Property Investment Without the Hassles

Janet Schlarbaum Investment Research By Liz Koh

As most of us have owned a property at some stage in our lives, it is a form of investment we are familiar with. If we own a property we can choose to live in it ourselves or let it, we can drive past it, touch it, admire it, show it off to our friends and use it as security for a loan. Of course, there’s also the popular belief that “land must be a good investment because they’re not making any more of it”. It is not surprising then, that when investors set about creating wealth or establishing a retirement fund, property investment is often at the top of the list.

It is astounding how often people plunge into property investment without doing their homework. Many property investors – usually the less successful ones – cannot tell you what rate of return they are getting on their property. Good professional advice is essential before you purchase an investment property so that you can estimate as accurately as possible the likely income, outgoings, tax liability (or tax benefit) and overall return (net income plus capital gain). While higher priced properties can produce better capital gain, they often generate a lower income return, as rent is determined more by the physical characteristics of a property (eg the number of bedrooms) than the value of the property. Advice should be sought on the best ownership structure for an investment property and research should be done on the best location to invest in.

Owning property directly gives an investor control over their investment, but brings with it all the hassles of bad tenants, midnight calls to fix the plumbing, and the risk of having a lot of money tied up in one asset which might take some time to sell if funds are required.

Property investment can, however, be hassle-free. Two alternatives to investing in property directly are listed property trusts and managed property funds. Listed property trusts are investment vehicles which are listed on the stock exchange. These trusts raise funds from investors which are then pooled to purchase a diversified portfolio of investment properties. They generally pay excellent dividends to investors and are a good source of retirement income. Investors can convert to cash quickly if required by selling their holding on the share market. The value of the investment is determined by a combination of the value of the underlying property assets and the dynamics of the share market. Managed property funds, of which there are many available, operate in a similar way except that they are not listed and the value of the investment is determined by the value of the underlying assets rather than being influenced directly by the share market.

Marketing Strategies For Investment Properties in This Economy

Janet Schlarbaum Side Effects of the Current Economy By Michael K Carroll

One of the side effects of the current economy and number of foreclosures is an increase in the percentage of people relying on leased housing. As families lose their homes they have to live somewhere and rentals are often the only choice available to someone with a foreclosure on their credit history. Add on to the fact that some estimates show that in California alone twenty percent of foreclosed properties were rental properties all adds up to the fact that there are a flood of people looking to rent rather than own. This would seem to be great news for owners of income property, but with the new renters there are also the fact that many homes being sold by financiers are being purchased by investors who have every intent of turning that property into an incoming producing property. The market just got more crowded and owners are now faced with increased competition for tenants. Move in Specials, first month free, decreasing rents and no security deposit are all common techniques to try and make sure your property stands out amongst all the others, yet they are not always the best solutions. Instead of jumping to a decrease in income and security, other tactics should be looked at. Reducing your income, which is exactly what most these tactics do, make sure you have exhausted all other avenues first.

Housing is an emotional purchase and any marketer will tell you people make decisions based on emotion. First and foremost you need to make your property as inviting as possible. It goes without saying that you need to make the outside look as good as possible, but take a look inside. Any real estate expert will tell you that a staged home is easier to sell than an empty one, the reason is it is easier for the prospective buyer, or in the case of income property tenants, to see themselves in the home if it has some kind of furniture in it. Staging companies are great resources and might even offer their services for a percentage of the lease. Property Managers or owners of a number of units may find it more profitable to buy a room or two worth of furniture and then store it for when you need it. The cost of furniture and rental space is probably less than the income you would lose if your vacancy extends into more than a couple months.

You can have the home decorated the nicest and have the best sign out front but if people are not driving by they are useless. Open up a classified add and you will see an overwhelming number of ads all saying the same thing ”Charming space with so many beds and so many baths in such and such neighborhood”, what does that tell you. If you own properties and do not have a website what are you waiting for. URL registration can easily be found for under twelve dollars a year, some sites even offer basic hosting with the URL or at the vary least hosting plans are very affordable. If you are not savvy in the ways of HTML there are companies that can build a website for you. Instead of just putting the standard verbiage you can now direct potential tenants to your website where they can view pictures, get community information and download application materials. This also gets the potential prospect imagining themselves in the home before they even view it. How cool is it if you show the place, getting an application right then and there.

Real Estate agents who are looking to sell a house often will hold an open house, a time for people to walk in and view the house. Yet this tactic is not as popular in the rental house, and is a missed opportunity to save time and to get your property rented. Set aside a Saturday or Sunday, advertise it in all of your normal outlets, making sure you set clear start and end times, and then see what happens. While sitting open houses for my wife I was surprised the number of time I was asked if the owner would consider renting the home. It is easier to get people to come to you one day as opposed to driving to the location every time someone wants to see it. Some marketing strategies save you money and some save time, open houses could save both. The day of put signs up directing people to your property, make sure you have all the necessary forms that potential tenants will need to apply for a lease.

Unfortunately not all advertising is free, and sometimes you need to pay to place an ad. Advertising is an investment and as such you need to make sure the money your spending is well spent. If you are not asking everyone who calls, to inquire about your properties, how they found out about the home; if you take only one tip and use it make this the one. Keep a tally of calls that come in, calls that lead to showings and calls that lead to signed leases. If you find that 95% of your signed leases are referred from one particular ad in a certain magazine, you can start to eliminate ads in magazines that do not get you the same exposure, this means you save money. Tracking referral sources also allows you to put the optimal message out there, or allows you to target which property you market in which publication. You may even find out that your best marketing tool is a good old lawn sign. Never waste money on an ad that does not work.

Article recommended by: Janet Schlarbaum

Author: Cornie Herring

People always say that investment is a money game with the playing rule of “high risk with high return and low risk with low risk”. You may want to invest in an investment portfolio that is able to give a good return and stock market is always the best choice in term of high return. But you aware that investment in the stock market will cause you to lose all your money as well, because the game rule said “high risk is high return and low risk comes with low return”. Hence, stock game might not suit your risk profile; you may want to look for an alternative that can give comparatively good reward but with much lower risk than stock. If you are categorized in this group, then mutual fund can be your game.

Mutual Fund Is A Risk Sharing Game

A mutual fund is simply a financial medium that allow a group of investors to pool their money together with a predetermined investment objective. The pooled money will manage by a fund manager. The fund manager is a person who is widely expert in stock and bond markets. He/she is responsible to invest the pooled money into specific securities, usually stocks and bonds. When you are buying shares of mutual fund, you will become one of the fund’s shareholders. All the gains and losses will be shared among the fund’s shareholders. Hence, mutual fund is a risk sharing game.

Compare to stocks and bonds, mutual funds are one of the cost effective and an easy playing game. You do not need to really expert in stock and bond market because the fund manager will take care of it; and you do not need to crack your head to figure out which stocks or bonds to buy, because you have the expert, the fund manager to make the decision for you.

You do not need a lot of money to get your start the game; you decide the amount of money you plan to invest into the mutual fund. Some mutual funds may even let you start with just $100. The best part is the cost effectiveness. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading cost. The biggest advantage of mutual funds as compare to stocks or bonds is “diversification”.

Diversification Will Lower The Risk

Investment experts always advise that if you want to invest you money, “Don’t put all your eggs into the same basket; else if the basket fall, all you eggs will break”, some will happen on your money, if you invest in one stock, if the stock perform negative, you loss all you money. Diversify your investment to spread out your money into many different types of investments. When one investment is down, another might perform in up trend.

Hence, with the diversification of your investment, you will reduce your risk tremendously.

You can diversify your investment by purchasing different kinds of stocks and bonds instead of one. But it may take weeks to buy all these investments. In contrary, you can get these done by purchasing a few mutual funds and mutual funds automatically diversify your investment across many stocks and bonds.

In Summary

Mutual fund is a risk sharing investment portfolio, it’s provides you a medium of investing your money into a high earning stock & bond market while automatically diversify your investment to reduce your risk. Hence mutual fund can be your alternative of investment portfolio that will give you higher reward and lower risk.

 Working Capital Management

Author: Jonathon Hardcastle
Financial management decisions are divided into the management of assets (investments) and liabilities (sources of financing), in the long-term and the short-term. It is common knowledge that a firm’s value cannot be maximized in the long run unless it survives the short run. Firms fail most often because they are unable to meet their working capital needs; consequently, sound working capital management is a requisite for firm survival.

About 60 percent of a financial manager’s time is devoted to working capital management, and many of the potential employees in finance-related fields will find out that their first assignment on the job will involve working capital. For these reasons, working capital policy and management is an essential topic of study. In many text books working capital refers to current assets, and net working capital is defined as current assets minus current liabilities. Working capital policy refers to decisions relating to the level of current assets and the way they are financed, while working capital management refers to all those decisions and activities a firm undertakes in order to manage efficiently the elements of current assets.

The term working capital originated with the old Yankee peddler, who would load up his wagon with goods and then go off on his route to peddle his wares. The merchandise was called working capital because it was what he actually sold, or “turned over”, to produce his profits. The wagon and horse were his fixed assets. He generally owned the horse and wagon, so they were financed with “equity” capital, but he borrowed the funds to buy the merchandise. These borrowings were called working capital loans, and they had to be repaid after each trip to demonstrate to the bank that the credit was sound. If the peddler was able to repay the loan, then the bank would issue another loan, and these were sound banking practices. The days of the Yankee peddler have long since pasted, but the importance of working capital remains. Current asset management and short-term financing are still the two basic elements of working capital and a daily headache for the financial managers.

Working capital, sometimes called gross working capital, simply refers to the firm’s total current assets (the short-term ones), cash, marketable securities, accounts receivable, and inventory. While long-term financial analysis primarily concerns strategic planning, working capital management deals with day-to-day operations. By making sure that production lines do not stop due to lack of raw materials, that inventories do not build up because production continues unchanged when sales dip, that customers pay on time and that enough cash is on hand to make payments when they are due. Obviously without good working capital management, no firm can be efficient and profitable.

Statements about the flexibility, cost, and riskiness of short-term debt versus long-term debt depend, to a large extent, on the type of short-term credit that actually is used. Short-term credit is defined as any liability originally scheduled for payment within one year. There are numerous sources of short-term funds, such as accruals, accounts payable (trade credit), bank loans, and commercial paper. The major elements of current liabilities are trade creditors and bank overdrafts, and these are further analyzed.

Janet Schlarbaum Capital Management

 5 Tried and Tested Investment Property Tips For Your Quick Success

By Ashish K Arora

Collected by Janet Schlarbaum

When it comes to long term investment, there is nothing to beat investment in real estate. With property prices almost always on the upswing, it is one investment that bring you rich dividends in the future. Investing in property though is not all about just having the financial wherewithal to buy a particular property. It has got a lot to do with finding the right property. What constitutes a right property is something that you may be wondering about. Here are some of the best investment property tips that you can find anywhere, which can help you make the right decision.

1. Foremost among all the investment property tips is to imagine that the property that you intend to buy is for renting out, rather than you living there. Remember, a sprawling lawn will not bring you cash flow. Instead, you need to take into account as to what a tenant would want? The house that you want to buy should have the necessary supporting infrastructure to attract tenants.

2. Another one of the important investment property tips that you should not ignore is to take for granted that property prices are always on the higher side and still increasing. Remember, you can always find bargains. The key lies in shopping around and finding one.

3. You should never feel dejected that you could not afford a particular house. You should remember that there are plenty of other houses that are available.

4. One of the key investment property tips is to do thorough research, before you go about looking for a property. You should be aware of the latest trends in the real estate market.

5. Another one of the important investment property tips is to seek professional help. For instance you can always get to know about the latest market trends from an experienced real estate agent.

Janet Schlarbaum For Your Quick Success