Thursday, August 31, 2017

Trump winds down the myRA flexible retirement program for lower income people

The Trump Administration will wind down the myRA program, a flexible IRA that had been set up for low and moderate income people with more flexible withdrawal rules.

On Truth-Out and TalkPovery, Alysha Alani describes the program explains how she helped low income clients in the Seattle area with the program.

Wikipedia attribution link for Seattle area aerial picture under CCSA 4.0 by Aditayade

Monday, August 21, 2017

Suggestions for narrowing HOA rules for home-based businesses

I’ll continue the post from Thursday Aug. 17, assuming that many retirees are likely to have home-based second careers.

Condos, townhome, and homeowner associations ought to spell out “reasonable” exceptions to flat no business use of condos. 

1.  County/city ordinances
2   No sings, banners, decorations
3   No personal traffic to unit beyond what is normal for a residence; no being open to the public like a retail store or even church.
4  Generally professional services (like physicians) are not allowed, except in units set aside for this.  In Northern VA, it is common to have townhome “office parks” set aside for such use and sold as office condos.  In some communities there could be specific exceptions, like piano teaching.
5   No storage of large volumes of items for sale (Extra Space Storage or similar facility should be used for large volumes of items, only a small sample in the unit.)
6.  No unusual equipment not normally found in a residence -- just ordinary computer and broadband Internet work as a writer  / blogger could do   (income comes from book sales and from Internet ads on Google/Amazon) 
7.  UPS Store (not the condo building) is the normal mailing address for deliveries
8.   No explicit mention of home address (or of seller's identity, for that matter) in social media  (mention of a residence to whitelisted social media contacts for purely social purposes is OK)
9  There is no objection to normal telecommuting with a conventional employer (even where work from home is permitted) as long as it doesn’t require visitors or unusual equipment.
10  Permitted home-based businesses are normally sole-proprietorships.
11   However, for some HBB entities created as sole proprietorships, home address might be listed in state sales tax and business records as a clientized "physical address" available as public records (probably not easily found online but conceivably found by a determined party -- there are companies which provide this information outside normal search engines).   A HOA should give guidance before closing if this is acceptable. If not, a homeowner would presumably have to look for a genuine commercial space (which might be a small place in a distant small town to keep costs low) as the official “physical location” of the business entity.  Most states or local governments don’t accept UPS stores as physical business addresses, just mailing addresses.  These concerns could also affect homeowners who want to run fundraising campaigns for 501c(3)’s in their units;  the organizations they support may need separate physical addresses. 

HOA’s often forbid short term subleases, like Airbnb.  They should inform purchasers of their rules on this before closing. In some cities, Airbnb is heavily regulated, but some developers will build pricey condos in trendy neighborhoods with the expectation that Airbnb-positive policies will be selling points.  Some professionals who travel a lot (such as well established people in film) seem to like to buy such units.

Saturday, August 19, 2017

Progress report in senior retiree rental qualification

Some more investigation as I assess my own situation with respect to possible moving, suggests that in northern Virginia, at least, landlords will allow retirees to use large cash checking account balances (at least more that the total amount of a lease) as an alternative to the monthly income rule, which normally would be you make at least 3 times the rent.
Income usually includes pensions, social security, scheduled IRA distributions, and annuities.  With low interest rates, it tends to be difficult to make an annuity generate a lot of income unless it is short term. (See April 21 post.) 

This can get more serious in time if political circumstances endanger senior net worth or Social Security income, like failing to raise the debt ceiling. 

Thursday, August 17, 2017

Condo and other homeowner's associations erratic on home-based businesses, endangering retiree second careers

Retirees downsizing and wanting to buy condos should probably be careful if they work with home-based businesses.

This sounds like something that could come up more often in the future.  Retirees may have started second careers with “homework” and could conceivably face being forced to stop with cease-and-desists if they are not careful before they buy.

Most communities (counties and cities) have fairly consistent rules on HBB’s in separate homes.  Generally they don’t allow businesses that cause traffic to increase, produce noise, pollution  or structural risks,  and so on.  Some have more explicit rules for possibilities like day care centers, which others prohibit. However, in the past in some places, as John Stossel pointed out on 20-20, some rules were more motivated by protectionism by larger businesses or even unions, or by a desire to force business persons to rent commercial space. In Charlotte, a woman wasn’t allowed to keep a cookie-baking business without a commercial kitchen (which most larger churches do have). In Chicago, New Jersey, and even Los Angeles, back in the 1990s, freelance writers where chased when working at home. But these abuses have gotten less problematic as telecommuting has become more problematic. (Note: Houston has no zoning, as I remember.)

You would think condos would, by and large, follow the rules of their own community zoning.  It appears that some do, but there are many with outdated rules banning all trade or business activity.  Then it’s hard to see if this really applies to the blogger who never has visitors or takes deliveries and really makes a living from Internet ads or subscriptions (the “Blogtyrant” model).  A few HOA’s fear litigation unless they ban everything.  Some HOA’s may not be technically savvy (until techies get elected to their boards).  And now, given the political climate, a few HOA’s could fear owners attracting hostility to the building, endangering other residents.


Another problem could occur when business owners submit tax documents to localities or states and must disclose the fact that their businesses are located in their homes. 

I found a few articles explaining these trends:   Chicago, HOALeader, MicondoLaw, New England.

Many condos do not allow owners to offer Airbnb-like rentals (in highly urban areas where prices are higher it is more likely to be allowed, even expected by owners; but  cities are struggling with it, add new special licensing rules and limiting annual use, as hotels object to the competition.  It sounds like turf protection and commercial protectionism, but other people say it is their jobs.

Update: Aug. 23

Some feedback suggests that some condos are concerned that an organization will operate from a condo without anyone living there.

Friday, August 11, 2017

FEMA teams with Red Cross to ask for volunteers to install smoke alarms

The Red Cross has partnered with FEMA to sponsor a volunteer program to install fire and smoke alarms in homes.

FEMA sent out the email today, which sounded odd for it to be asking for volunteers.  The Red Cross link is here.

The program appears to need people to physically install the alarms in low income homes.It probably requires quite a bit of training. 

Independent smoke and CO alarms not connected to anything and battery operated can be purchased. 

I thought it was odd to see this from FEMA, but during the 1980s FEMA had started a “civilian reservist” program, which was written up in the Dallas papers when I was living there.

Smoke and fire alarms associated with security systems are often professionally installed and don’t need battery replacement, as they are powered by the system (the master battery for such a system needs to be replaced about every four years.)  It is desirable that systems have wireless rather than physical cable connection so they can’t be cut. 

Thursday, August 10, 2017

UBS publishes snazzy retirement guide

UBS Investor Watch has a little online booklet “Retiring old clichees: Bucking convention, retirees find happiness and seek growth”, link here.

The presentation compares the issues of being both emotionally and financially ready for retirement. Once retired, most retirees like the flexible schedules of not having to commute to work.

The presentation acknowledges that health concerns can quickly become important.
It also doesn’t take into consideration that external stability in the economy and politically, even national security now, matters. 

Friday, August 04, 2017

Retirees need to be wary of scams in refinancing mortgages

Retirees should be wary of mortgage refinancing scams, such as this story from Tidewater Virginia.  The victim lost her home, and putting the scammers in prison doesn’t get her home back.  

I would wonder if the same problem could exist with reverse mortgages touted to seniors, which could be discovered after passing by the estate. 

The scam seemed to be a weakness in an Obama administration loan modification program intended to help people with the housing crisis of 2008. 

Thursday, August 03, 2017

Still more dribbles on senior qualification for rentals

I’m getting a little more info on the issue of retirees renting regular apartments and qualifying based on assets.

The latest feedback is that many landlords will consider assets favorably as long as they are liquid (cash or in accounts that don’t lose principal).  It sounds like they’d need to see at least a year’s rent. Maybe not all.  When retired people qualify on income alone, the rent is supposed to be no more than 3 times the income –but I wonder if that refers to subsidy.  4 times is more common. 

Some landlords offer varying length leases with lower monthly rents for longer leases.  It is logical that they would be more amendable to the whole-term-in-advance approach. 

At current low interest rates, it is difficult to convert a cash asset basis into annuity income. 

If Congress ever did make cuts in social security to existing retirees, like as a result of a debt ceiling crisis, that could destroy qualification. Theoretically this is constitutional, and one could conceive of a cutoff based on assets, as if to penalize having saved all one's life.