Starting a Business on a BudgetStarting a Business on a Budget

About Me

Starting a Business on a Budget

From the time I was a young boy, I always knew I wanted to be my own business owner. Later in life, I ended up working in an office and barely making ends meet. I kept telling myself that I couldn't start my own business until I saved up a certain amount of money or finally cleaned up my credit and got approved for a loan. Eventually, I realized that if I wanted to start a business, I just could not wait any longer and had to do it on a tight budget. I made things work, and I am now a successful business owner. I learned a lot while building my business and still learn every day, so I decided to start a blog to help other new business owners. I plan to post many tips, so come back often for new tips.


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How To Fund Your Own Assisted Living With Real Estate

When you grow elderly, you may decide you are no longer able to live on your own, so it will be time to consider moving into an assisted living home. As the cost of living increases, so will the cost of assisted living care. Depending on where you live, the cost of assisted living can range from $28,800 to $66,000 per year. When you plan early, you can make sure your assisted living costs are going to be covered when you need them. Here are two ways you can plan to use real estate to pay for your assisted living costs.

Rental Properties

If you are still in your 20s or 30s, you have plenty of time to plan for your retirement. With all this time, you can buy real estate that will pay for your retirement and your assisted living costs. When you own a rental property, the property's value can increase each year while your tenant's rent covers your mortgage and other management expenses. 

Make sure to only buy rental properties that can generate enough rent to cover your expenses. Consider using and following the one percent rule and only buy a property that can be rented each month for one percent of its purchase price. Then, every few years buy another rental property to add to your rental portfolio. 

Over the next twenty to thirty years of buying rental properties, you will have a portfolio of homes and apartment buildings that should have increased in value. Begin to sell each rental property and roll over the equity from them to buy as many rental properties as you can with cash. Because these new rental properties won't have financing attached to them, everything you collect in rent will pay for any management fees. The rest will go to you. 

For example, if you own three rental homes that pay you an average of $1,500 in rent per month, you will collect $4,500 in rent. Depending on the state you live in, this should be able to cover your monthly assisted living costs for the rest of your life.

Equity Credit Line or Reverse Mortgage

If you own your home now, continue paying on your mortgage and the value of your home and home equity will increase over time. Make sure you keep your credit in good standing by paying all your bills on time. When you retire and need to move into an assisted living facility, you can use the equity that has built up in your home to pay for your monthly expenses. 

A reverse mortgage on your home provides you the chance to borrow against some of your home's equity while you or your spouse still live in the home. In this situation, the bank pays you a monthly amount, depending upon the amount of equity you have in your home and how much you can borrow. To qualify for a reverse mortgage, you need to talk to your lender and be at least 62 years of age

If you are not 62 years old yet, but need to pay for assisted living, you can apply for a home equity line of credit on your home. You do need credit to qualify for an equity line of credit, but you can borrow up to your home's total amount of equity. When you borrow against your home's equity, you still own the house. And, you will get the equity all at once so you can pay for your assisted living expenses.

With these two plans, you can use the cash flow from rental properties or the equity from your home to pay for your assisted living expenses.