First responders put their lives on the line on a daily basis – and programs have been established to thank them for their sacrifice. The Good Neighbor Next Door Program for first responders (HUD Housing) is a program intended to benefit both the community and those of us who serve and protect it.

When I first joined the police department, I heard a rumor about a program that let officers buy a home for way less than market value. I later found out it was called the Good Neighbor Next Door Program, sometimes referred to as the Officer Next Door Program.

But you know as well as I do that there’s always a catch to any great deal. Sure, you may be able to get a HUD home as a first responder for a fraction of the price – but what will it really cost you?

Everything You Need To Know About HUD Housing

I’ll give you insight into this program. If you buy a home in the Good Neighbor Next Door Program, you can bet that the neighborhood will be less than desirable.

The government entices good home owners, like you and I, to live in these rough neighborhoods by offering homes at a fraction of the price.

But is it worth it?

Everyone’s situation is a little bit different. Before you decide, let’s explore everything you need to know about this HUD program.

Benefits For First Responders And Teachers

There are many people in society that have a part in making the world a better place. Police, fire, and emergency medical technicians spend entire shifts trying to save lives and put families back together.

Don’t forget about the teachers. Teachers literally have the job of shaping our future. They have the honor of shaping our children and implementing morals and values into their lives.

These jobs are not to be taken lightly. They require great sacrifice.

The United States Department of Housing and Urban Development (HUD), understands the sacrifices teachers, emergency medical technicians, firefighters, and police officers make each day.

Because of these sacrifices, the HUD’s Good Neighbor Next Door Program was created specifically for those of us in these professions.

What Is HUD?

The Department Of Housing and Urban Development (HUD), was established on November 9, 1965, under President Lyndon B. Johnson’s War on Poverty. HUD was created as a Cabinet Department under the Department of Housing and Urban Development Act, and it combined various other older federal agencies.

HUD’s mission is to meet the housing needs of America by creating national policies and programs that make housing more affordable, enforce fair housing laws, and improve or develop decent homes and suitable communities.

HUD also gives Americans a voice concerning their home and environment at the Cabinet level. HUD is a huge advocate for home ownership for low-income and moderate-income families.

HUD supports families by creating programs and policies to help them find affordable quality homes. Some of HUD’s programs include:

Community Development Block Grants

Federal Housing Assistance Program

Fair Housing Initiatives Program

HOME Investment Partnership Act

HOPE VI Program

Section 8 Rental Assistance

Good Neighbor Next Door Program.

The Good Neighbor Next Door Program

The Good Neighbor Next Door Program (GNNDP) is a plan that has been put into place to assist law enforcement officers, firefighters, teachers, and emergency medical technicians with the purchase of affordable and suitable homes.

The Good Neighbor Next Door Program is part of HUD’s mission to revitalize and improve specific neighborhoods by advocating for homeownership. To accomplish this, HUD allows qualified public sectors to purchase HUD-owned homes at a 50% discount.

Who Qualifies For The Good Neighbor Next Door Program?

Law enforcement, teachers, firefighters, and emergency technicians all qualify to be a part of the GNND program.

Law Enforcement

To qualify as a law enforcement officer, you must be a full-time employee of a law enforcement agency. The agency must be part of the federal government, a state, a unit of general local government, or an Indian tribal government.

In a nutshell, you must be sworn and have arrest powers that you use on a daily basis to make arrests for the lack of compliance of federal, state, township, tribal, municipal, and or county laws.

Teachers

To participate as a teacher, you must also be employed full-time. Teachers must work at a state-accredited public school or private school that serves students in grade levels pre-kindergarten through 12th grade.

Teachers must also teach in a private or public school that serves students in the same area as the HUD home they are inquiring to purchase.

Firefighters & Emergency Medical Technicians

In order to participate in the GNNDP, firefighters and emergency medical technicians must be employed full-time by a fire department or emergency medical services responder unit.

The employer must be part of the federal government, a state, a county, an Indian tribal government, or a unit of general local government that serves the area in which the HUD home is located.

For some of us, this may be a deal breaker – depending on where you work.

What Is A HUD Home?

A HUD home is a property that came into the possession of the Department of Housing and Urban Development at some point during the foreclosure process.

Most of the foreclosed homes that come into HUD’s possession are a result of a delinquent Federal Housing Administration (FHA) mortgage loan. When a person purchases a home or property with an FHA mortgage loan attached to it, the federal government has agreed to insure the loan for a private lender.

If the homeowner stops making payments on the FHA loan, the lender may decide to put the home up for foreclosure in order to recoup some of their loss.

When this happens, the lender can sign over the homeowner title back to the government in order for them to sell the home. This allows the lender to write off some of the debt they incurred when the borrower fell behind on payments.

After this, the home becomes a HUD home and is only available to purchase through HUD programs.

Do All HUD Homes Qualify For The Good Neighbor Next Door Program?

No, every HUD home does not qualify for the GNNDP. All HUD homes that qualify for the Good Neighbor Next Door Program must be single-family homes located in revitalization areas.

When they are identified, these properties are made available for purchase through the program for seven days.

What Is A Revitalization Area?

To be politically correct, revitalized areas are geographic areas that the United States Congress has designated for HUD programs under the provisions of the National Housing Act.

However, you and I both know this means the homes are located in rough areas.

There are three areas of criteria that Congress examines before a neighborhood is designated as a revitalization area:

The average overall household income in the area

The Federal Housing Administration insured mortgage foreclosure is in the area

Those who qualify to be a part of the HUD Good Neighbor Next Door Program can see what homes are in revitalization areas by visiting the HUD Home Store.

The HUD Home Store serves as a listing site to view all of HUD’s real estate owned (REO) single-family properties. This site can be used by the public, real estate agents, state and local governments, and nonprofit organizations.

Real estate brokers and other approved organizations that are registered can also place bids on behalf of their clients who may be interested in a HUD home. On the site, you will use HUD’s single-family home locator which is a map that displays all of HUD homes in revitalized areas.

There are many revitalized areas around the United States and HUD is constantly working with localities to designate more areas.

How Much Money Do You Have To Put Down On A HUD Home?

Depending on the purchase price, the down payment will be between $500 to $2,000.

If the house you are interested in is listed for $50,000 or less, then your deposit will be $500.

If the home you wish to purchase is greater than $50,000, the necessary cash deposit will be somewhere between $500 and $2,000.

All deposits are determined by HUD according to their guidelines and policies.

Keep in mind, if you are interested in purchasing a HUD home, you are required to use a qualified HUD real estate agent regardless of how you found the home.

You can find a HUD real estate agent in your area by searching for one on the HUD’s website. Once you have chosen an agent, they can take you on a tour of the home you are interested in.

Seek Expert Advice

Depending on the condition of the home, you may want to take a contractor with you to get an idea of how much it will cost you to fix any damages. We have all seen how some of these foreclosures have been treated.

Unfortunately, you will not be able to hire a home inspector until after you have made your deposit. Keep in mind, your deposit is not refundable, so you want to initially make sure the home you are interested in is not only suitable but also worth the cost to fix.

Once you have found a house you are interested in, your real estate agent can bid on the home on your behalf. You can bid any amount for the home but the bid must be at least 1% of the list price in order to be valid.

If your bid is accepted it will be entered into a lottery. If your bid is chosen, a HUD representative will contact your agent. Once your bid is accepted, your agent must confirm your deposit amount with the property’s asset manager.

Your deposit must be certified funds such as a cashier’s check or money order, and it will be due within two days of your bid being accepted.

Be sure to have the funds ready before you make a bid.

How The HUD $100 Down Program Works

As noted, HUD will take care of 50% of the house listing sale price, so if the home is listed as $200,000, you will need to take out a mortgage for $100,000.

HUD will require you to take out a silent second mortgage in order for you to receive the discount. If you qualify for the FHA insured mortgage program, you will only be required to make a small deposit of $100.

In addition, all of your closing costs will be worked into your mortgage.

What Is The FHA Insured Mortgage Program?

The FHA, or Federal Housing Administration, is a government agency that provides mortgage insurance on loans that have been provided by FHA approved lenders in the United States and its territories.

The FHA is able to insure single-family and multi-family homes, hospitals, and residential care facilities. All FHA’s monies are self-generated, making it the only government agency to achieve this feat.

FHA mortgage insurance was set into place to protect lenders against loss if the property owner falls behind or is no longer able to pay their mortgage. This significantly minimizes the risk lenders take on.

If a borrower defaults on their loan, the FHA will endure the cost of any claims for unpaid principal balances and the defaulted mortgage.

What Is A Silent Second Mortgage?

A silent second mortgage is the second mortgage the government takes out on your home in order to fulfill the second portion of the balance due – the 50% sale price left over after your discount.

You are not required to pay interest or principal on the second mortgage, but you are required to sign for the mortgage and note. This second mortgage exists in the event you break the HUD contract. If this occurs, you will be responsible for both loans and the total price of the home without the 50% discount.

How Long A Person Is Required To Live In A HUD Home

In order to fulfill the requirements of the Good Neighbor Next Door Program, each occupant must live in a HUD home for a minimum of three years. This must be your primary residence and not a second home.

This is why it is so important for you to take a contractor with you when you are in search of a new HUD home. This will minimize the possibility of getting a home that requires far more renovation than you initially thought.

Is The Home Worse Than You Thought?

If you find yourself in a home that requires numerous repairs and you don’t have the cash on hand, there are separate government loans available to help.

The 203(k) loan is one of these repair loans you may qualify for. If you are approved, you can roll the amount of your loan into your mortgage so you are only required to make one payment.

However, if you want to save the most money, don’t roll the 203(k) into your main loan. Pay off the smaller loan as soon as possible to avoid paying large amounts of interest to the lender.

Verifying Occupancy

Once you sign for your mortgage and note, the National Servicing Center (NSC) will oversee your Good Neighbor Next Door contract. You will need to certify you live in your home each year as part of your agreement with HUD.

As part of the program, owners receive an annual certificate that must be signed, dated, and returned to the specified address in a timely manner. They will receive this letter each year around the anniversary purchase date of the HUD home.

If the letter is not sent back in a timely manner, the NSC will send a follow-up letter a month later.

If you do not sign or return either letter, the NSC will refer your case to be investigated, and an investigator will be sent to your home to verify the occupancy of the property. You will then be asked to sign the certificate in their presence.

If the investigator is not able to verify occupancy, your case will be turned over to the Office of Inspector General for further investigation. At this point, it is possible you may be prosecuted if your occupancy is not verified.

To avoid this, make a note of your anniversary purchase date so you don’t miss your occupancy certification. If any documents are falsified, you may be prosecuted for fraud – which doesn’t look good if you’re a first responder.

If You Are Unable To Stay In Your Home For 3 Years

In the event you are not able to stay in your home for the required three years, contact HUD as soon as possible. You will, unfortunately, be penalized for not fulfilling the contract between you and HUD.

You will still be required to pay for the 50% discount you received on a prorated basis. For example, if the total home price was $180,000 and your discounted portion was $90,000 – you will be on the hook for the full amount ($180,000).

When You Can Sell A HUD Home

As a participant of the GNNDP, you have to remain in your HUD home as a primary residence for three years.

Once you have reached the required occupancy period of at least 36 months to fulfill the agreement, you are free to sell your home and receive 100% of the profit.

You may also remain in your home or use it as an investment and rent it out. You will then become the landlord of the property and will be able to keep all the income made from rent payments.

In the most simple of terms, you can sell your HUD home as soon as you have fulfilled your agreement with HUD. This can vary depending on which agreement you signed and any additional terms included in your contract.

The HUD Home Buying Process

The process of initially purchasing a HUD home occurs pretty fast compared to purchasing a traditional home. But as you can imagine, since the government is involved, there are a bunch of hoops you have to jump through before you can close on a HUD home.

As mentioned prior, you must work with a qualified real estate agent that is registered with HUD before you are able to bid on a HUD home. Your bid, deposit, and financing are really what determines how soon or how easy it will be for you to purchase a HUD home.

If your bid is accepted and as long as you have your deposit ready and financing, the process is pretty straight forward from that point on.

How Long It Takes HUD To Accept An Offer

Through GNNDP, HUD homes are available for purchase exclusively for seven days. If your bid is accepted shortly thereafter, your real estate agent will be notified within two days.

How Long It Takes To Buy A HUD Home

In most cases, it takes thirty days to close on a HUD home, but HUD can extend the closing deadline if the purchaser needs more time to process paperwork or loan applications.

The extension must be in writing in order for it to be official. HUD also has the right to deny an extension request if there are any issues.

Can You Flip A HUD Home?

In general, yes, you may flip a HUD home but it depends on your definition of a “flip.” A “quick flip” is normally not possible due to the primary residence stipulations.

If you are purchasing a HUD home as a participant of one of HUD’s programs, you will have to abide by whatever agreement is placed in front of you before you can sell.

For example, before you are able to flip a home as a GNND participant, you will not be able to flip your home until after the 36-month living requirement has been fulfilled.

If you sign up for one of HUD’s other programs, you may have to stay for a year before you are able to flip your home,

Buying HUD Homes As An Investor

If you are going into an agreement with HUD as an investor, the process is different – but possible.

As an investor, you are still required to partner up with a HUD registered real estate agent and they are required to bid on a HUD home on your behalf. In general, HUD’s overall goal is to have homeowner-occupants purchase their homes rather than an investor.

Since this is their goal, HUD has what they call an “exclusive listing period” which forbids investors from bidding on a property for a 15-day period. Only owner-occupants, nonprofits, and government entities are allowed to bid during the exclusive listing period.

However, once the period is over, bidding becomes available to all bidders including investors.

Can I Pay Cash For A HUD Home?

Yes, you may purchase a HUD home with cash, but if you are purchasing a HUD home as a participant of a HUD program, you may be required to use a cashier’s check or money order.

Can You Negotiate A HUD Home Price?

You may offer less than the HUD home’s initial listing price, but generally, there is a lot of competition during this process. If your bid is accepted, there is no negotiating back and forth if you find the home is in need of repair.

HUD homes are listed in “as is” condition.

The HUD Program And Closing Costs

According to the HUD policies, HUD will pay the following closing costs:

Outstanding property taxes and other unpaid fees such as Homeowner Association (HOA) balances and utilities

HOA transfer fees

Repair Escrow Fees of $200

Half of the agent fees (only the HUD agent fees)

Recording fees and charges for the deed

HUD may pay for the following costs:

Appraisal Fee for a FHA loan

$20 for a credit report

Home Inspection

Flood Certification

Homeowner’s Warranty

Loan Discount Points

Loan Origination Fee (up to 1.5% on FHA loans)

Recording Fees

Title Insurance Coverage for Lenders and Owners.

As you can see, the closing costs that are covered by HUD can vary. In general, you are required to pay your realtor fees as well as some additional closing costs. On average, you can expect to pay 3% – 4% of the home’s final price in closing costs.

The Advantages Of Buying A HUD Home

Purchasing a HUD home can be a great investment

HUD home buyers will receive at 50% discount off of the sale price

Owner-occupants have the opportunity to bid for a HUD home exclusively without worrying about being outbid by investors

Investors have the opportunity to purchase a home far below market value

There are a plethora of resources available for homeowners to purchase a HUD home

If homeowners qualify for an FHA loan, they will qualify for the 100 dollar deposit program

Closing on a HUD home usually takes thirty days

Once a homeowner has fulfilled their agreement with HUD, they are free to sell their home and receive all profits

Homeowners can turn their HUD home into an investment by renting their home out at the end of their agreement with HUD

There are loans available to repair home damage and it can be rolled over into mortgage

Deposits can range from $500 to $2,000

The Cons Of Purchasing A HUD Home

If you are a participant of the Good Neighbor Next Door Program, you are required to live in your HUD home for at least three years, so if you are offered a job in a new state, you are still required to fulfill your agreement with HUD

HUD homes are purchased as is, so your potential home may need a lot of repairs

HUD homes are not listed for very long as they are purchased quickly

As a primary residence in a revitalization area, it may not be the best option for law enforcement due to officer safety concerns and the security of their family

If you are a teacher, an emergency medical technician, a firefighter, or a law enforcement officer, purchasing your home through HUD’s Good Neighbor Next Door Program can be a great investment and a great way to give back for all of the amazing things you do.

If you’re willing to live in a revitalization area.

However, before you jump into any type of a purchase, be sure to know everything you can about the area before you enter into a contract. Subjecting your family to a rough neighborhood for a minimum of three years may not be worth it.

Use your training and experience to make the best decision about the neighborhood before you sign anything. Don’t put your family in danger just to save money.

This post originally appeared on Arrest Your Debt.

In the past, a stay at home job was not something most people believed could be profitable enough to live off of.

Traditionally, people who were employed got up each morning, left their house for an eight-hour job, then came home for dinner, a little reading or TV, and bed.

What Are Stay At Home Jobs?

While some people still do this, there is a major shift taking place. Many people have started to work from home for many reasons. New parents may want to stay home with their children, but they also want to continue to work in some capacity.

Sometimes people care for aging parents or a relative who is ill and they need to be home, but they still need an income. In some cases, people want to take advantage of the growing “gig economy” – working temporary, flexible jobs in a contract or freelance situation.

In other cases, people want to start and grow their own home-based business. The common element in all of these situations is that people work from home.

Advantages Of Working From Home

There are many advantages to working from home. The main advantage is the flexible schedule.

If you work from home, you are not “locked-in” to an eight-hour workday away from home. This is a benefit because you can get some to-do’s done during the workday (like dropping some laundry in to wash and go to the dentist).

In addition, it is easier to save money, as there are no commuting costs, no cost for a work wardrobe, and no paying for coffee on the run or lunches out. You don’t have distractions from office co-workers and you can customize your work environment for maximum efficiency.

Disadvantages To Working From Home

There are also disadvantages to working from home.

It takes a great deal of self-discipline to work from home. Sometimes it is difficult to develop a schedule or a routine and it is easy to waste time (hello YouTube!). If you are stuck on a work project, it is easy to procrastinate and take a nap instead of finishing your work.

Also, working from home can be isolating. You may work all day without having a conversation with another person.

Regardless of the disadvantages, many people elect to work from home. Whether they choose to work a full-time job or do a side hustle from home, people can make money from the comfort of their own living room.

If you want to work from home, there are many options. It has never been this easy to make money online. Read on for a list of 25 of the best stay at home jobs in the United States.

25 Best Stay At Home Jobs

There are SO many ways that you can earn a part-time income (or even a full-time income) working from home. Here are 25 of the very best stay at home jobs.

Pick one and get started right now!

Customer Service Jobs

If you enjoy helping people, there are multiple remote customer service positions that you can do from the comfort of your own home.

Call Center

If you enjoy talking with people, you might consider working from home as a call center representative.

There are three types of call center jobs:

One is customer service. People call in when they have a problem with a product or service.

Another area is inbound sales. People call in when they want to purchase something.

A third area is outbound sales. Employees call people in an effort to sell a product or service. Many companies with call centers employ people who work from home.

All you need is a telephone, a headset, and a computer with internet access.

How Much Does It Pay?

Call center representatives make about $10.00 an hour (plus commission) if they are in sales.

For customer service, representatives typically make about $15.00 per hour, but there is no commission.

Chat Agent

Have you ever been on a website and a little chat box popped up in the lower corner of the screen with the message “How can I help you?” The person that sent that message is an online chat agent.

Chat agents provide customer service, sales, technical support, and general assistance to users. Since all communication is done online, most chat agents work from home.

How Much Does It Pay?

The pay for online chat agents varies, but most customer service agents in retail and business support make about $13 per hour.

Bookkeeper

If you like working with numbers, starting a bookkeeping business from home might be the perfect idea for you.

Bookkeepers create and maintain a record of financial transactions for business owners and create financial statements for them. If you do not have a bachelor’s degree in accounting, you will likely need to have some training in the skills that bookkeepers use on a daily basis.

How Much Does It Pay?

In a regular business setting, bookkeepers typically earn about $40,000 per year. However, as a freelancer, you can set your own rates, so it is possible to make even more than that.

Best Online Jobs

If you are an introvert or just like working on your own at home, an online job may be the best fit for you.

Virtual Assistant

With the growth of small businesses, entrepreneurs find that they no longer have time to complete the tasks that support the business (like managing email, creating social media content, bookkeeping and payroll and more).

They may not need someone full-time and it may not be necessary to have someone on sight. That is when the entrepreneur turns to a virtual assistant.

A virtual assistant (VA) is a personal office assistant who does clerical and administrative jobs. It does not require any special training, but it helps if you are efficient in clerical and administrative tasks, organized, and compliant with deadlines.

How Much Does It Pay?

If a VA works for a company, the typical pay rate ranges from $10 to $20 per hour. However, freelance virtual assistants can set their own rate, and most make well above that.

Fiverr is a great place to start looking for virtual assistant jobs if you’re interested in making money as a freelancer.

Sell On Amazon

The Amazon FBA (Fulfillment By Amazon) program is a terrific way to work from home. With their successful model, entrepreneurs can try their hand at selling with the world’s largest retailer.

In this venture, a seller has an online presence (website), that is run by Amazon. The seller finds his or her own products to sell, often by buying products on clearance at a retail store.

The seller ships the products to an Amazon fulfillment warehouse, where the items are stored. When the item sells, Amazon packs it and ships it.

How Much Does It Pay?

The amount of money that someone could make varies widely from month to month. It really depends on the items that are being sold and how much the seller invests in inventory at the beginning.

Social Media Manager

Just about every business has a social media presence. Advertising for a business and creating a brand using Facebook, Twitter, Pinterest, and Instagram is as important now as TV and radio advertisements were in years past.

Freelance social media managers often work from home. These professionals update social media accounts for businesses with new, fresh content. They also respond to questions or comments sent by followers and they moderate the accounts.

How Much Does It Pay?

Most social media managers earn from $10 to $20 per hour, depending on experience and the businesses for which they are working.

Again, Fiverr is a great place to start working as a Social Media Manager.

Take Surveys

Taking surveys to earn money has been around nearly as long as the internet has!

The positive part is that it is very easy to get started – just sign up with a website like SwagBucks or Survey Junkie and you’re ready to go.

Also, you can do it at your leisure.

How Much Does It Pay?

The negative part about taking surveys is that you don’t make much money doing it – maybe a couple of hundred dollars a month.

Some survey sites offer the option of being paid through PayPal or with a gift card for a variety of merchants.

Search Engine Evaluator

Have you heard of search engine evaluation? Don’t worry, I hadn’t either until I did the research for this post.

This may be the least familiar job to you on this list, but it is a very popular work-from-home job. A search engine evaluator analyzes search results on the internet to determine their relevance and quality.

A search engine evaluator’s job typically has flexible hours and specialized training or equipment are not needed.

How Much Does It Pay?

They are independent contractors that work for an internet company and they are paid between $12 and $15 per hour.

The challenge is maintaining a full-time schedule, if that is what you are wanting. Most companies only allow you to work for a few hours a week up to a fairly full part-time schedule.

Maintain A Website That Uses Affiliate Marketing

Affiliate marketing is when you refer someone to a related product or service using a link on your website.

When a visitor to your website clicks on your link and makes a purchase of that related product or service, you earn a commission.

For example, suppose you have a health and fitness website. You have an affiliate agreement with a large sporting goods store.

In one of your website posts, you mention a particular type of athletic shoe. You create a link to the sporting goods store and recommend that visitors purchase the athletic shoe through your link.

If they do, you get a commission from the sporting goods store.

Tech Jobs

If you absolutely love creating and designing on your computer, some of these tech jobs may be a great way to help you earn an income.

Graphic Designer

Graphic design involves the ability to communicate with people using pictures, photos, drawings, and other graphics.

Graphic designers create advertisements, business logos, websites, posters – anything that requires visual communication.

To become a graphic designer, you could get a degree in one of many fields – graphic design, visual communications, advertising design, and the like. Or you can teach yourself through books, online courses, workshops, and other development strategies.

How Much Does It Pay?

A creative career in this field provides graphic designers with an average salary of about $46,000 per year.

I paid a graphic artist I found on Fiverr to create the logo for Arrest Your Debt.

Website Designer

Website designers are tasked with creating websites that are functional and have an interesting and clean look.

Although you do not need a degree or special certificates to be a website designer, you do need to have a good eye for layout and design (including color and fonts) and an ability to structure a website so that it is easy to navigate for visitors.

If you know how to code, that is definitely a point in your favor, as your value is enhanced by that knowledge.

How Much Does It Pay?

The average income for a full-time website designer is about $70,000.

Clerical/Administrative Jobs

If you have the patience, determination, and focus to sit at a computer and complete mundane routine tasks, these jobs may be perfect for you.

Data Entry

Data entry is one of the easiest work-at-home jobs to start. You do not need any special training, education, or experience.

Data entry is accessible to just about anyone who has basic computer and typing skills, good communication, and strong organization skills. All you need is a computer with high-speed internet and access to common data processing programs.

That’s the good news.

How Much Does It Pay?

The bad news is that data entry does not pay incredibly well.

Competition for data entry jobs with reputable companies is tough and because so many people would like to do it, you have to be careful of scammers.

Transcriptionist

Sometimes, individuals need audio files typed into a document.

For example, researchers who have recorded interviews with research participants need the interviews transcribed so they can analyze them. Doctors in health care settings dictate their case notes into an audio file, but typically need a typed record.

If you are known for your attention to detail, you might enjoy doing transcription. You would need transcription software, a good headset, and a couple of other items to get started.

How Much Does It Pay?

As a transcriptionist, you can make between $8 and $20 if you work for a transcribing company; however, if you transcribe on a freelance basis, you can make more than that.

Freelancers commonly use transcription software to make their jobs easier and to take on more clients.

Writing Jobs

If you absolutely love writing creatively or content based on research, there are plenty of businesses out there willing to pay you for your work.

Freelance Writing

Do you enjoy writing? If so, you can make a full-time income working from home as a freelance writer.

As a freelance writer, you can advertise your services and secure long-term clients on your own or you can look for short-term or one-time freelance writing opportunities.

There are thousands of freelance writing gigs that are listed online that you can do from your living room or anywhere else that you can take your laptop.

How Much Does It Pay?

Some freelance writers earn a six-figure salary, but it takes time to build up a client base and to learn how to charge the appropriate rates for your work.

Blogging

Did you know you can make money blogging? You can definitely make extra money by starting up your own blog and pouring your heart and soul into it.

Blogging is one of the most flexible work from home jobs that you can do. To make money from blogging, you need to select a niche – an area in which people are interested.

Blogs related to fashion, travel, health and fitness, weight loss, sports, and lifestyle are the most popular. One challenge related to blogging is that it is a LOT of work in the beginning. You must write all the content and you have to create posts frequently.

Another challenge is that it takes a while to make money from blogging, as you have to build up a consistent audience. Blogs typically generate money through ads and affiliate marketing and the bigger your audience, the more money you can potentially make.

How Much Does It Pay?

Some people have made over a million dollars blogging, but a realistic range is from a couple of hundred dollars a month in the first year to a couple of thousand dollars a month after that, assuming your audience continues to grow.

There are several companies that can help you start your own blog for only a few bucks a month.

If you’re interested in blogging, check out Blue Host [](https://arrestyourdebt.com/bluehost) to start for less than $6 dollars a month.

Proofreader

If misspelled words drive you crazy, you may be at the beginning of a freelance proofreading career.

A proofreader’s daily work involves carefully reviewing documents for mistakes in spelling, grammar, mechanics, and sentence structure. Most proofreaders are freelancers, which allows them to set their own rates, determine how much they want to work, and with which clients they want to work.

How Much Does It Pay?

A proofreader can typically earn $12-$30 per hour, but it takes a while to build up a clientele.

Teaching Jobs

I am a teacher at heart which is why this is one of my favorite hobbies. I combined a blog and teaching for Arrest Your Debt and it has given me so many opportunities to educate and help others.

Teach English

There are many online companies that hire individuals to teach English to people in other countries.

If you have a bachelor’s degree and a bit of teaching or tutoring experience, you can meet virtually with kids in other countries to work with them on conversational English.

Most often, the company for whom you work will provide curriculum guidelines for you. One thing to keep in mind is the time difference.

For example, the time difference between Eastern Standard time zones and Beijing is 13 hours. So, depending on where your students are, you might be up late or up early.

How Much Does It Pay?

As an English tutor, you can make up to $25 per hour.

VIPKID is a great place to sign up if you’re interested in teaching online classes from the comfort of your own home.

Tutor

As long as there have been students, there have been tutors.

If you have expertise in a specific subject and have an interest in sharing that knowledge, tutoring might be a nice option for you. Tutoring has traditionally taken place in a face-to-face format. For instance, a tutor meets with the student at a public library and tutors for an hour.

Because technology has advanced so much in recent years, students of all ages can receive tutoring virtually, which makes it extremely convenient for both the student and tutor.

How Much Does It Pay?

If you choose to work for a tutoring company, you may start around $12 per hour and move up with more experience. However, if you do tutoring on your own, you can set your own rates.

Depending on the academic subject and the level, tutors can make up to $50 or more per hour.

VIPKID can also set you up to start helping people get back on track in your subject specialization.

Creative Jobs

Many traditional jobs require you to work within the lines and discourage creativity. Luckily, there are many creative jobs out there where you can not only earn a living, but also create on a daily basis!

Sell Crafts

If you are crafty, you might think about selling your creations as a way to earn extra money. You can open a shop on Etsy or Shopify, for example, and sell your vintage or handmade items.

Do you make jewelry?

Have you collected vintage items from estate sales?

Do you create pieces of fine art?

All of these can be sold through a virtual marketplace. You might also consider selling crafts during craft fairs or festivals.

Flip Flea Market Finds

Do you enjoy frequenting garage sales and flea markets? Are you able to find unique items for a bargain?

If so, you could turn that hobby into a home-based business by “flipping” the cool items that you find by reselling them for a profit.

Sites like Ebay and Facebook Marketplace make it easy for you to post your finds.

Sell Photos Online

If you enjoy photography, you can earn extra money by selling your photographs online.

Stock photography is used for all kinds of media – websites, newsletters, online courses, print publications, etc. Upload photos to service providers like Shutterstock, Adobe Stock, and Getty Images.

How Much Does It Pay?

When someone purchases your photo, you earn a commission. Commissions vary widely from 25 cents to a few dollars per download. Some photos have commissions that are higher.

The key is to upload many high-quality images.

Typically, someone who is just starting to sell stock photos may earn a couple of hundred dollars a month. Over time, that can increase to a full-time income.

You can sell your photographs to places like Deposit Photos. I currently buy most of my photos from Deposit Photos because they are of high quality and add essential media to my website.

Other

If none of the traditional or structured jobs appeal to you, there are many other unconventional jobs out there where you can make a decent income.

Pet Sitting/Dog Walking

For many people, their pets are important members of the family. As a result, they want the very best care for them. This is how you can cash in!

Pet sitters often provide daily care for pets in the owner’s home, often when the owners are on vacation. Pet sitters usually offer dog walking services as well.

Knowledge of animals and the ability to establish a rapport with them is important and knowledge of first aid and animal CPR would make a pet sitter more marketable and valuable.

How Much Does It Pay?

A pet sitter’s salary depends on the area in which they live and the number of clients they serve.

Typically, an animal caretaker can charge more than $10 an hour per animal.

Websites like Rover are a great place to find people who are willing to pay for pet walking and other pet services.

Consulting/Coaching

Consulting and coaching are very popular jobs for individuals who want to work from home. All it takes is for you to have knowledge of a particular topic or process.

Suppose that you have done marketing in a 9-5 position and you want to now work from home. Set up a consulting website and make contact with local businesses to let them know that you are doing freelance marketing.

How Much Does It Pay?

Consultants and coaches can easily make what people in similar positions in a “regular job” make; most consultants and coaches make far more.

You can set your own rates based on your knowledge and experience and make a six-figure salary from home.

Teach Music Lessons

When you were young and taking piano lessons, did you ever ask your parents, “When will I ever use this?” Well, now is your opportunity.

If you have musical knowledge, you can make a nice income teaching music lessons, all while making your own schedule.

How Much Does It Pay?

Piano teachers (or guitar teachers or violin teachers) can make between $15 and $40 for a half-hour private lesson. You could increase your earnings by teaching pairs or small groups of students at one time, for a slightly reduced rate.

Cleaning Business

A home-based cleaning business can be started by anyone who is willing to roll up their sleeves and do some work.

There are two types of clients that cleaning businesses serve – commercial and residential.

Commercial businesses usually hire larger janitorial or cleaning companies, but residential cleaning is a booming market.

If you do all of the cleanings to start with, you can build your business before you hire anyone to help you (that you will have to pay!). All you need is a healthy collection of cleaning supplies and your first client.

Encourage your first client to share your contact information with others and offer them a discount if they refer someone. You might also advertise your cleaning business on Facebook or Twitter.

How Much Does It Pay?

The average hourly rate for residential cleaning services is $25-$50 per hour. However, it could be more than that, depending on the size of the house and the type of cleaning that the client wants (a regular cleaning or a thorough, deep cleaning).

Work From Home Job Scams

Making a job change from a “regular” job to a stay at home job or starting your own business or side hustle can be emotional and stressful. Because of this, stay at home job scammers have learned to prey on people’s’ emotions.

There are several ways to protect yourself from work-at-home job scams.

First, if a work from home job opportunity sounds too good to be true, it probably is.

Use common sense when you evaluate stay at home job advertisements. Scammers can be clever. They may offer “great opportunities” that require you to quickly do something.

Think about how that “great opportunity” would benefit the company. What’s in it for them?

Keep a level head. Scammers may use words that are charged with emotion to help sway you and convince you to do things like providing personal information.

If someone says that you “deserve” something or that you don’t want to be “left behind,” proceed with caution.

Sometimes, scammers will offer you a job lead for the low, low price of … whatever. Legitimate employers do not charge employees to work for them.

If you receive a work-from-home job offer email that asks you to pay anything, delete it and move on.

This article originally appeared on Arrest Your Debt.

Buying a house is a major life milestone, and it’s something to carefully consider before making your final decision. Given that a down payment plus a mortgage will be a significant hit to most people’s finances, rent to own options are an attractive prospect for many would-be home buyers.

That said, the rent to own process likely has more caveats than you think, and it’s important to do your research, and do it thoroughly, before committing to a rent to own home.

In this guide, we’ll cover all you need to know.

What is a Rent to Own Home Agreement (or Rent to Own Program)?

For many people who want to buy a home, a rent to own option might be tempting. After all, your rent just goes toward the home price until you buy, right?

This is how many people see the process, and while they have the general idea right, there’s a lot more to it.

When you rent to own, you first pay a one-time nonrefundable option fee to the seller (this is discussed in more detail below).

Then, you and the seller negotiate to set a purchase date for the home. This is the date you’ll either be obligated to purchase the home or offered the option to purchase it, depending on your specific contract.

Usually, a sale date is no more than a few years after the start of the agreement. However, you and the seller may want to create a longer lease agreement.

Defining Rent Credit

This is where it gets a little confusing. The name, “rent to own” implies that rent payments go toward the home’s purchase price. However, that isn’t necessarily true.

On top of the regular rent the seller could charge for a tenant who was just leasing the home, each monthly payment will have a “rent credit” added.

The amount of the regular rent will go toward the seller’s current mortgage on the home, while your rent credit goes toward your down payment or total home purchase.

For example, let’s say the seller could rent a house for $1,000 per month (without a rent to own agreement). You and the seller might agree on a rent credit of $500. This way, your monthly payment is $1,500, with $1,000 going to the seller’s mortgage and $500 going toward a down payment, closing costs, or your home’s purchase price.

There’s one more key thing to know about rent to own contracts. While “rent to own” is a commonly used blanket term, it covers two different types of contracts: lease-option and lease-purchase.

Lease-Option Contracts

As the name suggests, a lease option rent to own contract simply gives you the option to buy the home at the end of the lease contract. You are in no way obligated to buy, although you’ll likely forfeit your option fee.

Lease-Purchase Contracts

On the other hand, a lease-purchase contract is significantly more binding. These contracts require you to purchase the home at the end of the lease term. If you don’t purchase the home, you’ll forfeit the option money you paid at the start of the contract, and it’s likely you’ll face legal action, too.

Unfortunately, this requirement is usually upheld even if you can’t afford to pay, or if you can’t get approved for a mortgage.

Because these contracts can be complicated, and because unethical sellers might deliberately draw your attention away from some clauses of the contract, it’s usually wise to hire a real estate attorney to review any rent to own contract before you sign.

Do this even if you have a good feeling about the sale. A real estate lawyer can spot potential problems in the contract and they also will be able to thoroughly explain the contract to you.

While hiring an attorney will cost you money, an attorney’s fee is negligible compared to the eventual costs of getting locked into a contract you can’t afford to uphold.

How Long is a Rent to Own Contract?

The length of a rent to own contract depends entirely on your agreement with the seller. Most of these contracts last one to three years.

However, keep in mind that the goal of a rent to own contract is to give you time to get into a good enough financial place to be able to buy the home.

If you’re currently in debt or working on improving credit, you may want to take more time to build savings before getting into one of these agreements.

Alternatively, you may be able to negotiate a longer lease term. This will give you more time to save, and you’ll also have more rent credit payments to go toward your purchase.

Before you enter into a rent to own contract, it’s extremely important to choose a term that will give you enough time. Keep in mind, rental payments for these contracts are higher than monthly payments on a regular lease.

If you don’t have enough saved to pay for the house at the end of the lease, you likely will need a mortgage. If you think you’ll just barely be able to make payments, you could potentially end the lease in a worse financial place.

The bottom line is to plan ahead and negotiate with the seller in order to choose a lease term that’s comfortable for you.

Do You Need a Down Payment for Rent to Own?

The short answer is that you don’t need a down payment at the beginning of a rent to own contract.

However, in order to proceed with making the agreement, the seller needs some form of monetary commitment.

Option Fee

This monetary commitment is known as an option fee. It distinguishes you from a regular renter in that it gives you the option to purchase the home once your lease is done.

If you do purchase the home, this fee goes toward the home’s purchase price. If you decide not to purchase, you forfeit this fee.

If you have a lease-option contract, the fee simply gives you the option to buy the home.

If it’s a lease-purchase contract, you’ll be legally obligated to purchase the home once your lease ends.

An option fee is almost always significantly less than a down payment on a home. Generally speaking, the fee is between 3% and 5% of the home’s total value.

In contrast, down payments on homes can be anywhere from 3.5% to 20% of the total purchase price.

However, this fee is often negotiable. If a posted option fee is too high for you, it may be worth talking to the seller to see if you can re-negotiate.

However, when the lease agreement is up and you’re obligated to purchase the home, you will need to come up with a down payment. Since your option fee and rent credits can be put toward your down payment, purchase price, or closing costs, a rent to own agreement effectively helps you save for your down payment during your lease.

Rent to Own With Bad Credit

One of the draws of renting to own is that it does let those with bad credit start working towards buying a home, even if they don’t qualify for a bank-issued mortgage.

However, just as loans issued to people with bad credit often have high-interest rates due to risk, a rent to own seller may inflate fees. This is because rent to own sellers often anticipate buyers being unable to make payments.

Since losing a rent to own tenant means the seller will need to find another, charging more (whether it’s for monthly rent or for the house as a whole) helps to offset that risk.

How Much Does it Cost to Rent to Own?

As a general rule, renting to own costs more over time than buying a house with a mortgage. While we cover the costs in greater detail elsewhere in this article, it’s always wise to keep in mind all of the different costs you’ll incur:

Initial option fee

Monthly rent

Monthly rent credit

Costs for home maintenance and repairs (usually)

The remainder of home costs after lease (usually involves taking out a mortgage)

Down payment (after lease term)

Closing costs

Because these costs can quickly add up and become unmanageable, it’s wise to make sure you can afford them all before you commit to a rent to own contract.

Backing Out of a Rent to Own Agreement as a Seller

You already know that, depending on the type of contract you have, there may be financial and/or legal consequences if you back out of a rent to own agreement.

But is a seller able to back out?

In virtually all cases, the answer is no. Unless your contract has an explicit clause permitting it (and it would be unwise to sign a contract with a clause like this), a seller is locked into the contract until your lease is up.

This offers you significant protection. Before you sign on, you and the seller will need to choose a purchase price for the home. This locks in the price, regardless of market fluctuation.

Again, some clauses may have special stipulations covering what to do if the home’s value changes significantly, but most will settle on a purchase price.

In a rent to own contract, you have already paid for the option to purchase at the end of the lease. This means that the seller can’t cancel your contract and sell the home, even if someone with a higher offer comes along.

Of course, if you forfeit your right to purchase, the seller can then put the home back on the market.

Breaking a Rent to Own Contract

The answer to this question depends on your contract type.

For simplicity, we’ll divide this answer between the two main contract types: lease-option and lease-purchase.

Lease-Option

As mentioned above, a lease-option rent to own contract means you have the right to purchase the home after your lease has ended (and that the seller can’t sell the home out from under you during the terms of your lease).

In this situation, you have the ability to back out. One unique facet of rent to own contracts is that, when there’s no contractual obligation to purchase, you don’t need to continue renting through the end of the lease.

However, if you do this, you forfeit your option fee as well as all rent credits you’ve accumulated. Since this option results in a significant loss of money for you as a buyer, it’s usually unwise to do this unless you have a truly compelling reason.

Lease-Purchase

The binding nature of a lease-purchase contract means that you can’t back out of your agreement.

Even if you can’t afford to pay the remainder of the home’s purchase price at the end of the lease, you’ll be legally obligated to. If you refuse, or attempt to otherwise back out of the agreement, the seller can sue you for the remainder of money owed.

Barring any extreme and extenuating circumstances, the seller will win the lawsuit and you’ll be court-ordered to pay. Thus, unless you are absolutely certain you’ll be able to buy the house at the end of the lease, a lease-purchase agreement is risky.

Can You Evict a Rent to Own Tenant?

A common misconception about rent to own agreements is that you can’t be evicted while you’re a tenant. Unfortunately, the truth is that the seller does have the option to evict you. Usually, eviction can only happen if you fail to make the monthly payments.

However, before proceeding with eviction, the seller legally needs to give you a three-day notice to pay the rent you owe. If you fail to pay in that time window, the seller may then legally proceed to evict you.

Exact eviction regulations and procedures vary widely by state, so check with your local jurisdiction to see how local eviction proceedings are carried out.

If you find yourself risking eviction, it’s often worthwhile to reach out to your seller and try to work out a compromise. Remember that eviction will also cost the seller money and time.

And of course, if you are evicted, the seller will then be faced with finding another rent to own tenant. If you’re successfully evicted, your option fee (and likely your rent credits) will not be returned.

Thus, it’s usually in the best interest of both you and the seller to come to a mutually agreeable solution.

Property Taxes on Rent to Own Homes

While we’ve already covered how paying for the seller’s mortgage, the down payment, the remainder of the home price, and the closing costs works, there’s another key consideration to be aware of.

Who pays the property tax?

After all, a home in a rent to own contract is in a sort of ownership limbo; there’s a possibility you as the tenant will ultimately purchase it, but there’s a chance that ownership will remain with the seller.

However, since the seller is still the official property owner during your rent to own lease, he or she is responsible for paying property taxes.

Remember that your option simply gives you the option of purchasing the home. From the seller’s point of view, the sale of the home isn’t completely guaranteed.

Also, if the home is in a neighborhood with a Home Owner’s Association (HOA), the seller is responsible for these fees until the conclusion of the lease as well.

Once the sale is complete and ownership is legally transferred, you will be the legal owner and thus responsible for all property taxes and any HOA fees that apply.

Are Rent to Own Homes More Expensive?

If you’ve ever applied for credit cards or loans with a low credit score, you know that many services aimed at those with lower income end up being more expensive in the long term.

Since it’s often difficult for lower-income people to buy a house right away with a down payment and mortgage, you may be wondering if the overall price of rent to own homes is more expensive.

Somewhat predictably, renting to own is generally more expensive than buying a home in the traditional way.

However, if homeownership is important to you and you can’t qualify for a mortgage, renting to own is less expensive in the long run than renting with no option to purchase. Plus, even if you qualify for a mortgage with a less than excellent credit score, it’s possible that the interest rate you receive will cause you to pay more in the long run.

Perhaps worst of all, if you enter into a rent to own contract and then back out, the contrast will cost you both the rent credits paid toward your home each month and the option fee you paid at the beginning of the contract.

This loss of savings can sometimes take a significant amount of time to build back up.

When Renting to Own a House, Who is Responsible for the Repairs?

You already know that a rent to own agreement differs from your typical lease. In a traditional renting arrangement, the landlord covers all repairs through the duration of your lease term.

In most cases, you as the tenant (and future owner) need to cover all repairs the home needs, even before you complete the official sale on the agreed-upon future closing date.

Depending on the condition of the home at the beginning of your contract, this clause has the potential to cost you a significant amount of money. It’s often wise to have the home inspected before signing a rent to own contract, as a knowledgeable inspector can identify any existing issues that may lead to an expensive repair down the lines.

If you aren’t sure where to find a reputable inspector, try asking a local real estate agent; many can recommend dependable contractors who can conduct a thorough home inspection.

Of course, some contracts stipulate that the seller needs to cover all repairs. But even in these cases, you’ll likely be responsible for all home maintenance. This includes mowing the lawn, cleaning the gutters, and other routine tasks.

If you haven’t owned a home before, performing these tasks will help you get used to what owning a home entails.

The Advantages of Rent to Own

Renting to own is not without risks. However, it does offer many potential advantages for tenants who enter a contract.

It Helps Those With Poor Credit Achieve Home Ownership

For many people with poor credit (and even those whose credit is good but not excellent), buying a home with a mortgage and down payment is out of reach.

If your credit isn’t great, these contracts give you a chance to build credit history through paying rent each month. As you do this and build equity in the property, your credit score will improve, and it also gives you more time to save money towards the total cost of the home.

Then, if you need to take out a mortgage to cover the remainder of the purchase price, your credit score will be higher and your approval odds will increase.

It Can Protect You Against Market Fluctuations

By the time your lease is up and you have the option to purchase, the fair market value of the home may have gone up. However, in the vast majority of rent to own contracts, the buyer and seller reach an agreed-upon final sale price for the home.

This way, if the home’s current market value at the time of closing is higher, you’ll be getting an excellent deal on the property. That said, be sure you fully understand your contract at the time of signing.

Some agreements include clauses that allow for fluctuation of the home price based on real estate market value at the time your lease is up.

It Lets You Get a Feel for the Property

If you’re like many renters, you may have signed a lease on an apartment for a year, only to find that there’s something you hate about it.

Maybe it’s too far away from restaurants and concert venues. Or maybe it feels too cramped to be a comfortable living space. Regardless, you know you’ll be let out of your lease within a year.

However, if you buy a home and feel the same way, it’s a lot more complicated than just waiting for a lease to expire. You’ll need to sell the house before moving, and if the sale takes awhile, you’ll be stuck in the meantime.

When you rent to own, you essentially have a trial of the property before committing. You’ll be able to see if you feel at home in the space, as well as explore surroundings and see if you live in a community where you would feel comfortable staying.

While it’s true that you’ll forfeit your option fee and rent credits if you choose to leave, this is often better than going through the challenges of selling a home.

Why a Seller Would Rent to Own

Now you know the potential benefits you stand to gain by entering into a rent to own contract. However, sellers don’t usually operate on altruism alone. Rent to own contracts have some benefits for the seller, too.

Additional Income Opportunities

Many sellers are interested in saving up money, too. Since your base rent payments go to the seller, this enables them to put money away before finally selling their home. This is also helpful to sellers who may have already purchased a new home and are juggling two mortgages.

Since your rent goes toward any existing mortgage on the home you’re renting to own, this enables the seller to have a little more financial security.

Reaching a Variety of Potential Buyers

As we mentioned above, many people with subpar credit end up unable to qualify for mortgages from banks. Since selling a home is challenging in many areas, offering a home as a rent to own purchase means the seller has more potential buyers who are willing and able to purchase the home.

Higher Sales Prices

In some cases, a seller stands to earn more money by selling a home as a rent to own purchase. Given that buyers have more time to save money as they rent, they may be more willing to purchase a home with a higher total cost.

Plus, while it’s inconvenient to have a buyer exit a rent to own agreement, the seller still gets to keep the option fee and any rent credits.

When your lease expires based on the closing date you and the seller agreed upon at the beginning of the contract, the seller knows they’ll either receive the rest of the home’s purchase price or get to keep the money you’ve already invested.

Do Banks Do Rent to Own Homes?

The short answer here is no. Rent to own contracts are generally complex, and part of their appeal is that they allow the seller to pay the mortgage and other costs more comfortably.

Since banks make plenty of money already through offering mortgages (which are also usually simpler contracts), it makes little sense for them to become involved in rent to own sales.

However, if you’re very interested in a foreclosed property now owned by a bank, you don’t need to give up hope just yet. If you’re motivated and willing to get creative when it comes to financing, getting in touch with an investor is one way to achieve a rent to own agreement on a foreclosed home of your dreams.

Some investors may be able to buy the home outright and then draw up a rent to own contract with you. Be mindful that an investment is designed to make money, and your rates with an investor may be higher than they would be with an existing homeowner who’s just trying to sell.

The HOPE Program

If you’re a disadvantaged or otherwise low-income person looking to buy a home, it’s important to know that there are alternatives to rent to own programs that still offer some degree of support.

One of these is the HOPE program.

HOPE stands for “Homeownership and Opportunities for People Everywhere,” and it’s designed to help those who are lower-income, have poor credit, or otherwise face challenges when looking to purchase a home.

This program was launched by the Department of Housing and Urban Development.

However, the HOPE program doesn’t directly offer assistance to individuals. State or regional authorities apply for HOPE grants directly.

These grants are commonly used to help individuals in a given area with down payments or mortgage payments. They also can be used for education programs for would-be homeowners.

If you’re considering purchasing a home through a rent to own program, it may be worthwhile to explore whether the area where you want to buy a home has a HOPE program. Even if they don’t, you may have other options.

Many areas, especially those that are being revitalized, have programs to incentivize homebuyers. Many of these programs include courses to help prepare you for owning a home, and they may offer assistance with your purchase.

However, some of these programs require you to continue living in the home for a decade or more. If you aren’t intending to move soon after your purchase, these programs offer great cost savings.

But if you’re someone who moves frequently, this may not be the right choice for you.

Is It a Good Idea to Do Rent to Own?

The answer to this question is a complex one. As we’ve seen, renting to own offers several advantages. It allows you more time to save for a down payment and other home costs, it opens up the possibility of homeownership if you don’t qualify for a mortgage, and it lets you spend some time actually living in a home before committing to ownership (unless you have a lease-purchase contract).

However, renting to own carries several risks for buyers, including potential eviction if you can’t make payments. Even though having a set purchase price protects you if the home’s value goes up, it can be disappointing if the home’s market value depreciates significantly during your lease term.

Thus, while renting to own may be a great choice for some, it ends up being a bad idea for many.

High Monthly Payments

Part of the idea of these programs is to allow you to save money. But when you’re low-income or credit-challenged, paying the additional rent credit on top of your monthly lease payment is often the last thing you need.

And if your employment situation is unstable, this adds even more risk.

If you lose your job and find yourself unable to make monthly payments, you risk losing the hard-earned money you’ve already put towards rent credits and option fees.

Since this money goes towards a final home purchase, the seller keeps it in many circumstances and this will set you back when it comes time to purchase another home down the line.

Even worse, if you’re evicted, this can make it very difficult to rent or sign a rent to own contract in the future.

Potential Problems With Final Purchases

Many potential homeowners sign rent to own agreements fully believing that when it comes time to buy, they’ll have improved credit scores and enough savings to easily qualify for a mortgage.

Sadly, this is not always the case.

If you incur medical or other debt during your lease term, you may still be unable to qualify for a mortgage. At this point, your best case scenario is forfeiting rent credits paid toward the home every month.

It also involves forfeiting option fees and walking away empty-handed (and needing a new place to live).

At worst, you’ll face these consequences plus potential legal action from the seller, and you may be court-ordered to pay for the rest of the home, too. While you can walk away from many of these contracts, exiting one always has a financial consequence.

Wrapping It All Up

If you’re determined to rent a home to own, this isn’t to say it’s something you should never do. However, before signing a contract, it’s wise to talk to a financial advisor.

He or she will likely have seen both the success stories and the catastrophic failures of the rent to own market.

An adviser with experience in this area will be able to assess your situation and offer you an honest opinion on whether a rent to own endeavor suits your needs.

Additionally, because current mortgage rates are constantly changing, an advisor may even advise you to wait two or three years, build up your credit history and employment history, and then apply for a more traditional mortgage.

If you decide renting to own isn’t for you, remember your other options. The HOPE program and other programs are designed to help people who are looking for a home but need financial assistance.

Many of these programs have more affordable rates and more transparent terms. You’ll also be working with a standardized program and not with a seller who may prioritize his or her needs to your detriment.

If you’re interested in buying a home but need help exploring options, you also may want to consult with a top real estate agent or other knowledgeable professional in your area. Even if an agent works for a private company, they’re likely to know about the real estate market as a whole.

At the very least, they can help point you in the right direction.

The home buying process is both a commitment and an adventure. Remember that renting to own and going through a traditional bank-issued mortgage are not the only ways to go.

When you take your time, do your research, and keep options open, you’ll be more likely to find a home buying option that suits your needs.

This article originally appeared on Arrest Your Debt.

Finances are a personal topic that very few want to really talk about. Many hold their finances as much in secret as their intimate relationships. However, learning how to invest your money can make a big difference in your financial future.

In today’s article, we’re going to take a look at making your first investments that every beginner should be doing. We’ll go over each investment step-by-step to ensure that you walk away from reading this with new-found knowledge and viable approaches to get you where you want to go financially.

Start With Your Emergency Savings

You’ve probably heard the term ‘emergency fund‘ so much that you may want to skip right over this section. Please don’t because it’s very important to your overall financial well-being.

An emergency savings is the first investment you should consider, no matter what your financial position is.

Let’s face it, life is hard. Having an emergency savings account that is there for you when life throws you a curve ball can do wonders for your mental and financial well-being.

Before you start investing in other avenues, be sure you are investing in yourself with an emergency fund.

Why Do You Need An Emergency Savings?

Think about it like this for a minute. If your car breaks down and you end up needing $200 in repairs to get it back on the road, you only have a couple of options. You can use your emergency savings fund and get your car back on the road.

Or, you can put it on your credit card and be left spending the next few months or even a year paying back the $200 plus interest fees. It is a no brainer why having an emergency fund is ideal for any individual, regardless of their age.

Making your emergency savings your beginning investment is a solid plan that makes sense based on the impact debt has on your life.

How To Set It Up Properly

When first setting up this emergency savings account, there are a couple of things you should consider. You’ll want easy access to the money since you’ll be using it for an emergency situation.

However, you don’t want it to be too easy where you end up transferring the money over into your checking account for impulsive spending. An online savings account where you can easily transfer money from your checking account over to your savings account is ideal.

How Much Should Be In My Emergency Fund?

Before you start transferring money to your emergency savings, decide on how much is right for you. This is going to change depending on the individual and their living status.

For a young adult just starting out, $500 is a good place to start. For a married couple getting ready to grow their family, starting with $2,000 may be perfect. Either way, pick a number that is feasible and realistic for you.

How Do I Quickly Fund The Account?

First, decide how you’re going to fund the account. You may commit to a set number from each paycheck or each month. You may have a lump sum of money from a tax return or birthday that you want to just put into the account to fund it.

Different strategies work for different people. You know yourself the best so set up a funding method that works best for you and don’t be afraid to change it if you find yourself struggling to commit to the process.

How Do I Start My First Investment?

Once you get your emergency savings account funded to the number you decided on, it’s time to think about investing. Simple right?

Once you actually sit down to figure out how to invest, you may end up with a blank stare like I had when I first started. Fortunately, investing can be done with many different vehicles.

A few of these include CDS, stocks, and real estate investing.

It’s important to realize that there is no one right vehicle for investing. People have made fortunes with all different types of investment accounts. Some of the richest people on the planet have their money spread out through many different investment plans.

You should be thinking about understanding the various vehicles out there and how each one can potentially benefit you.

You Must Decide On A Funding Strategy

You want to invest, but where is the money coming from? Be sure you know how you’re going to come up with the extra money to invest.

Hopefully, you’ve developed a funding strategy that worked for you when you built up your emergency fund. It’s vital that you put together a strategy that works for you since you’ll be saving more money to put into your investments.

While you may be able to invest with as little as $5 or $10, most investments require $100s to $1,000s to get started.

When you have a strategy that works for you, you’ll be better prepared to save money for not only the initial investment but also retirement. It’s a good rule of thumb to save up anywhere from $500 to $1,000 to get started in investing.

This way, you can open up your options on which investment plan you would like to utilize when making your first investment.

What Should I Invest $1,000 In?

Assuming you have a lump sum or a stream of money coming in, it’s time to start investing. However, where should you invest your startup money?

The answer is it really depends on what you personally want to do.

Let’s take a look at some basic first investments so you can decide where you want to start your investing career to obtain financial freedom.

Stocks

When the concept of investing in the stock market is introduced, most people are thinking about stocks. These individual stocks are essentially small pieces of ownership in a company.

Stocks on the public market include companies like Apple and Walmart. You essentially buy a piece of the company and can reap a reward when the value of the stock increases.

To be painfully clear, as a beginning investor – you should not buy individual stocks. Individual stocks are much riskier than index funds.

Bonds

The easiest way to describe a bond is to describe it as a form of debt. When you invest in a bond, the money is given to a borrower and their repayment of that money is given to you, plus interest.

Bonds usually don’t have a large return on investment and range from about two to three percent per year. However, they’re considered a very safe investment.

You will only lose your money if the underlying entity that is borrowing your money defaults.

Mutual Funds

Mutual funds are a group of assets that you essentially purchase with other investors. Each fund has varying investments that help to diversify the overall investment.

Because you’ll be pulling your investment funds together with other investors, you’ll have access to more diverse assets. However, do realize that mutual funds tend to be managed by a fund manager.

This can lead to high account maintenance costs and hidden fees.

Exchange-Traded Funds (ETFs)

ETFs are very similar to mutual funds. You’ll be pulling your investment money together with other investors to purchase an array of assets. The only difference with this type of investment vehicle is that they’re not actively managed.

This means there are no high maintenance costs to pay a fund manager.

Real Estate Investments

Real estate investments are very popular area of investing. For those just starting out with their first investments, opting for a REIT or real estate investment trust can be a great first step.

With this type of trust, you’re essentially pooling your money with other individuals to invest in the operation, ownership, or financing of an income-producing property.

With this type of investment, you can own a piece of real estate and enjoy dividend-based income from the property.

Employer-Sponsored Retirement Plan

We’ve all been told that we should invest in a retirement account so we have money to live on once we retire. Making investments through your retirement plan is probably the option to create that retirement account.

Most employer-sponsored retirement plans allow you to invest in either a Roth IRA or a 401k. A Roth IRA uses after-tax money while a 401k uses pre-tax money to fund the accounts.

With an employer retirement plan, you essentially set aside a set percentage or flat amount from your paycheck for your retirement. Some employer-sponsored retirement plans will provide contributions that match your investment up to a certain number.

This way, your employer is also helping to fund your retirement account. Making investments through your retirement plan is usually one of the most tax advantaged ways to invest.

What Should I Invest In To Make Money?

You should have an introductory understanding of the investment vehicles that we went over above. Now, determine which ones you’ll want to employ.

The truth is that your investment strategy is going to highly depend on what you would like to achieve. Do you want to have a large retirement account so that you can travel the world once you retire?

Do you want to make money in the next 5 to 10 years to buy a newly constructed home of your dreams?

Determine What Your Goals Are

Determining your financial goals is the first step in deciding on the investing strategy you want to participate in. While we all would love to be millionaires overnight, that’s simply not going to happen to the majority of us.

Rather, you must be realistic with what your goals are so that you can actively invest in the right types of vehicles to get yourself there.

Decide On Your Level Of Risk

To put it simply, investing involves risk. The level of risk your money is exposed to depends on your asset allocation and if you intend to invest long term or only for a short period of time.

On average, the least risky investments will provide you with the lowest returns.

The riskiest investments have the potential to provide you with a fast and higher rate of return.

However, the more risk, the more likely you are to lose your investment money. So, you need to determine just how much risk you really want to take on.

Become A Student And Develop Into A Master Investor

When you begin investing, it’s best to stick to one or two investment plans. This way, you can become familiar with them.

As you get more familiar with these initial investment vehicles, you may want to branch out to other types. Keep it simple to start out so that you can master each investment vehicle with ease.

Throwing money at investments you don’t understand is a great way to ensure that you don’t get any of your hard-earned money back.

Can You Get Rich By Just Investing?

The answer to this question really depends on your definition of rich.

You can earn a ton of money with investments if you choose the right ones at the right moment. As you learned above, different first investments will provide you with varying profit levels.

Less Risky Investments With Modest Gains

Your investments, such as bonds, will provide you with a steady rate of return of about two to three percent per year with minimal risk.

If you’re interested in gaining wealth over your working life, then you may want to actively invest your money into varying bonds. This will provide you with a known return on each investment as you’ll be given the return percentage you can expect to receive before you purchase the bond.

However, realize that a two to three percent gain per year on an extra $1,000 is not going to make you rich overnight.

Risky Investments With Potential For Massive Gains

If you want to take on some more risk, then you can opt for investment vehicles that can provide much higher rates of return.

Individual stocks tend to be one of the more volatile investment forms that can allow owners to profit tremendously when the stock price rises. For example, let’s say you invested in Apple before they introduced the Apple Watch. You bought 100 shares at $10 each.

As soon as the Apple Watch was released, their stock skyrocketed to $100 each. Overnight, you essentially made $90 per stock.

This equivalates to $9,000 in profits from one stock. As you can see, the potential for gains is high with individual companies. However, realize that this isn’t always the case. Apple’s stock actually went down after they introduced the iPod.

Choosing what company to invest in to gain high returns is a talent within itself.

How Do Beginners Invest In Stocks With Little Money?

You don’t need to have thousands of dollars to begin investing. You can actually begin with $5 to $10, depending on where you go. There are many discount brokerage firms online that you can create an account with to invest.

These types of accounts simply require you to fund your investment account, search for the stock you want to invest in, and then purchase it, all in real-time.

A few examples of these online brokers include TD Ameritrade, Robinhood, and Fidelity Investments.

If you’re not really sure what stocks you should be investing in, then a robo advisor can be a good tool to use.

Also referred to as a robo investor, this type of strategy has a behind the scenes financial advisor or software that makes purchasing decisions for you.

These decisions are based on your criteria such as your risk tolerant level and your maximum limit per investment. These can be a way to slowly wade into the investing world where you can set limitations, but let a more knowledgeable advisor take over.

Can You Lose All Your Money In Stocks?

The short answer to this question is that you certainly can lose most of it. It really comes down to the specific details of your investment strategy.

For simplicity, let’s say your first investment is $1,000 in stock XYZ. You buy 100 shares at $10 apiece. Overnight, the company gets bad press and the stock plummets to $1 per share.

Essentially, you just lost $9 per share or $900 dollars of your investment.

Until you’re done paying the fee to sell the stock at the price point of $1, you’re likely not going to have any money left over. Therefore, you can lose pretty much all of your money in the stock market.

While there are notable volatile fluctuations in the stock market, many can hedge these risks by diversifying their investment portfolio. This way, if you lose money with stock XYZ, you still have companies ABC, EFG, and HIJ.

How Can I Double My Money?

Doubling your money isn’t too difficult to do. Rather, it simply comes down to picking the right investments and determining how long it will take you to double it. There is a simple rule of 72 that you can follow when determining how long it will take you to double your investments.

The Rule Of 72

To figure out how many years it will take to double your investments, you’ll need to know the average annual interest rate of what you’re investing in. This is easier to determine for bonds and real estate.

For stocks, you’ll need to look at the average fluctuations of the stock over recent years and develop an educated guess.

To find out how long it will take to double your money, take 72 and divide it by the annual interest rate of your investment. This will give you the number of years it will take you to double your money.

For example, let’s say you invest $1,000 today in an investment that provides an annual return of 10 percent. You’ll take 72 divided by 10. This will give you an expected time frame of about 7.2 years to double that $1,000 to $2,000.

The rule of 72 is a fairly accurate tool for assessing the target date for doubling your money when it comes to lower rates of return. When you sit down and decide on your first investments, you can create an accurate time horizon for when you can expect various returns.

It’s always advisable to have a time horizon set out so that you have a date in the future that you can expect to have your funds available.

The rule of 72 clearly shows the power of compound interest and how even a small amount of money can help you with your retirement planning and financial goals.

How Can I Make My Money Grow Faster?

Whether you decide to invest in an online saving account at a FDIC insured credit union or bank, or you have developed your own portfolio, most of us would like to see our money grow faster.

While financial planning is a necessary part of the financial freedom process for a first-time investor, it can be a bit discouraging.

After you realize how long it’s going to take to double your investment, you may be wondering how you can get to your place of financial independence faster.

At the heart of growing your money is personal finance. When you track your spending, stick to a budget, and pay your investments first, then you’ll be on track for a successful financial future. There are various tactics you can utilize which can help you to grow your money faster.

Many involve close management and paying attention to the various types of retirement planning.

Assess Investment Vehicles With Various Vendors

As a first time investor, you’re likely going to be dealing with a select few investment vehicles when you start out.

Take the opportunity to do your own investment management to learn more about the investment opportunities in that specific vehicle sector. You may discover that your local credit unions can offer you a better interest rate on your savings account than online vendors can.

By transferring your money to the higher-paying account, you can grow your money faster.

Obtain More Money For Investing

When you sit down to do financial planning, you should be looking over your budget. Look for areas where you can free up some money to put towards investing. This could be as easy as downgrading your cable service or skipping your morning latte.

Little habit changes over time can result in lots of extra money to invest and grow.

If you’ve decided to take control of your personal finance, you’ve likely considered investing. While this may be something completely new to you to start with, you’ll find that there are many resources available that can assist you in growing your wealth.

It’s vital that you start with understanding the various types of investments that are out there for you to choose from. Never invest in something you don’t fully understand.

When you better understand the basic first investments you can make, you can better determine what investment strategy is going to fit the bill to get you where you want to go financially, both now and in the future.

This article originally appeared on Arrest Your Debt.