How to Budget After Closing Costs When Buying a Home

Anyone who’s buying their first home has probably gotten used to stalking their bank accounts leading up to their closing making sure they’re beefing up their savings for a down payment and closing costs. According to Zillow, the median price of a home sold in America [as of December 2020] is $262,604. Putting 20 percent down on that home will cost you $52,520.

Factor in about two to five percent of the home price for closing costs, ($13,130 for five percent) and you’re easily down about $65,650 before you’ve stepped foot into your bare home. Sure, you’re trying to get to the 20 percent mark in order to avoid paying private mortgage insurance (PMI), but if you don’t factor in other costs you’ll accrue in the coming weeks and years, you might be biting off more than you can chew.

Read on to assess whether you’ll still have money left over for the things important to you after closing, or if perhaps you should be looking for a lower-priced home in order to make sure you can still maintain your lifestyle and have a beautiful space of your own.

1. Factor in Your New Bills

“A lot of people don’t bother to ask themselves what it will actually cost to live there,” says Jean Chatzky, CEO of HerMoney.com, financial editor at NBC’s “Today Show” for 23 years. Talk to someone who has a place similar to yours, whether it’s a house or a condo, that’s around the same size, in your neighborhood or building, and ask them to share their costs for heat, electricity, cable, and water. “Learning about the other associated expenses with buying this home can be eye-opening,” says Chatzky.

2. Consider Decorating Expenses

It’s important to add personal elements that will turn your house or condo into a home. “Making the home yours costs money whether you’re talking about paint or a trip… to buy all new furniture,” says Chatzky. “While purchasing a home is a big investment, it’s important to budget for the items that you’ll need to fill your home,” says Tina Rich, NYC-based interior designer. “Filling your space with furniture and accessories you’ve selected and love is what makes a house a home, so it’s important that you don’t clean out your bank account before you close.”

3. Decide Which Furniture You’ll Need First

“The best investment you can make is a quality bedroom set,” says Michael Robinson, furniture designer at American Modern Collection. “Granted, I have a biased opinion since I design bedroom collections.” He says that when people buy a high-quality bedroom set, they can have it for 25 years. “We’re a society that’s used to getting rid of stuff often and I think many often lose perspective of what quality actually is and why people used to buy quality products,” he said. Can you get a discount bedroom set under $1,000? Sure.

But it won’t likely be made from solid wood and built to last. Robinson says the Amish-made, wooden bedroom sets he designs for his company start around $5,000. This is where you should think about what you can make do with and are willing to replace in a few years, or whether you want furniture that lasts a few decades.

If you like to entertain, you might decide that a sofa is where you want to spend your money, or perhaps a dining room set. Research these prices and decide which items you want to splurge on as a quality investment right now, and which pieces you don’t mind getting second hand or cheap in order to fill your home.

4. Factor in Paint Costs

Whether you’re moving into a slightly larger condo or tripled your living size with a single family home, you’ll probably be painting it at some point. According to HomeAdvisor.com, hiring a professional to paint an average sized room (10 feet by 12 feet) costs between $380 to $790. Should you choose to paint a room yourself, paint will cost anywhere between $30 and $60 per gallon for a high-end brand that comes in three different finishes: flat, semi-gloss or high-gloss, according to the experts at HomeAdvisor.com.

Most rooms will require about two (gallon) paint cans. You’ll also need about two cans or primer ($7-15) for each wall so you’re looking at about $140 per room before you buy supplies. “I’m a fan of HGTV Home by Sherwin Williams because of its quality and it has a nice color range,” says Rich. “While there are always areas to save during a home renovation, paint isn’t one of them. Using a high quality paint—rather than an inexpensive brand—is crucial so your walls look professional and polished.”

5. Set Aside Money for Window Treatments

You’re excited to have rooms with beautiful natural light, but there are probably quite a few rooms in your new home that you’ll need to cover for privacy and protection from the sun. Not only do people often forget to set aside money for window treatments—whether that’s blinds, shades shutters, and curtains—they forget to factor in things like pets’ claws and children’s safety when purchasing these items, Robinson says. He recommends Hunter Douglas as a brand he sells through Unique Interiors in Cherry Hill, New Jersey.

They’ll come out and measure each window properly to ensure you get proper-fitting blinds that are best for your home and tastes. Faux wood blinds are the most popular window treatments he sells for Hunter Douglas these days. An average price point to cover a 36-inch by 60-inch window with faux wooden blinds from that company will set you back about $200. For comparison, the cheapest faux wood blinds we found at Home Depot are about $13 and cheap shades are around $7. Granted, those cheap versions won’t likely last long.

This just goes to show, even if you don’t plan on spending a lot of money on window coverings right now, you’ll still need to set aside money for the very basics in your new home.

6. Plan for Outdoor Home Costs

If you’re moving to your first house from an apartment, condo, or townhome, you might need to invest in a snow blower for your first winter there. (Consider looking for a certified refurbished one to save money.) You may need a new lawn mower, weed wacker, or a sprinkler system for your lawn. Have a front patio or back deck that needs furniture and an umbrella? That’ll be a few hundred dollars.

“Are you comfortable allowing things to look wild and beautiful, or do you want everything manicured beautifully every single month?” asks Chatzky. She suggests talking to a new neighbor about pricing. You could say: “Your landscaping is beautiful. Do you mind recommending the person who does it? Oh, and by the way, how much does it cost?” she suggests.

7. Account for Moving and Assembly Costs

Make a list of what you’re taking with you, what gaps you have, and do some shopping ahead of time so you can figure out what these items are going to cost, suggest Chatzky. If you’re shopping at IKEA or a store where the furniture needs to be put together and you are not capable of doing that yourself, you’re going to hire somebody to do it, so how much is that going to cost?

How much are the shipping fees? How much is it going to cost to have it moved? Whether you’re renting a moving truck and doing the move yourself and with friends, or hiring professional movers, you’ll be spending anywhere from about $200 to over $1,000. (Based on large truck rentals at uhaul.com, factoring in gas and mileage and taxes.)

8. Prepare for Home Maintenance Costs

“Your home inspection is a good road map to the expenses you’re going to have in the near future and you should pay close attention to that,” warns Chatzky. Harvard research shows you should plan on spending one to two percent of the value of your home every year on maintenance, says Chatzky. “Even if you don’t spend it in year one or year two, you’re likely looking at triple the expenses in year three.”

Now that you have an idea of the types of costs coming down the pipeline once you scrape out your savings account, budget for them in advance. “Think about how you’re going to use the place, how you’re going to live in the place, and what it’s going to cost you to get it into that particular kind of shape you want it in,” says Chatzky.

By: Diana Kelly

Diana Kelly is a freelance writer, consultant, and freelance writing coach. She loves taking fitness classes, squeezing in mini-workouts between articles deadlines, hanging out with her adopted puppy, Jackson, and hiding messes in closets and drawers.

Source: How to Budget After Closing Costs When Buying a Home

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COVID-19 Has Changed The Housing Market Forever

Amid all the uncertainty brought on by COVID-19 over the past six months, one thing is assured: the pandemic has re-ordered real estate markets across the board on an unprecedented scale.

Some of this may be irreversible. Real estate’s re-sorting this time isn’t just based on markets crashing (the Great Recession), political turmoil (the 1979 oil embargo), or financial speculation (the first and second dot.com busts)—after which there’s generally confidence that overall consumer demand and buyer preferences will sooner or later snap back to normal.

Thanks to the COVID-19 pandemic, more deep-seeded, tectonic-sized questions beyond markets and interest rates are being asked this time around that no one really has the answers to yet—like will people feel safer living in the south and southwest where they can spend all year social distancing outside? What if companies let workers work remotely for the rest of their lives? Why go back to retail shopping when I’m already ordering everything online? What’s the point of living “downtown” if half of the restaurants, bars, and museums never open back up?

How these questions get answered will fundamentally re-order how Americans live in the “new” pandemic normal, and as a result will play a huge X-factor in which cities and states will experience growth, demand, and price appreciation over the next 3-5 years, and which ones will stagnate and lose out. More broadly for large metropolises like Washington, D.C., New York City, and Philadelphia, the answers risk slowing or even reversing a wave of gentrification and wildly profitable downtown revitalization that’s been accelerating since before the Great Recession.

Crowded subway station, Washington DC, USA
Crowded Washington, D.C. metro station. In the COVID age Americans are seeking less density, more … [+] getty

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Against this backdrop, real estate’s new normal is also creating huge swathes of opportunity. Dozens of cities and counties that were once considered too small, too southern, too hot, too flat, or lacking in amenities, culture, or sophistication are now finding themselves being swooned to the top of the real estate desirability lists as Americans seek warmer, healthier, less dense, better educated, and more mobile places to live that offer closer access to the outdoors, better hospitals, and more open space with no clear end to the pandemic in sight. 

To get a better view on what’s really happening to real estate in America right now I decided that it was time to do a deep dive into the actual data from the experts—including CoStar, Zillow, and Realtor—on how COVID-19’s great migration is actually shaking out and where the money and bodies are moving.

Here’s what I found out.

Downtown Miami Brickell at dusk
Downtown Brickell Miami. Real estate platforms like Zillow and CoStar show Americans are moving … [+] getty

No matter who I spoke with, a few words kept resurfacing as we lurch into the post-pandemic future: warmer, safer, smaller, stabler, lower taxes, less regulation, and fewer lockdowns.

Regardless of where people come from or where they’re going, these things aren’t new on the list of what most Americans generally expect from the places they live, especially as they get older. (Northeasterners have been moving south and west for generations). The more interesting pandemic sub-text is the acceleration factor—and how the places where Americans are moving in the midst of COVID-19 may finally be expressing a more fundamental preference for how they really want to live instead of where they have to stay because of their job location or where their kids go to school. It also says a lot about where many American’s heads are right now, and more importantly, the specific criteria with which they’re considering making one of the most important next decisions of their lives in an era of unprecedented uncertainty.

The repercussions of America’s great COVID migration has the potential to re-shuffle the essential demographic and economic balance of America for the next generation. Realtors, investors, and politicans should be paying attention.

Real estate agent wearing a facemask while showing houses during the COVID-19 pandemic
The COVID-19 pandemic has transformed America’s real estate market forever getty

By every metric, Americans are moving faster now than they were before the pandemic.

Page-per-property views on real estate platforms like Realtor and Zillow are up over 50% year-over-year almost everywhere, inventory in America’s 100 top metro markets has been shrinking since March, along with days on market and the gap between list-to-sale price. A lot of real estate experts prefer the word “despite” when it comes to accounting for this phenomenon while the pandemic’s still raging, when it’s probably more accurately “because of”.  

“Real estate markets have undergone noticeable shifts since the start of the coronavirus pandemic,” George Ratiu, Senior Economist at realtor.com tells me. “In the wake of the lockdowns in March, Americans discovered that existing homes were not adequate for the new work, teach, exercise, cook and live at home reality. Based on realtor.com surveys of consumers, we learned that home shoppers are looking for more space, quieter neighborhoods, home offices, newer kitchens and access to the outdoors, traits which have revived a strong interest in the suburbs and smaller metro areas.”

Brick residential buildings along a tree lined sidewalk
Boston. Still rock solid when it comes to its real estate market even during the COVID-19 pandemic. … [+] getty

The other clear trend since the COVID-19 pandemic began is that residential real estate is on a tear virtually everywhere.

Previous recessions and economic shocks tended to pull some regions down while sparing or barnstorming others. This time, so far, every region’s a winner—as Americans put more stock in their quality of life, work, walkability, and community when it comes to where they root themselves next other than just the cables that previously tied them to their workplaces.

The Northeast real estate market remains strong, despite all omens otherwise since New York City was the original epicenter of COVID-19 flight back in March, and the overall low-tax, lower regulation trends across the country that aren’t in the region’s favor. According to realtor.com’s most recent data, five of America’s hottest real estate markets are in New England—Rochester, NY, Melrose, MA, Portland, ME, Hudson, NH, and Worcester, MA—each of which ranked in the top ten across more than three categories including lowest days on market, list-to-sale ratio, or page views per-property.

Columbus, Ohio
Columbus, OH. Home to three of Zillow’s hottest real estate market’s during the COVID-19 pandemic in … [+] getty

Data crunched by real estate platform Zillow’s research group paints a similar picture of strong regional growth across small cities as well suburbs within an hour of established major metro areas. I had Zillow look at the 100 largest metro areas based on five metrics—median sale price, median list price, days to pending, share of listings with a price cut, and page views—and grabbed the top and bottom seven in each one.

At the top of Zillow’s list as of October 2020, three of America’s hottest real estate markets are in Ohio: Columbus, Cincinnati, and Dayton. Boise and Salt Lake City also made the list, along with Stamford, CT outside of New York City. Austin came in number one. Louisville, KY, Memphis, TN, Honolulu, and Des Moines, IA were at the bottom on Zillow’s aggregate list, though Zillow’s economists were quick to point out that in today’s market that means “less good”.

“Even the coolest markets in America right now are generally performing well and tilted in favor of sellers,” says Cheryl Young, senior economist at Zillow. “There’s a lot of demand for housing right now and homes are typically selling quickly for prices above what we were seeing last year. It’s also worth noting that the bottom performers for the most part aren’t decreasing. They’re just increasing at a lower-than-average rate. The residential market is on fire right now in most of the country, so these ‘coolest’ markets aren’t necessarily doing all that poorly.”

Woman working on laptop in home office
Why wouldn’t you work here? getty

Trends show Americans are also still moving where businesses move, despite the work-from-home trend accelerated by COVID-19. Even if Americans don’t have to show up to the same office every day, the tax base, culture, vibrancy, hospitality backfill, and infrastructure (think school districts) that a thriving business and entrepreneurial community supports long-term is one of the essential underpinnings of a successful residential real estate market.

From this perspective, COVID is accelerating demographic trends that were already in place before the pandemic, especially when it comes to businesses seeking places to expand that are pro-growth, low-tax, politically stable, and stacked with an educated work force in advanced degrees like engineering, math, technology, business, and law. Austin, Salt Lake City, Raleigh, Charlotte, Nashville, and San Jose all top the list in 2020 in this respect according to CoStar, with occupied office growth expected to exceed 10% over the next five years. Dallas, Miami, Phoenix, Atlanta, San Antonio, and Boston aren’t far behind—all expected to grow by 8%+ as of Q3 2020 according to CoStar.

“Businesses will continue seeking low-cost alternatives to more expensive coastal markets COVID-19 or not, which has fueled growth in markets like Atlanta, Phoenix, or Dallas, though workers that might have once opted for downtown living have shown a preference for suburban locales in recent months,” says Andrew Rybczynski, Managing Consultant at CoStar. “Smaller, well-educated markets with similar structural advantages, like Raleigh, Charlotte, or Austin also qualify, especially because of their attractive workforces. While COVID and the recession it caused will hurt business growth and office absorption, we expect the structural advantages of many southern and southwestern markets to continue through foreseeable future.”

Aerial View of Spaghetti Junction in Atlanta, GA
Atlanta has been preparing for growth for decades. It’s time may finally be coming getty

When Rybczynski refers to “structural advantages”, what he means is governance. Using a simple measure of tax burden, CoStar correlates a rough relationship between lower taxes, pro-business governance, faster growth, and increased in-migration—all of which are currently skewing towards American metro areas with local and state governments that are willing to keep regulations and business costs low in exchange for job growth and economic opportunity.

For what it’s worth, these “structural advantages” also skew politically. 10 of 12 of America’s cities forecasted to experience the fastest growth in occupied office space according to CoStar over the next five years have Republican Governors, Legislatures, and Mayors. Nine of the top 15 cities where businesses are relocating and mopping up office space are in three states that predominantly lean Republican—Texas (4), Florida (3), and North Carolina (2)—including Austin, Dallas, San Antonio, Houston, Miami, Tampa, Orlando, Raleigh, and Charlotte respectively.

Ogden, Utah
Ogden is the county seat of Weber County, Utah outside of Salt Lake City and one of Zillow’s hottest … [+] getty

At the same time, however, Americans and its companies are not always moving in the same direction, suggesting a de-coupling of one of the most fundamental drivers of American migration for generations—namely people living near where they work. In some instances there’s overlap, like Austin, Raleigh, Columbus, and Salt Lake City. But overall Americans appear to be moving during the pandemic for more personal reasons than being simply motivated by employment or corporate relocation.

“The hottest housing markets in the new landscape are cities which offer desirable amenities—larger homes, leafy neighborhoods, access to the outdoors, walkability and proximity to grocery stores—in a more affordable package,” says realtor.com’s Ratiu. “Home buyers still want to be within commuting distance of large employment centers, but with the prevalence of remote work, they are willing to extend the distance from urban downtowns.”

In addition to the five Northeastern locations on the top of realtor.com’s hottest real estate markets to watch list right now, Colorado Springs, CO, Columbus, OH, Topeka, KS, Springfield, VA, and Raleigh, NC also ranked in the platform’s top ten in at least three criteria for precisely these more emotional reasons, say Ratiu.

Joint rest. Guy and girl relaxing on couch with hands clasped behind head.
Thanks to the COVID-19 pandemic America’s next generation of homebuyers is searching for something … [+] getty

“The current housing market is driven by several noteworthy factors. First, America’s demographics are skewing younger as the Millennial generation—the largest in U.S. history—is finally embracing home ownership. Second, the technological promise of the mid-1990s of freeing workers from their desks has come of age in 2020, as the coronavirus-induced quarantine has forced employers to rely on workers working-from-home. Americans have been resoundingly successful at navigating this transition, and in the process, discovered the benefits of shorter commutes and the flexibility of being able to work from anywhere.

In turn, this has shifted consumer preferences for housing, driving the transition into suburbs, smaller cities, second-home destinations and even rural areas. Third, riding in the wake of a decade’s worth of home price appreciation which has outpaced income growth, many Americans are seeking affordability again, leading many buyers into suburban neighborhoods and away from high-cost, high-density urban downtowns.”

Who’s notably absent from all the data?

Not a single city in California or the Pacific Northwest ranked anywhere near the top of anyone’s “Best Of” lists in terms of where Americans are moving, which suggests that the effects of COVID’s first flight from coastal cities last March may be fossilizing permanently. New York City, Long Island, northern New Jersey, Honolulu, Chicago, and Philadelphia were also conspicuously in the basement, reinforcing America’s net emotional migration away from high-priced real estate markets as well as high-tax, high-lockdown urban locations.

So what’s the bottom line? Keep your bathing suit and laptop ready to pack. The longer COVID-19 continues to push Americans into the “new” normal, the more of us will be moving south and west, working by the pool. Sometimes it’s worth just rolling with the data. Follow me on Twitter or LinkedIn. Check out my website.

Peter Lane Taylor

 Peter Lane Taylor

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Mortgage rates are now at their lowest point in history and they seem poised to go even lower. Danielle Hale, chief economist at Realtor.com joined Yahoo Finance’s The First Trade to discuss the possible impact the coronavirus could have on the housing market. #coronavirus#mortgagerates#housing market Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Connect with Yahoo Finance: Get the latest news: https://yhoo.it/2fGu5Bb Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz

Renters In Crisis: Housing Experts Say Canceling Rent Isn’t The Best Answer

As the economic consequences of the coronavirus pandemic extend into the future, Americans and policymakers are trying to figure out what type of assistance is needed for both homeowners and renters.

Since mid-March, more than 26 million Americans have filed for unemployment. The CARES Act, a $2 trillion relief package passed by the federal government, implemented financial safeguards for Americans, including expanded unemployment benefits and one-time stimulus payments. The Act also introduced up to 12 months of mortgage forbearance for federally backed mortgage loans on single-family homes.

But experts estimate the national foreclosure suspension leaves out the 44 million households that rent their homes. Now, lawmakers are proposing nationwide rent protections—like canceling rent—but housing experts say it’s not that simple.

What Lawmakers Are Proposing

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States and cities have stepped up and implemented their own eviction moratoriums by pausing evictions until after the national COVID-19 crisis ends. Although these moratoriums are a step in the right direction, housing experts have said since the beginning of the pandemic that these simply aren’t enough. Eventually the moratoriums will lift, courts will open back up and a flood of eviction proceedings will likely occur.

“But eviction moratoria on their own, as many governments are proposing or enacting, would only address a small part of the crisis,” reads a blog post from the Urban Institute’s housing research department, dated March 20, just one week after the national emergency was declared. “Without additional rent relief or flexible cash assistance, moratoria could reduce COVID-19 transmission risks today but create an eviction tsunami later.”

Representative Ilhan Omar (D-MN) has introduced a sweeping proposal aiming to implement nationwide housing relief. The representative from Minnesota is calling for rent and mortgage payments to be canceled (as opposed to being suspended or postponed) for up to a year for all rent and mortgage holders with an existing rental or loan agreement on their primary residence. There are no income or payment level restrictions for who would be eligible. The bill also would provide a federally funded relief fund for landlords and mortgage lienholders to cover losses from the canceled payments.

“In 2008, we bailed out Wall Street,” Rep. Omar said in a statement. “This time, it’s time to bail out the American people who are suffering.”

Considering that renters are a financially vulnerable demographic, there is no doubt that massive waves of evictions could be coming. Research shows that renters have lower incomes and less financial stability than homeowners. A report by the Joint Center for Housing Studies of Harvard University (JCHS) found that 25% of all renters in 2018 spent more than half of their income on housing.

This is far above the financial rule of thumb that recommends spending no more than 30% of income on housing. According to the JCHS report, in 2018, nearly half of renters spent more than that percentage, leaving them especially vulnerable to any potential decrease in household income.

Newly compiled data is already showing a decrease in how many Americans are paying their rent. According to a survey from the National Multifamily Housing Council, 89% of apartment households had made a full or partial April rent payment by April 19, compared to 93% of renters for the same time frame last year. And while the decrease is small for now, analysts say it’s just the beginning of what’s to come.

“Now it’s a question of when we will see these effects accumulate,” says Matthew Murphy, executive director of the NYU Furman Center for Real Estate and Urban Policy. “If the economy isn’t recovering and people aren’t back to employment, we will see more nonpayment and something will have to be done. The federal government is likely going to have to provide some sort of housing package.”

What National Rent Relief Could Look Like, According to Experts

The question of how the federal government can protect rent payers isn’t one that can be answered simply. Both experts say canceling rent would have significant ripple effects on communities, and doesn’t answer the question of who will eventually pay the associated costs.

“It’s not as simple as just canceling rent—we are all connected,” says Mary Cunningham, vice president for Metropolitan Housing and Communities Policy at the Urban Institute. “Landlords pay state and local government taxes, which fund schools, libraries and parks. To prevent ripple effects, we should just help renters pay their rent.”

Rep. Omar’s proposal includes a Rental Property Relief Fund to be established by the Department of Housing and Urban Development. The proposal would allow landlords to apply to have the full cost of any canceled rent payments covered by the federal government. Funding this could be difficult, considering the state of housing in America is one that is historically underfunded, and some experts say it’s often an afterthought for policymakers.

“Before the pandemic, we were poorly housed when it comes to affordability and there was no political will to do anything about it,” says Cunningham. “We definitely have strong research on how to keep people housed—it’s not that we don’t know how to do it, it’s that we won’t pay for it.”

Instead, Cunningham says, expanding existing programs, like the federal Housing Choice Voucher Program, could be a better option. These vouchers allow the government to subsidize portions of rent payments and were utilized during other times of economic distress, including during the aftermath of Hurricanes Rita and Katrina. Vouchers also have the advantage of reflecting local rent values, which fluctuate across the country and increase in higher cost of living areas like California and New York.

The Housing Choice Voucher Program has traditionally focused on lower-income individuals and families, but COVID-19 is sparking a broader renters’ crisis that requires rethinking existing assistance and options.

Murphy suggests that policymakers introduce new housing relief initiatives that will complement programs already passed in the CARES Act, such as sending more cash directly to Americans specifically to help pay their rent. As of now, most Americans say they’ll be spending their stimulus payments on bills. Additional stimulus payments in the future could continue that trend and help keep a roof over Americans’ heads.

Any successful responses to the financial implications of the coronavirus pandemic must address both renters and landlords. Murphy notes that providing assistance to landlords to cover costs like property taxes and water bills could prevent buildings from “tipping into financial distress.” Addressing cash flow issues, Murphy says, could better keep buildings and communities afloat.

Rent Relief Available Now

There’s no way of knowing when federal renter relief will be passed into law or what it might look like. Until then, renters should familiarize themselves with any eviction moratoriums in effect in their state or city. Arizona, for example, has halted evictions of renters facing economic hardship due to the pandemic until July 24.

But even with moratoriums in place, renters could still be at risk for eviction. There are reports of people being threatened with eviction in California during the COVID-19 crisis because landlords don’t understand or respect the current laws that are in place.

Addressing potential evictions is only the first step in assisting renters. Equally—or even more—important is what happens after these moratoriums are lifted. Some states are already implementing safeguards for what might happen in the future: Washington state isn’t allowing landlords to treat pandemic-related unpaid rent like regular debt that can result in an eviction. While all rent payments that are delayed between mid-March and June 4 will still be owed, landlords are required to work with tenants to offer them a reasonable payment plan.

Staying Informed

Information about current safeguards for your state or city can typically be found on your state government or city mayor’s websites. Because evictions are handled through the court system, state judicial departments also are involved in setting non-eviction rules and dates. In many states, the details are contained in governors’ executive orders. The fastest way to find up-to-date state-specific information online may be to search COVID rent relief and the name of your state.

Whatever rent payment programs are developed or legislated—and whether they’re implemented at the local, state or federal levels—it’s important that they don’t cause new waves of crises after the primary COVID-19 crisis period has passed. It would only make a bad situation worse to provide relief to renters for several months that then creates new financial problems. However these programs ultimately are funded, the right solutions will require both short- and long-term thinking that takes into account the needs of both landlords and renters.

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I’m a Personal Finance Reporter for Forbes Advisor. Previously, I covered personal finance at other national web publications including Bankrate and The Penny Hoarder. I’ve been featured as a personal finance expert in outlets like CNBC, Yahoo! Finance, CBS News Radio and more. When I’m not digging up the best ways to manage your money, I’m out traveling the world. Follow me on Twitter at @keywordkelly.

Source: Renters In Crisis: Housing Experts Say Canceling Rent Isn’t The Best Answer

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Renters plunged into economic hardship by the coronavirus will be protected from being kicked out of their homes under a national plan to protect Australians from homelessness. Prime Minister Scott Morrison made the announcement after meeting with his war cabinet saying the protections would last for at least six months. “States also agreed today, and further work will be done on this, on working to identify how relief can be provided for tenants in both commercial tenancies and residential tenancies, to ensure that in hardship conditions, there will be relief that will be available, and ensuring that tenancy legislation is protecting those tenants over the next six months at least,” he said. “That work will be done by states and territories, as it is a state and territory matter, and that work will be led by Western Australia, together with New South Wales, working with all the other states and territories, to bring back some model rules that can be applied in hardship cases. “So understanding what the trigger might be and how in those circumstances the tenants would be able to maintain their tenancies.” Mr Morrison said that decision would “mean something for landlords” but did not specify whether the government would compensate them. Instead he spoke about how every Australian would need to make a sacrifice. “Now, I know that will mean something for landlords, just as the decision taken today means something for banks, just like the decisions we have already taken as a Commonwealth government means things for our balance sheets, and as a people, for the Commonwealth government, as it does for the states,” he said. “All Australians are going to be making sacrifices, obviously, in the months ahead.”

As Wealthy Depart For Second Homes, Class Tensions Come To Surface In Coronavirus Crisis

Topline: As New York City’s coronavirus cases exploded in recent weeks, residents fleeing to second homes have come under intense scrutiny and push-back, prompting officials in multiple states to create highway checkpoints screening for New Yorkers and a national travel advisory for the entire Tri-state area, highlighting the dramatic roles class and wealth will play in the pandemic.

  • With over 56,000 coronavirus cases in New York, privileged New Yorkers with secondary homes are fleeing the City with massive effect on vacation home communities: the population of Southampton has gone from 60,000 a few weeks ago to 100,000 and rental prices in Hudson Valley rocketed from $4,000 to $18,000 per month—posing a threat to small-town hospitals that are ill-equipped to handle caring for high numbers of coronavirus patients.
  • In wealthy New England island communities like Nantucket, Martha’s Vineyard and Block Island that are heavy with secondary homes and short on hospital infrastructure, officials are going so far as to cancel all hotel, Airbnb and VRBO reservations while stationing state troopers and the National Guard to maintain flow on islands and, in the case of Rhode Island, instating 14 day mandatory quarantine on all people traveling to stay in the state from New York, New Jersey or Connecticut.
  • As outrage has grown at the privileged fleeing the city while middle and working classes remain confined in New York City apartments, there’s been social media clapback at ostentatious displays of wealth in isolation: Geffen Records and Dreamworks Billionaire David Geffen ultimately deleted his Instagram of his $570 million megayacht captioned: “Sunset last night..isolated in the Grenadines avoiding the virus. I’m hoping everybody is staying safe” after it sparked outrage on social media.
  • New York City’s poorer boroughs are hit hardest by coronavirus: Brooklyn and Queens, where median income is  $56,015 and $64,987, respectively, remain the epicenter of COVID-19, compared to Manhattan with average income of $82,459, which has been less permeated by the virus and is home to many of Manhattan’s wealthiest enclaves—and those most likely to have residents with second homes elsewhere.
  • On Saturday, President Trump said he was considering quarantining parts of New York, New Jersey and Connecticut, then, backed down and issued a domestic travel advisory for the tristate area that discourages residents of these states from non-essential domestic travel after “very intensive discussions” at the White House on Saturday night, said Dr. Anthony Fauci on CNN today: “The better way to do this would be an advisory as opposed to a very strict quarantine, and the President agreed.”
  • “Due to our very limited health care infrastructure, please do not visit us now,” reads a travel advisory from Lake Superior’s Cook County in Michigan, exemplifying vacation towns’ plea to travelers and second home owners across the country to stay away.

Background: Coronavirus cases in the United States have skyrocketed to 124,000, with deaths doubling from 1,000 to 2,046 in two days. Since those with COVID-19 can be asymptomatic for days, their presence in remote communities may be deadly, as they can spread the virus and wreak havoc on rural hospitals. The clash between wealthy and poor, also creates state-versus-state hostility, as federal support is limited and essential to states overcoming coronavirus.

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I’m the assistant editor for Under 30. Previously, I directed marketing at a mobile app startup. I’ve also worked at The New York Times and New York Observer. I attended the University of Pennsylvania where I studied English and creative writing

Source: As Wealthy Depart For Second Homes, Class Tensions Come To Surface In Coronavirus Crisis

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China Now Has An Answer To Its Housing Crisis – It’s Called Rent

In 2005, when I first began living in China, rent was incredibly low—as in, $100 per month for a two bedroom apartment near Zhejiang University in Hangzhou. This wasn’t just due to the fact that everything was cheaper back then or a lack of adjusting for inflation, but relative to the general price points of other goods and services, rent in China was startlingly cheap. There was simply a lack of demand for rental properties and it would have been a stretch to even call the rental market nascent–it hardly even existed. While manual migrant workers were renting out bunks in dormitories and rooms in suburban villages, the movement of educated, white collar workers to China’s big cities had yet to shift into high gear, there was an absolute glut of new housing being brought onto the market, and the cost of purchasing a home was relatively affordable–not to mention the fact that there was an acute amount of social pressure to own a home and having to rent was almost pitiable.

Today, the housing scene in China is very different. With a sizable portion of the population priced out of the market in key areas as well as a population that has grown accustom to being geographically agile and moving from city to city for the best opportunities, renting has started to lose its taboo status—and there are even signs of it starting to be seen as modern, fiscally strategic, and perhaps even a little chic.

In many parts of China, the housing market has topped out and stabilized, the construction boom has been curbed, and there is a growing suspicion among the young generation that going into long-term debt to pay an overinflated price for a house that statistically will be ready to demolition around the same time they have it paid off may not be the best of life decisions. Renting is now a viable option for China’s younger generation and has become an industry that’s now set to boom.

The real estate boom period

Today In: Asia

When we discuss China’s real estate boom period (circa 2005-2016) we have to keep in mind that home ownership was still a relatively new phenomenon. In a rather under-appreciated economic revolution, China’s real estate market was reborn in 1998, when the central government began breaking up workers units and privatizing housing. During this period, people were suddenly given the right to sell or rent out their homes, and China obtained one of the highest rates of home ownership in the world. But, as with most things in China, there was a deeper story behind the numbers, as in this era people were basically given their homes for extremely low prices.

“For my parent’s generation, they don’t even think about renting,” Cody Chao, a 20-something medical student from Suzhou, explained. “Besides, housing wasn’t that much of a financial issue. I know my dad got the place that I’m at right now at a very reasonable price—like, a crazy cheap price.”

However, these new economic privileges–not to mention a building boom unlike anything the world has seen before–set the stage for China’s well documented real estate feeding frenzy of the early 2010s. New social expectations were put in motion: in order to be considered viable for marriage a young couple would need to be able to lay claim to their own home. This pressure meant that upwards of 30% of new home purchases in China were being carried out due to an impending marriage—or, as was so often the case, parents buying a home for their child’s future marriage. According to Mark Tanner, the director of the Shanghai-based consumer research firm China Skinny, around 90% of Chinese first-time home buyers are supported by their families.

The Real Reasons The Chinese Love Throwing Money Into The Housing Market

Forbes Wade Shepard “It’s like part of the wedding deal,” Chao explained. “You get a house and then you start your own family. Once you have a house, a decent car, an okay job, then we can sit down, get a latte at Starbucks, and see what you are as a person. It’s more of a trade rather than a romance.”

Crazy cost of housing

However, this “wedding trade” is now feeling the ripples of financial reality, as the cost of housing in China’s economic epicenters is making some people accept long-term renting as a viable option.

“Housing affordability versus salary in China is the most out of whack in the world,” Tanner pointed out, “and almost all salary earners would struggle to buy a house with their wages, which is making more young Chinese who want to stay in the big cities realize that they are unlikely to ever buy a house there. Some will buy a home in their home town, and rent in the big city.”

How People In China Afford Their Outrageously Expensive Homes

Forbes Wade Shepard Property prices in China have become some of the most expensive in the world, having more than quadrupled since 2000. By early 2018, the average price-to-income ratio for a house in one of China’s top cities was a startling 34.9 years—meaning that it would take nearly 35 years of an average salary to pay for an average home. Even while China’s middle class continues to grow, the rising cost of housing has doubled that of disposable income. Compounding this issues is that not only are housing prices rising to unaffordable heights, but larger down payments are being required and mortgage interest rates are going up, making buying a home seem more and more like a far off dream for the average Chinese millennial.

Meanwhile, rent is still very affordable. For example, as of June 2018, the average monthly cost of a mortgage in China’s top cities was 16,000 yuan per month, while the average rent was less than half that at 7,000 yuan, according to a JLL report.

The rationale is now sinking in that for many of China’s younger generation buying a house prior to marriage may actually be fiscally irresponsible, and “nude weddings”—where neither party owns a home—are not only becoming more common but are starting to seem like a good idea.

“For any new family to buy property is impossible for someone who has just started their career. It’s just impossible,” Chao lamented. “Like, a house in Pudong will cost whatever I’m going to make for the rest of my life.”

To make matters even more difficult for China’s prospective young home buyers is that in most of China’s first- and second-tier cities there are strict home purchasing restrictions. These were originally designed to curb the ongoing mass migration to the country’s economic epicenters as well as to provide local governments with a more robust set of levers to control the housing market and stave off the very real possibility of bubbles and crashes. The impact on the ground is that if you’re from, say, Chengdu, and you move to Shanghai for work, you can’t just jump right in and buy a house like you can in the U.S. or Europe. You must first be able to show a lengthy (currently 5 years) work and tax paying record in the city before you are permitted to enter the housing market–regardless if you can afford it or not. Therefore, migrants to China’s top-tier cities must endure what amounts to an extended period of rental purgatory before they can even think about becoming a homeowner.

What Bubble? How China Stays In Control Of Its Wild Housing Market

Forbes Wade Shepard “If you look at a city like Shanghai, for example, of the 25 million population, just 11 million living there are Shanghainese, who own the vast majority of the residential real estate,” Tanner explained. “You’ve now got domestic migrants who have been living there 10+ years who have made their life there and are wanting to stay for both job opportunities and the general excitement of the cities.”

The new generation

China currently has around 400 million millennials who are entering the country’s labor and housing markets with a different set of life experiences and outlooks than their parents and grandparents. China’s young generation, the first to grow up into a relatively prosperous country, also face a different set of fiscal realities than their predecessors.

“I grew up free of worry of being starved, of being cold, of being without a home,” Chao explained.

China’s young and educated generation is typically geographically mobile, many have studied or worked abroad, and have become comfortable living and working in a city far from where they grew up. Millennials make up 43% of China’s urban migrants, according to a Chinese government survey. These new migrants often grew up in urban areas, were educated in urban areas, and now want to seize the opportunities of some of China’s most prosperous cities, and are growing more and more comfortable with renting as they do so.

Another social factor that’s impacting China’s rental market is that the millennial generation is getting married and having children later in life. According to China’s National Bureau of Statistics, the average age for a couple to get married and have a child in 1991 was 23.7 and 24.2 years, respectively. Last year, the average age to marry was 27.8 years old and the average age to have a child was nearly 30. JLL found that this delay in family planning has delayed home purchases, with more young Chinese willing to rent for a far longer duration of time than their predecessors.

The rise of renting

Over 200 million people in China are now renting their homes, and this may just be the beginning of a sector that’s going to explode in the coming years. While China’s rental market is currently valued by Jones Lang LaSalle at more than one trillion yuan ($140 billion), renting still only makes up a mere 2% of the housing market.

The Chinese government is very aware of the economic potential and the social necessity of the rental market, and in 2017 launched a new initiative pragmatically dubbed “Focus on Both the Rental and Sales Housing Markets,” which set out to develop the country’s fledgling rental sector. A wave of policies were unleashed to build more rental properties and to provide incentives, such as tax breaks, for property owners who rent out their unused homes as well as renters themselves. Beijing, for example, announced in 2017 that a third of the new housing units that would come online over the next five years would solely be for renters. Meanwhile, in the eastern city of Wuxi, the local government decided to permit renters to apply for residency, which would give them access to the city’s education, health, and other social services—previously, they had to own a home of at least 60 square meters.

The stage is now set for China to create a dynamic rental market, and the country’s big companies have likewise responded. Tech giants like Alibaba, Tencent, and JD.com are making big investments in the rental sector, as are major real estate developers like Country Garden, Vanke, and Dalian Wanda. Apartment booking apps are also popping up and attracting large amounts of investment. Ziroom, for example, is China’s equivalent of Airbnb with a twist, as they predominately deal in long-term rentals. Last January, they brought in $621 million in financing, with backing from Tencent, Warburg Pincus, Sequoia Capital, and Sunac, and is now valued in the ballpark of $3 billion. By 2030, China’s rental market is expected to quadruple in value to 4.2 trillion yuan ($588 billion), as the country braces for a new economic sector to boom.

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I’m a perpetually traveling writer who focuses on new cities (ghost cities), the New Silk Road, and international e-commerce as seen from the ground. I am the author of “Ghost Cities of China: The Story of Cities Without People in the World’s Most Populated Country,” a book which chronicles the two and a half years I spent in China’s under-populated new cities. For the past three years I have been traveling up and down the various corridors of the ‘New Silk Road’ or Belt and Road doing research for a book which should be out in 2018. I have been featured in, interviewed by, or appeared on CNBC Squawk Box, CBC The Current, Forbes.com, VICE, NPR Morning Edition, and BBC World

Source: China Now Has An Answer To Its Housing Crisis – It’s Called Rent

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Foreign Investment In U.S. Real Estate Plunges

The U.S. housing market has hit another stumbling block, as purchases of homes by foreign buyers dropped a dramatic 36%, according to a report by the National Association of Realtors.

The data comes from an annual survey of residential purchases from international buyers, which found that foreign buyers, led by the Chinese, purchased existing properties with a total value of $77.9 billion from April 2018 through March 2019, compared to properties totaling $121 billion in the preceding 12 months.

Investors from China exited the market most dramatically, with purchases falling 56% to an estimated $13.4 billion worth of residential property.

There are many reasons for the plunge, including less economic growth abroad — growth slowed to 3.6% in 2018 and is on track to slow to 3.3% in 2019 — tighter controls on outside investment by the Chinese government, a stronger U.S. dollar and a low inventory of homes for sale, according to Lawrence Yun, NAR’s chief economist and fellow Forbes.com contributor, who called the magnitude of the decline “quite striking, implying less confidence in owning a property in the U.S.”

Most foreign purchases were in Florida, followed by California, Texas, Arizona, North Carolina and Illinois.

While this is bad news for the overall U.S. market, it won’t make a crucial dent in the New York market, as foreign investment hasn’t been part of the market for some time, those in the industry say.

Leonard Steinberg, a broker in New York City with Compass, referred to the recent high-profile Manhattan purchases billionaire hedge-fund manager Ken Griffin, who closed on a $233 million penthouse earlier this year, and Amazon founder Jeff Bezos, who recently bought three condos for a combined $80 million.

“The reality of it is the Chinese billionaire or Russian oligarch were a small fraction of the market,” Steinberg says. “Your best foreign buyers are American buyers—just from other parts of the country.”

Svetlana Choi, a broker with Warburg Realty, said there is still foreign investment in New York, just not for ultra-luxury properties.

“While there are still Chinese investing, they would prefer to invest in an apartment building in Flushing that can bring a far larger return, than an empty super expensive apartment in New York City,” Choi says.

Noemi Bitterman, also of Warburg Realty, notes that as the market continues to decline, more investors may come through.

“My feeling is that now is definitely a time to buy because current prices reflect fair market value and not inflated prices as we saw six to 12 months ago,” Bitterman says. “The market has adjusted and prices are where they should be.”

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I’ve been working as a journalist in the New York metro area for more than a decade and have developed a specialization in luxury real estate

Source: Foreign Investment In U.S. Real Estate Plunges

Rock House from Grace Bay Resorts In The Turks & Caicos Launches New Homes – Carrie Coolidge

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A new luxury residential resort is being developed on the Turks & Caicos. Rock House, created by Grace Bay Resorts, will be a Caribbean version of a Mediterranean retreat overlooking the ocean. Rock House which will break ground later this year, is now offering a select number of homes for purchase. The resort will officially open to guests in 2020. Located on a majestic 14-acre oceanfront site with 600 feet of frontage and peaks soaring up to 95 feet above sea level, Rock House is the first residential resort tucked into the rugged, untouched limestone cliffs of Providenciales’ north shore……..

Read more: https://www.forbes.com/sites/carriecoolidge/2018/11/02/rock-house-from-grace-bay-resorts-in-the-turks-caicos-launches-new-homes/#2c9694c34220

 

 

 

 

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Home Improvement & Remodeling Ideas that Increase Home Value (And What to Avoid) – Heather Levin

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With the real estate market still in a slump, more and more people have decided not to sell their home. Instead, they have chosen to stay put, until things get better. I count myself in this group; I had my own home on the market for two years. My house sold, and the sale fell through, on two separate occasions. As a result, I’ve resolved to stay put until the real estate market improves.However, now that I’ve decided to stay in this home instead of moving, I plan to make several home improvements to make my home more comfortable (e.g. building a sunroom to combat the dreary Michigan winters, and building a backyard deck)…..

Read more: https://www.moneycrashers.com/7-home-improvements-to-increase-its-value

 

 

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Controlling Costs: Should You Buy New or Used Equipment? – Pj Germain

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Making a profit is the primary reason that most businesses are started. Nobody goes into business with the goal of losing money. Once you have committed to starting a business a large portion of your mental energy will be spent on trying to find ways to increase its profitability. Depending on the type of business in question, there may be various marketing methods that work better to spread the word and make potential customers aware of your offering.

While growing your business is the most obvious way to generate greater profits, there are other means to give your business a better chance of being successful. In the restaurant business, there are a number of ways that you can control costs through your purchasing decisions. Searching for better deals on locally grown produce and constantly comparing distributors for the best prices can help minimize costs and increase your profit margin. Finding a used food trailer or food truck for sale can save you a lot of cash when you are looking to expand your business outreach.

Restaurants use a lot of different kinds of equipment to serve their customers. Some of this equipment is visible to the clientele and some is out of sight in the kitchen or a back room. This means that in some instances the appearance of the piece of equipment can be as important as its functionality. In other cases, the primary concern is that the item operates properly and looks are not a consideration when making the purchase.

When you are attempting to control costs in your operation you have the option of buying new or used equipment for your restaurant business. Let’s take a look at some of the benefits and disadvantages of buying new or used restaurant equipment to help you decide which way to go when planning your purchasing strategy.

Buying New Equipment

New equipment usually comes with a higher price tag than used equipment. According to katom.com, there are a number of factors that may sway you toward buying new equipment despite the savings inherent in buying used items. Here are some of the major reasons you may want to purchase new rather than used restaurant equipment.

  • Reduced maintenance – New equipment is less likely to need maintenance than a used component. Service calls are expensive and can quickly eat up the savings that you thought you had achieved by buying second-hand equipment. Parts may also be hard to obtain in the event that a replacement is required.
  • Longer warranties – New equipment will have a manufacturer’s warranty that may extend for the life of the item. Contrast this with the short-term warranty you might get with a used piece of equipment.

Controlling Business Costs

  • Better performance – Technological advances will often mean that a newer piece of equipment will perform at a higher level and also be constructed to minimize water and power consumption. This leads to steady savings over the life of the equipment.
  • Get exactly what you need – If you are ordering a new piece of equipment you can insist on getting all of the features that you need and desire. You may have to make concessions when buying used and have to settle for a less than optimal component for your restaurant.
  • Conform to health standards – As technology advances and materials such as stainless steel are used more often to assist with cleaning, health standards also evolve. That used piece of equipment that you are considering buying may end up causing you some issues with the health inspectors and have to be replaced sooner than you had planned.

Buying Used Equipment

Used equipment can afford you substantial financial savings over purchasing brand new machinery. While at first glance, this may be all of the incentives you need to buy used stuff, slow down for a minute. As with any strategy that saves you money, there are some aspects of buying used restaurant equipment that you need to consider before making your decision. According to restaurant.org, here are some of the key factors to keep in mind when thinking about purchasing used equipment.

  • Know your requirements – If the equipment is an essential part of your business, such as a pizzeria’s oven, you should be cautious of used components. Make sure that the equipment that you are buying is actually what you need, and not a compromise determined solely by price.
  • Cost of the used item – Paying more than 50% of what a new piece of equipment would cost is probably not worth the savings.
  • Consider the total cost of ownership – You may save some money on the initial purchase, but over time a used item may end up costing you more in operating expenses. Saving on energy and water bills can help boost your bottom-line, and older models that are not as efficient can offset any saving made in the purchase price.
  • Reconditioned equipment – If the seller has reconditioned the item and perhaps replaced parts, it may be more serviceable than one that is bought “as is”, but will generally have a higher price tag.

Used Equipment for Sale

  • Warranties – Some dealers offer 30 to 90-day warranties on used equipment. This will not be the case for items bought at auction or through a private individual where no warranty is the norm.
  • Service and part availability – Can your equipment be serviced and can you obtain replacement parts? If not, it is a very risky undertaking if it is an important part of your operation.
  • Check the operability of the equipment – Ask the dealer to hook it up and see how it works. A reputable dealer will do that, though when buying used parts online this not practical.
  • Does the equipment stand up over time – Ovens, ranges, and stainless steel tables will last for a long time with no performance degradation. Other items like dishwashers and ice machines may not have as long a life if not maintained properly by the former owners.

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30 Incredibly Helpful Design & Storage Ideas for Your Small Bedroom

Finding design-savvy ways to magically create extra storage space in a tiny bedroom isn’t always easy. While unsightly over-the-door organizers and bulky dressers are always an option (if you squeeze them in), it pays to use your imagination and get creative when coming up with stylish storage ideas. To help make your life a little […]

via 30 Incredibly Helpful Design & Storage Ideas for Your Small Bedroom — Round Two

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