as a settlement, there's a good chance you'll have a deal. Just make sure you get the agreement in writing before you hand anyone a check.
Remember, you have a moral and legal obligation to pay your debts in full if at all possible. But if you truly can't afford to pay, an agreed upon settlement between two parties can be an honorable and acceptable compromise.
My biggest worry is that you’re looking at your career the wrong way. Just making money shouldn’t be the measuring stick of success in your professional life. Whether you’re going to start a home business or work in an office for someone else, your work should engage you in doing something you know about and love.
You spend too many hours of your life at work to be miserable in what you do. Shuffling day after day through a job you don’t like — even one with a big paycheck attached — is also a bad idea. Sooner or later, the fact that you don’t like your work is going to catch up with you on the job and at home.
Think of something you love to do, then get creative and find a way to make money at it. It may mean turning a hobby into a part-time gig nights and weekends for starters. Who knows, with a lot of hard work and a little creativity, you could be your own boss in no time.
