Category Archives: Finance

Investing in Real Estate: Commercial Property Types to Consider

Self storage as a form of commercial propertyIf you’re looking to diversify your investment portfolio and include safeguards against the volatility of the investment market, why not incorporate some property investments in your portfolio? If you don’t know where to start, take a look at some of the most common commercial property investment types below.

Retail Spaces or Buildings

The key to this kind of investment is location. For instance, if you want to invest in a standard strip mall with multiple units, you have to make certain that the location receives a consistent stream of foot traffic or you would be hard-pressed to find tenants.

Office Spaces or Buildings

Office spaces are usually in demand in virtually all cities. If you reside in a smaller town, you may consider investing in one unit first with one tenant, such as a doctor’s clinic. If you live in a bigger town or city, you could consider investing in several office units, or even a whole building.

Raw Land Investments

You could make money with raw land investments in different ways. For example, if you bought wooded land, you could contract responsible logging companies to harvest wood from your property. If the property is suited to farming, you could lease it to local farmers, or you could also just purchase some land and sell it later to property developers.

Multifamily Housing

Multifamily housing refers to apartment buildings. With the demand for affordable housing options, yet consistently increasing rental prices, you could generate a steady income stream with apartment buildings. Additionally, you could even take out HUD multifamily loans from mortgage and financial firms such as Bonneville Multifamily Capital to help you acquire multifamily properties.

Industrial Real Estate

This could mean plenty of things – manufacturing facilities, warehouses, and research facilities among others. With this property type, however, it may be harder to estimate demand so you must do your research well when gauging the area where you want to invest.

All types of commercial investment properties come with its rewards and risks, so it’s crucial that you weigh all the pros and cons of each before investing. To start, ask yourself how you are going to finance the property? Is the market viable for the property type you’re planning on buying? How much money can you earn? Do your due diligence before doing anything.

FAQs about Investing in a Multifamily Home

Nice home investmentIf you are considering buying a multifamily home, understand that there are two types of multifamily properties: residential and commercial. Residential properties have two, three, or four units, while commercial properties have five or more units representing the investment of the owner.

We look at the second type of multifamily property and explore the most common questions investors ask about it.

What is a multifamily loan?

A multifamily loan works just like a conventional single-family mortgage. It is a type of financing for properties with anywhere from five to 5,000 units, including small and large apartment complexes.

Approval for a multifamily loan largely depends on the value and earning potential of the property, although personal credit and income are a significant consideration.

Who can apply for a multifamily loan?

Multifamily loans are for investors who would like to invest in a property that generates income. Most lenders prefer to approve loans for seasoned real estate investors, although new programs are now available for first-time investors looking into the rental industry.

Keep in mind, as an investor, you cannot live in the property.

Where can I apply for a multifamily mortgage?

Outside of Freddie Mac loans, a Fannie Mae multifamily loan provides the best fixed-rate options for investors. Bonneville Multifamily Capital says this allows lenders to reinvest the money they acquired by lending it to others.

The mortgage can run anywhere from seven to 30 years, and borrowers have the option to avail of a floating rate that can be adjusted every six months after the first seven years.

How can I successfully apply for a multifamily loan?

Lenders prefer borrowers who can prove they can pay back the loan with little risk and operate a financially viable rental property. To do this, you must be able to show a track record of success in real estate investment.

Moreover, for new investors, you need to show appropriate transferable skills, such as employee management, property management, or sales and leasing.

If you are thinking of applying for a multifamily loan with Fannie Mae, get in touch with a loan officer who can help you weigh your options and help you compose a loan application that will guarantee approval.

Use an Online Police Check to Improve Job and Business Opportunities

Man signing up for his business applicationThere are many reasons you need a police clearance certificate. The national police check certificate is as important to individuals as it is to businesses and the government.

Police Clearance Certificate for Individuals

police clearance certificate is vital to individuals, as you will need it for a job application, visa application, adoption application processing, overseas employment processing and state job application, among others. As an individual, you will need a copy of this all-important document to secure yourself a job both in the government and the private sector. Employers need assurance that you are a law-abiding citizen and well disciplined.

Police Clearance Certificate for Businesses

The business community has adopted the national police history check as a requirement when hiring. Businesses and employers are required by law to hire law-abiding individuals of good conduct. The most efficient way to follow this rule is by requesting for police checks, to ensure your adherence to the laws of the land.

The federal government and state governments may also require a police clearance certificate for your business. To ensure the smooth flow of your business operations, get yourself and your business cleared by getting a national police check.

Fast and Easy Application Process

The process of obtaining a clearance certificate has today been made quick and efficient. The application process is now 100% online, where you download the application form and fill in your details. This process is available in all the six states and eight territories of Australia. Online application makes sure that both individuals and employers get this crucial information in time for practical usage.

It is now easy to get police history checks in time. You only need a phone, a tablet or computer with internet connection to access the application form. With an online police history check, you are sure to beat any application deadline.

Reasons for Encouraging Employee Recognition

Motivating employeesMostly everyone likes knowing that they had done something excellently. There is something euphoric about getting praise for giving extra effort. Most workplaces try to reinforce meritocracy but aren't often quite the norm for some reason. The simple yet powerful act of recognizing the good that your people do in your company has the following benefits.

Employees Realize their Value – Employees are important in any organization and showing some love for their good and hard work makes them feel special. Sometimes, a simple note that says “good job” can make an impact. As long as it is genuine and timely, it will be appreciated. This means no matter how much you spend on procuring Employee Recognition Label Pins and how many employee label pins you give away, you can remain out of touch. Employees who feel they are valued in the company are less likely to resign or absent themselves from work.

Improves Relationships in the Workplace – When an employee's work is always given proper recognition, they also feel that they are truly part of a family. This doesn’t just apply to the one being recognized but also with the remainder of your staff who are aware of their co-worker's achievements. They become better team players knowing that each of them has a role to play in the company while everyone does their best.

Creates and Encourages Productivity – Genuine recognition for good work can give a mood boost to any employee. When you show appreciations to every employee, this morale enhancement is passed around and can affect their interdependence. Imagine what your company can do when everyone is doing their best and are happy to do so.

A little appreciation for every staff member can go a long way. If you haven’t been giving recognition to your people yet, now is a good time to start. Make a list of possible awards and activities that will give their achievement credence. Eventually, you will see the profitable and positive effects that it will have on your employees, company and even your customers.

Reasons for Encouraging Employee Recognition

Motivating employeesMostly everyone likes knowing that they had done something excellently. There is something euphoric about getting praise for giving extra effort. Most workplaces try to reinforce meritocracy but aren't often quite the norm for some reason. The simple yet powerful act of recognizing the good that your people do in your company has the following benefits.

Employees Realize their Value – Employees are important in any organization and showing some love for their good and hard work makes them feel special. Sometimes, a simple note that says “good job” can make an impact. As long as it is genuine and timely, it will be appreciated. This means no matter how much you spend on procuring Employee Recognition Label Pins and how many employee label pins you give away, you can remain out of touch. Employees who feel they are valued in the company are less likely to resign or absent themselves from work.

Improves Relationships in the Workplace – When an employee's work is always given proper recognition, they also feel that they are truly part of a family. This doesn’t just apply to the one being recognized but also with the remainder of your staff who are aware of their co-worker's achievements. They become better team players knowing that each of them has a role to play in the company while everyone does their best.

Creates and Encourages Productivity – Genuine recognition for good work can give a mood boost to any employee. When you show appreciations to every employee, this morale enhancement is passed around and can affect their interdependence. Imagine what your company can do when everyone is doing their best and are happy to do so.

A little appreciation for every staff member can go a long way. If you haven’t been giving recognition to your people yet, now is a good time to start. Make a list of possible awards and activities that will give their achievement credence. Eventually, you will see the profitable and positive effects that it will have on your employees, company and even your customers.

Mortgage Terms in Layman’s Terms: What Exactly is Debt to Income Ratio?

Mortgage Loan AgreementDebt to Income ratio (DTI) is precisely what it sounds like. It’s how much debt you owe in comparison to your income. Lenders use this ratio to figure out whether a borrower is capable of maintaining mortgage monthly payments. They use DTI for purchase loans, including refinancing, as well.

DTI could likewise help you determine how much you can afford for a house deposit. Take note that DTI doesn’t measure a person’s willingness to pay, only the potential economic burden of a monthly mortgage payment.

Debt to Income Ratio Explained

Every single working person knows this scenario all too well:

Each month you try to figure out how much money you could keep and how much money you have to pay for all sorts of bills. You have regular bills for electricity and water, perhaps for your Internet and mobile phone, as well transportation costs and groceries. In addition, there’s money you need to pay off your debts — your mortgage, credit card, personal loan, or student loans.

Do you feel that sometimes all your available cash goes into repaying your debts? This means that your debt to income ratio might be too high for you to handle, says money experts and mortgage brokers in Sandy. Put simply, your DTI is a specific number expressing the link between your overall debts each month and your monthly gross income.

How Can You Calculate Your DTI

To calculate, you divide your total monthly payments for all your debt by your monthly gross income. For example, let’s say you put in $400 monthly for student loans and $1,600 monthly on your home loan. This means that you pay off $2,000 for your debts monthly. Your monthly gross income is the amount of your earnings before deductions and taxes — let’s say it’s at $6,000. This means that your debt to income ratio is 33%.

Your DTI is a critical measure of a borrower’s financial security. You increase your chances of securing a mortgage with a better rate if you have a low debt to income ratio. Likewise, a low DTI would allow you to take more financial risks and deal with them better.

Ready to Sell Your Business? Answer These Questions First

Business Partners Shaking HandsUnless you don’t have a dream retirement or you want to work until your last breath, you will think about selling your business one day. When that time comes, you need to make careful decisions and lay a detailed exit plan to ensure success.

The planning process should begin as early as today. Start with answering these questions.

When will you sell your business?

Timing is key. If you have been thinking of selling your business for a long time, then you need to find the best time to do it. Many factors will affect your decision, and these may include your age, the age of your business, your business’s financial standing, and the potential market value of your enterprise. Utah Business Consultants notes that a lawyer or business consultant can help you understand the market and determine the best time to sell.

How much money do you want for your business?

It's not about how much you want for your business; it’s about how much your business is worth. Yes, we’re talking about business valuation. You need to determine what you have so you’ll know what to expect when you sign the deal. The value of your business will depend on your current assets and liabilities, financial status, and many other factors.

To whom will you sell it?

Will you sell your business to an insider or a third party? Your choice will also affect the selling price and your experience. If you sell your business to a third party, you can reduce financial risk and avoid any problems associated with family succession planning. Selling to an insider (a family member or a key employee), on the other hand, gives you the assurance that your business will be in the hands of someone you know and trust.

An Exit Plan is Essential

Selling the fruit of your hard work is one of the biggest decisions you’ll make in your life, and you only have one chance to do it right. Exit strategy planning is important to achieve your personal, financial, and estate planning goals when you decide to sell your business.

When you have an exit plan, you can increase your chances of getting the maximum value for your business, as well as ensure a fast and successful transaction and turnover. The process will be easier if you have an experienced business consultant by your side.

Grow Your Retirement Funds with these Suggestions

Retirement Fund
Preparing for retirement is not always a popular choice amongst younger employees and business owners. This is understandable, given how far into the future you have to be thinking if you start planning your retirement now. However, those who do have the foresight to start investing in their retirement end up more financially stable than their counterparts who are not too keen on planning.

Investing in Property

Apart from your retirement fund, sentinelpg.com.au suggests that investing in property is a good way to start planning for your future. You don’t want to be working all your life, well into old age, but you may want to stay busy. Retired people typically stay healthy and alert longer when they keep themselves occupied doing something, apart from checkers and knitting. In this light, investing in rental property is actually a wise move. You can manage the property when you retire from your regular job.

Earning from Your SMSF

Self-managed super funds are gaining popularity these days. The trend is using your super fund to invest in property. Buying property through your SMSF is something you have to carefully study. Note that when you use your super fund to buy a house, or a group of similar houses of the same cost, you cannot live in that house or those houses. Neither can any of your relatives. The purpose of using your super fund to buy property is to build more wealth for your super fund. Talk to your agent regarding the details of this option.

Starting a Business

If you are not into the property scene, you can also start a business. The good thing about having your own business is nobody will force you to retire at any age. You can quit your day job if the business becomes successful and demands more of your time. You can also manage it with the help of your spouse and grownup children.

There is no better age for starting your retirement savings and plans than today. As soon as you start earning money, you should begin to think about it. Start small, and add to it every chance you get. Not only is this good for your future, but it can also serve as your motivation to begin saving while you’re young.

Larger Super Funds Deliver Better Returns

Super funds in AustraliaA study revealed that Australians are better off dealing with bigger self-managed superannuation funds (SMSFs), as they deliver better returns than smaller ones.

The study, co-authored by the University of Adelaide’s International Centre for Financial Services, claimed that funds with investment balances lower than $200,000 provided less favourable yields. On the contrary, bigger funds offer higher chances of providing good year-over-year returns. Sentinel Property Group mentions a portfolio of properties for commercial, industrial and retail sectors, offering a variety of options for investors.

Lower expense ratios, diversified portfolios and their longer tenure compared to smaller funds are some of the reasons they deliver better returns, according to the report.

Popular Funds

Data from the Australian Taxation Office (ATO) showed that over 30,000 new funds are formed every year, and as of September 2016, more than a million Australians are involved in a super fund.

If you have already set aside money in an SMSF, property investment is a good option to reap good returns. With a carefully devised strategy, investors are often rewarded with huge sums through capital appreciation. For those who prefer to preserve their capital, you can choose to use your SMSF for investments in rental properties. Fixed-income assets are an alternative choice if you want to avoid risk.

Complex Matters

Australia has an intricate set of policies for the establishment of super funds, ranging from initial costs to legal requirements. Some financial planners advised that you should also be ready to spend continually after you decide to create or be a part of a super fund.

Significant penalties also await those who fail to comply with regulations and operate against the law, among other violations. Remember, the ATO keeps tabs on SMSFs especially now that they have become more popular.

While larger SMSFs are likely to deliver better returns than smaller funds, that does not mean size guarantees the success of a fund. Each type of investment carries certain forms of risk, so it is important that you are aware of them beforehand to make an informed decision.

Redeem Your Mortgage: 4 Things You Can Do

MortgageOne of the best feelings in the world is knowing that your mortgage has already been paid in full. So why not redeem your mortgage early on?

A redeemed mortgage is a mortgage that has been fully paid by the borrower. This means the end of monthly payments and the start of full control over your property. And yes, there are ways to do this without waiting for 25 years or so.

Ways to redeem your mortgage

  1. Pay more

Had your bonus for the month? Use it to pay your mortgage. Paying more than the usual is one of the most effective means to redeem your mortgage early on. Easier said than done as you need to manage your monthly expenses, but it is definitely doable.

  1. Pay more often

Instead of paying once a month, paying it bi-monthly would make you finish paying your mortgage at a shorter amount of time. This also means lesser interest rates. Discuss with a Salt Lake City mortgage company on how you would be able to avail this option.

  1. Refinance to lower interest mortgage

Technically, shifting to a lower interest rate would mean paying less for a longer amount of time. Do refinance to a lower interest rate mortgage but keep your payments the same. If the minimum is $700/month in your previous mortgage and the minimum is $500/month when you refinance, still stick with your $700/month payment.

  1. Refinance to a shorter period mortgage

Refinancing to a shorter period would mean lower interest rates and shorter payment period but higher monthly payments. If your monthly expenses allow you to pay more than the usual, then you may opt to choose this method.

Overall, discipline is the key to redeeming your mortgage earlier. Tightening your financial belts for a few months is definitely worth it, if it means being debt free earlier.