TENANT NEWSLETTER

by Mark Tarses

January, 2009

WHAT IS A "GOURMET KITCHEN?"

It seems like every new apartment house claims to have "gourmet kitchens." A lot of ads for houses and condos for sale also brag that they have "gourmet kitchens," but just what is a "gourmet kitchen"? At a landlord banquet last month, I met the manager of one of those big new apartment houses in downtown Berkeley. I said to her: "You advertise that the apartments in your building have 'gourmet kitchens.' Just what does that mean? " She answered: "It means that if you are a gourmet cook, you can make gourmet meals in our kitchens." Well, d'uh! So what?! I have asked many other people in the real estate business for a definition of "gourmet kitchen," but everyone gives me a different answer. Several Realtors told me that "gourmet kitchen" simply means that the kitchen has a gas stove, but not all of them agreed about that. As one Realtor pointed out: "It is possible to cook a gourmet meal on an electric stove." There is an appliance store near me with a sign in their window that says: "It's not a gourmet kitchen without a Waste King Gourmet Garbage Disposer!" Hmmm. I'm suspicious. Can this garbage disposer really differentiate between gourmet and non-gourmet garbage? Will this garbage disposer grind up non-gourmet garbage, like a half-eaten Twinkie, or will it indignantly spit it out? Can't gourmet cooks put their garbage in a garbage can instead of a gourmet garbage disposer? I was tempted to go into the store and ask the sales clerk these questions, but I didn't.

SPEND YOUR GIFT CARDS A.S.A.P.!

In my November 1 newsletter I wrote: "The next big retailer to go (bankrupt) may be Circuit City." Ten days later, Circuit City did declare bankruptcy. The 2008 Christmas sales season was a bust, and for some retailers, it was a disaster. Remember: gift cards do not improve with age like expensive French wine, and they often become worthless. There are a lot of candidates for bankruptcy in the next few months, including Border's Books, Pier 1, Office Depot, and Office Max. Then there's General Motors and Chrysler.

PAYING OFF CREDIT CARD DEBT.

The Federal Funds Rate, the interest rate that banks pay when they borrow money from the Federal Reserve, is now 1/4 of 1% a year, and the Fed is allowing some banks to borrow money at 0%. Nevertheless, the average interest rate on credit cards remains around 18% a year. Think about it - banks can borrow money at 1/4 of 1%% interest and then lend it at 18%. That's an astonishing markup! The tremendous profit on credit cards debt is keeping many big banks afloat. If you have credit card debt, you should make getting rid of it your top priority. Below I have listed what I think are the 3 best methods for paying off credit card debt.

1. Sell Investments. This is the place to start. If you own stocks, mutual funds, bonds, gold coins, or anything else that can be turned into cash easily; sell them all and use the money to pay down your credit card balance. If you have credit card debt, it doesn't make sense to keep cash assets. I know people who are paying 20% interest on their credit cards and yet have money in saving accounts that pays 2%. Frankly, that's just plain stupid! On several occasions I have suggested to people that they take money out of their savings accounts and use it to pay off their credit cards. Whenever I make that suggestion, people invariably tell me that they can't do it because they need to keep money in their bank account for a "rainy day." If you are paying 20% interest on a credit card, you don't need to keep money in the bank for a "rainy day." It's raining now, and you're getting soaked!!

2. Shop For a Cheaper Credit Card. Switching to a credit card with a lower interest rate won't reduce your balance, but it has the same effect. Financial magazines regularly publish articles listing the best credit card deals. The October, 2008 issue of Consumer Reports had an article entitled "Best Credit Cards" that listed cards that charge under 10% a year interest.

  • Contact your credit card company and ask for a lower rate. Check their web site first and take a look at the deals and rates they are advertising. The credit card business is very competitive, and most lenders would rather switch a customer to a lower rate card than lose him to another company. The fact that you called and asked for a lower rate tells your lender that you are shopping around.
  • Open your mail. Most people receive dozens of unsolicited credit card offers in the mail every year that they toss out without reading them. Most are lousy deals, but read them them anyway. You may find a diamond in the trash.

    • 3. Borrow Money From Friends and Relatives. Yes, it is awkward and embarrassing to ask people for money; however, if you come prepared with facts and figures and make your proposal on a real businesslike basis, you are much more likely to make a deal. If you are paying 18% interest on a credit card and your parents are getting 3% interest on their savings, then both you and your parents might profit handsomely with a loan from them to you at 10% interest to pay off your credit cards. To set up a proper loan agreement, go to Virgin Money USA. This is a Virgin-group company owned by Richard Branson that you probably never heard of. Virgin Money specializes in managing loans between friends and relatives. A complete loan package for business, personal, and student loans ranges from $99 to $299, plus $9 per payment for loan servicing using electronic transfers. You and your lender negotiate the amount of the loan, the interest rate, and the repayment terms. A service like Virgin Money provides the needed loan documents and brings in a neutral third party to handle the accounting.

    CANCELING A CONTRACT WITHIN 3 DAYS.

    Nearly everyone has heard that when you sign a contract, you have 3 days to change your mind and cancel the contract without penalty or a "legal cause." Actually, that isn't true. Consumers have the right to cancel certain types of contracts within a few days, but most contracts are legally binding when you sign them. For example, a residential lease is a binding contract when you sign it. You do not have the right to cancel a lease and get your deposit back simply because you changed your mind or found a better deal elsewhere. This misunderstanding about contract law often gets college students into trouble when they move out of the dorms and into apartments in the private sector. To see a complete list of contracts you can cancel without penalty under California law, go to California Department of Consumer Affairs. In addition, some contracts can be canceled without penalty under the Truth in Lending Act or by Federal Trade Commission (FTC) "cooling off" rules, but I don't know of a web site where they are all listed.

    WORST APPLICATION EVER.

    We Want a Free Clubhouse. I own a cottage in Berkeley. In 2006, I let my nephew Aaron and his partners live in this cottage rent-free for nearly a year while they were developing a dot-com business. A few months after they moved in, I received several e-mail messages from a woman who had heard something about this, but she got the story mixed up. She thought that Aaron and his partners were members of a club, and that I was giving away free clubhouses to worthy organizations.

    Dear Mark:
               Hi! I'm a friend of Jeanette xxxxxx. She just told me that you are giving away free clubhouses. I think that is very generous of you. I am a member of the Berkeley Coven of Blue Caped Witches. We would love to have a free clubhouse! Jeanette says she doesn't know how many clubhouses you have available, but we would prefer a clubhouse with a stove so we can bake oatcakes there. They are like oatmeal cookies. We cannot afford to pay you any rent for this clubhouse, but we can reward you with our blessings and our sacred oatcakes. Let me know if another clubhouse is available. I understand that Jeanette gets one before us. Blessings upon you,
    Earth Tide Elsbeth xxxxxx.
    Snacol Injus Panatrol

    Dear Mark:
               I sent you a message a few days ago, but I didn't get a reply. I want to make sure that you got it. If you didn't get my message, let me know as soon as you can so I can contact AOL and tell them that I have a problem. I don't want to pester you, but you are the only person I know who is giving away free clubhouses, and we don't want to miss getting one. I know a lot of people would like to have a free clubhouse besides us. I think this a wonderful thing you are doing! Wishing You Favorable Signs,
    Earth Tide Elsbeth xxxxxx.
    Snacol Injus Panatrol

    Dear Earth Tide:
               I am not giving away clubhouses. I don't know how Jeanette got the idea that I am giving away clubhouses, but it isn't true. Good luck.
    Mark Tarses

    Dear Mark:
               That is a big disappointment, but to be honest, I thought it sounded too good to be true. Are you giving away anything?
    Earth Tide Elsbeth
    Snacol Injus Panatrol

    Dear Earth Tide:
               No. I am not giving away anything. Sorry.
    Mark Tarses

    P.S. - I never found out what 'Snacol Injus Panatrol' means, and I never got any sacred oatcakes from Aaron or his partners. I'll have to speak to them about that.

    CHOCOLATE NEWS.

    On December 23, 2008; French customs agents seized 10 tons of counterfeit chocolate bonbons. Lab tests proved that the 30,000 boxes of gold-foil wrapped chocolates labeled Ferraro Rocher were fakes. The chocolates arrived in France on refrigerated trucks from Turkey, but no one seems to know where the bonbons were actually made. The chocolates will be destroyed. Seizures like this are becoming increasingly common as counterfeiters around the world are moving from traditional luxury products, like leather handbags and perfume, to food products like brand-name chocolates.

    FREE SHOWER CURTAINS.

    If your shower curtain is worn, torn, or just plain grungy; I'll be happy to give you new one. The vinyl shower curtains that I keep in stock are made for Hilton hotels and are not sold in retail stores. They have some nice features that are hard to find in shower curtains made for home use. First, the holes in the header for hanging these curtains are tear-proof. The header is reinforced with fiberglass and the holes have no-rust stainless steel grommets around them. There is no side seam or bottom hem to collect soapy water, and the curtain has been treated to resist mold, mildew, bacteria, and fungus.

    Mark Tarses

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