Posts tagged: assets

Paving the Road to Financial Security

financial safetyFor many people, financial security is something that always seems to be just out of reach. And while there is no doubt that it cannot be achieved overnight (unless you have a big lottery win) paving the road to financial security is something that you should be aiming for your entire life. Ultimately, it is all about getting into some good habits and making some savvy decisions. So, here a few financial points that you should consider whatever point of life you are at.

Recognize Yourself as Your Biggest Asset

Developing your skills, knowledge and experience will stand you in good stead when it comes to your financial future. You never know when you may need to call on these things that you have learned over the years. Rather than squirreling away that extra bit of money every month, you will be far better off treating yourself as an investment. So you could decide to complete a course or have some lessons in something instead.

Set Short-term Goals

Many people have long-term financial goals that they aim to achieve, but it is impossible to predict what twists and turns your life will take. Instead, you should choose some measurable and attainable short-term goals to focus your time on. As an example, you could aim to pay off your credit card debt. Make sure that you set a specific time limit on this, as you are much more likely to enjoy success if you do this rather than letting it drag on indefinitely.

Become Financially Literate

Saving money every month is obviously a good habit to get into, but it is not helping you to become financially literate. For example, have you done the necessary research that tells you that this account is giving you the best return on your investment? Are you aware of the other investment opportunities that are out there? People who keep up with the finer details of finances are much more likely to enjoy financial security in the future.

Keep an Eye on Your Lifestyle Costs

Making sure that you aren’t living beyond your means is one of the best habits you can get into during your life. The best way of doing this is by keeping a close eye on your expenses. Write out a list of your regular outgoings so you can decide whether or not there are any savings that can be made. As your living situation changes and your expenses adjust, it is important that you reassess and reapportion your expenses.

Don’t Borrow to Finance a Lifestyle

If you decide that you want to start a business, you may well find that you need to borrow some money to finance your venture. This is an example of a calculated financial risk. If you want to buy a new car, you shouldn’t be racking up credit card debt in order to do this as this will never stand you in good stead in the future. Not buying what you can’t afford is one of the most important financial lessons you can learn.

How Much Should Your Home Down Payment Be?

financial quakeWhen you’re buying a home one of the biggest considerations is your down payment. Depending on the loan you are getting, you may have a specific requirement for how much you want to put down. That’s the minimum for that loan, though, and doesn’t mean you can’t put down a larger amount. But should you? That’s a choice only you can make. Before you decide on what level of down payment you want to consider, take a good look at your finances and be sure that any down payment amount you choose won’t leave you in financial peril.

Putting 20% Down

Among your down payment options is choosing to put 20% of the purchase price down on the purchase of your home. This option is often chosen because it generally avoids the requirement for you to pay Private Mortgage Insurance (PMI). However, not everyone has this level of down payment, and there are times when it pays to keep money where it is and not pull it from savings or other investments to use it for a down payment. In some instances, you could actually lose money by trying to avoid PMI with 20% down.

5% and 10% Down Loans

For people who don’t have a 20% down payment or don’t want to put that much money down on their home, 5% or 10% as a down payment is relatively common. Most people with good credit will qualify for these types of loans through various banks and credit unions, along with other types of lenders. Paying PMI will be required as a part of these types of mortgages, but in a number of cases, this PMI amount will not be high. With a low PMI and the ability to leave money in the bank or in investments, this can be a chosen option for many buyers.

FHA and the 3.5% Down Requirement

When people choose a Federal Housing Administration (FHA) loan, the minimum amount they can put down with good credit and solid income is generally 3.5%. In some cases, an FHA loan may require them to put down more than that, such as 5%. The money they put down can be from their own funds, or it can be a gift from someone else, but it cannot be from a loan. There will be PMI required because of the small down payment, but this can allow people who do not have a lot of money to purchase a home so they no longer have to rent.

No Money Down Loans, Like USDA and VA

In some cases, the Veteran’s Administration and the USDA offer loans where a person doesn’t have to put any money down. There are specific requirements for these loans, and the seller of the home may be asked to pay closing costs in the transaction. Additionally, good credit is generally required, and for USDA loans, there may be specific areas in which the property has to be located. This can be a hindrance for someone looking for property under these types of loans, but the lack of a down payment can also make them attractive to some buyers.

Putting a Larger Amount Down on Your Home

Another option is to put much more than 20% down on a home. Some people do this on investment properties, but there are also people who choose this option for their primary home. They may do this to reduce the size of their mortgage payment, get a mortgage with a shorter term, or otherwise get more favorable offerings from their lender. They may also have money available to them that they aren’t investing, so they want to use it in a way they feel is wise. Paying more down can be an option for people with higher levels of income or savings.

No matter which option you choose for a down payment, it’s often best to consider a variety of options. Then you can make the right decision based on your specific needs and situation. There is no right or wrong choice when making a down payment on a home, because everyone has different circumstances. The ‘right’ down payment choice is the one you’ve thought about, understand, and that works for you.

Invest In Paradise

invest in heavenAre you thinking about investing in property? If you are, you should consider buying a holiday home. People who invest in property often oversimplify the equation, missing out key details. For instance, they might just think about how much it costs to buy the property. But they should also be taking into account maintenance bills as well as the legal costs of actually buying the property in the first place. That’s why when you do buy property you need a lot more in your account than just the deposit.

One of the ways to make property investments easier is to look into buying a holiday home. There are numerous benefits of this type of investment. First, you will be able to use the property yourself and get enjoyment from it, even while it is making you money. Second, you can buy a property in a luxury location, driving up the rent you can charge as well as the overall price if you do decide to sell. Third, it’s easier to keep those maintenance bills under control. So, let’s look at the steps you’ll need to take investing in a holiday home.

Choosing The Location

There are plenty of different locations to consider when you choose to buy a holiday home. For instance, you could purchase one on the west coast of California. Orange County is a beautiful picture perfect paradise that tourists flock to year after year.

However, you do want to be careful when buying real estate that you don’t purchase somewhere too far. It needs to be in a location that either you love traveling to or that is close enough for annual trips. The reason for this is that you could have business that needs attending to at the property. Of course, there are always options to skirt around this issue if you have your heart set on a far off location for your holiday home.

Accounting For Maintenance

The best way to handle maintenance is to buy a home in a gated community or a holiday community. In areas like this, maintenance is often covered by local services in the area. As such, with a basic fee, you can always make sure that your holiday home is ready for new guests. That brings us to one of the most important aspects of investing in a holiday home.

Renting It Out

Renting out your holiday home is a great way to quickly make back whatever you paid for it. That’s why you might want to consider buying a more expensive property. This way you’ll be able to charge more in rent and attract high-end guests who can be trusted to look after the property during their stay. Spending a couple of million on a holiday home might seem like a risky investment at first. But when you realize you can rent it out for a couple thousand a night, you’ll see it’s the perfect opportunity.

Good luck with your own holiday home investment. Take the right steps, and you can easily make your next fortune on a home in paradise.

Increase Real Estate Value With Cost-Effective Improvements

real estate valuesIt goes without saying that there are ways in which you can make smart investments and ways in which you can make dumb ones. Investing your money in real estate is a smart investment. It’s a great way to tie up your money in a physical asset that can increase in value over time.

Generally speaking, all real estate investment earn money over time, as the market tends to always increase in value. However, there are ways you can speed things up and improve the value of your real estate investment in a short space of time.

How? By making home improvements. But, not just any improvements, cost-effective ones. You want to make improvements that don’t cost a lot of money but can add serious value.

Here’s how to do it:

Look For The Best Value Option

No matter what work you want to carry out on your property, always look for the best value option. This could mean looking for an option that uses different materials, but costs less.

As an example, say you’re building a garage – which is a great way to add value to the property – you have different materials to choose from. There’s the regular brick and mortar, then there’s steel. Most people go for the first option because they think it’s more traditional. However, the metal building cost per square foot is a lot less than this option. So, in this scenario, steel is the best value option. You still get a garage, it’s still sturdy and strong, you just pay less – simple.

Apply this tip to all your home improvements too. Say you want to replace your roof with a more modern structure, weigh up the material options and find one that offers the best value.

Try And Cover The Cost Of Labor

Often, it’s not the actual improvements that cost a lot but rather it’s the cost of labor. What I mean by this is that paying for someone to come in and make the improvements could cost a lot of money. So much so that it could prevent you from making a profit on your investment.

Bearing that in mind, what you should do is try and cover the cost of the labor yourself. Try and carry out the home improvements yourself or with the help of friends/family. You won’t have to pay any labor costs, and it could save you a fortune. Now, you’ll earn more from the improvements you make yourself, as they don’t cost as much.

Of course, there are probably some home improvements that you can’t make yourself. In which case, you will be forced to hire some outside help. But, refer back to the first point; find the best value option. Look around for a contractor or handyman – or whoever you need – but choose one that offers the best price as well as a proven track record of quality service. Even if you can only do one or two improvements yourself, you still save some money.

It’s all about finding cost-effective ways to improve your home and increase its value. Now, you could sell it earlier than you intended and still make a sizeable profit.

Your Perfect Real Estate Investment Has Land-ed

ideal investments in real estateThere comes a time in every single person’s life where the penny drops and they realise that it could be time to invest in real estate. However, most people have a warped sense of what that actually means and so they start thinking about how they can afford to, the complexities around doing so, the trials and tribulations, the effort and the work involved.

But investing in real estate doesn’t have to mean buying a structure. It doesn’t have to mean investing in an apartment, flat, house, condo, commercial property or residential space, and it doesn’t have to mean fixing up somewhere. You see, real estate does include land, you know. Yeah.

So many people overlook vacant land as an investment, though, which is foolish if you ask us, and here is why:

You Buy It. That’s All.

When you invest in a structure, you have to think about renovation works and replacing stuff, which you never have to do with vacant land. You buy the land and you have the land. You don’t need to have a knowledge of construction or anything, just an idea of whether the land could be suitable for building on. Simple.

It’s So Cheap

Vacant land is so cheap compared to other types of real estate. You could buy a decent chunk of land with the cash that is in your savings right now, probably, and if not, all you have to do is compare personal loans and take the one that you like the look of. That’s it, then. There are no other outlays. No structure to pay for, no mortgage to battle, taxes are teeny-tiny, and so is insurance, if you want to have insurance.

No Hassle Whatsoever

The thing with investing in vacant land is, well, it’s vacant. That means there are no tenants you have to chase up because their rent is late. You don’t need to pay an agent any maintenance fees or get a gardener or a plumber or anything. No. Vacant land is the least demanding real estate investment you can possibly make. Period.

Prices Can Only Increase

Your options with vacant land are endless. Either you can hang on to it and live safe in the knowledge that no one is making any more land, which means your little piece of the earth is only going to become more in demand and demand is good. You could start using it for business purposes, in which there are only a few things to consider. You could even seek out some planning permission and watch as the value skyrockets, and we mean skyrockets, and that’s without even having to put a nail in anything. Whatever you fancy, you can do.

Earn An Income

The thing with vacant land is, you always have options on how to generate money. Think about it. You could turn it into a campsite, you could rent out some of it to a telephone company to erect a mast or a farmer who wants some grazing grounds. Maybe there is an energy company sniffing around. If it’s wind power, then you can go online and see exactly how much wind your land gets. If it’s solar, then you’re an option so long as you aren’t covered by a giant canopy. Money, money, money.