Archive for the ‘malady’ Category

5 Reasons Why NOW is the Perfect Time for Apartment Investing

Friday, September 11th, 2009

If you say the word “investing” these days, people tend to shudder and run in the other direction. Investing has become almost a curse word because we’ve all seen our stock portfolios evaporate. What people don’t realize is that stock investing is a self-fulfilling prophecy and the only way many people will survive is by doing something else. I advise apartment investing.

When stock investments do well, everyone wants in and that popularity drives the price higher and higher. But then the market folds and everyone jumps out of the stock because it begins to become unpopular. And because people think the stock will become unpopular, they sell and the stock price falls, thereby becoming unpopular! That’s what I mean when I say that stock investing is a self-fulfilling prophecy.

So, to be perfectly honest, as long as the majority of people think that there is going to be a recession, there is going to be a recession. But that doesn’t mean that money can’t be made. I believe that 2009 is going to be the year of the apartment entrepreneur. Here are 5 reasons why this recession is the perfect time for apartment and multifamily investing.

1. Interest rates are at all-time lows. It used to cost a lot to borrow, but not anymore. If you need to borrow money from a lender to fund your investment, you can get that money for low interest rates. Sure, not everyone can get loans right now, but if you can, you can get money cheap!

2. There is plenty of inventory. Lots of multifamily apartment owners may have jumped in when the market was hot because they wanted an investment but with the market going south, they may not have the time, money, or desire to keep up with the workload. Bottom line? Lots of people are putting their apartments and multifamily investments on the market which drives down prices and gives you more choice.

3. There are more renters. During strong economic times, people want to buy homes. But when the market is weak and homes are being foreclosed left and right, those people need a place to live. That’s an increase of renters for you to fill your apartment with.

4. There is lots of money from investors. People might be scared off of investing with stocks, but they want to invest in something. One of the reasons that the stock market is so low is because people are holding their money out of the market, looking for something else to put it into. The right presentation to an eager audience will help you to find the funding you need.

5. The workforce needs work. Millions of people are out of work and looking for a job. As a successful investor who needs contractors and laborers, you have the pick of a hardworking and motivated workforce. Pay them a fair wage but you’ll benefit because they will work for less than if there were fewer people vying for the same work.

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Should You Avoid Investing In Retail Shares At The Moment?

Thursday, September 10th, 2009

If you keep up with the news on a daily basis you will be all too aware of all the high street retailers that are currently running into financial difficulties, cutting thousands of jobs, or worst still, closing down altogether. The recession is destroying a lot of these established names so should you avoid investing in the retail sector?

Well the simple answer to that question is yes you should. It’s only my own personal opinion but I just cannot see the merits of investing your hard-earned cash into these struggling companies at the moment. When you invest your money you want to be able to sleep comfortably at night confident in the knowledge that your money should grow nicely in future years. However you certainly cannot be confident about any retailers at the moment.

The major problem for these high street retailers is of course the reduction in consumer spending as a result of the credit crunch and global recession, but there is also a more fundamental problem and that is of course the added competition they face from internet retailers.

The whole world of e-commerce has really grown in recent years and more and more businesses are choosing to go online because the overall costs of doing business are greatly reduced. There are no expensive rental costs that you get with high street stores. All you really need is a warehouse and a website where you can take orders.

The implications of this are that these online retailers can charge a lot less for their products and so the high street shops lose custom as more and more people go online to buy the same products at a better price. So when investing for the long-term it’s hard to argue a good case why you should invest any money at all with these high street companies.

The only exception would be market-leading supermarkets such as Tesco and Sainsbury. These have a long record of sustained profit growth and people will always need food of course. These are the only retail companies that would remotely interest me as an investor, but even then I would need to enter at a bargain price and then hold on to them for several years.

You could also argue a case for some of the market-leading online retailers but with so many new companies coming online every day, I would not be entirely confident about investing in these companies either. In five years time some of these same companies may no longer be market leaders and may run into trouble just like a lot of them did during the end of the internet bubble, so for me I see no reason at all to invest in the retail sector at the moment.

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Investing In Your Dreams: The Key to Perfect Freedom

Wednesday, September 9th, 2009

Not long ago, I was playing golf with a friend who is an attorney. Between shots he began telling me how much he detested his job.

“Why?” I asked.

“You have to understand my business,” he said with a huff. “My day basically consists of writing nasty letters on behalf of my clients. Then we get nasty letters back. This goes on for a while until my clients realize how many billable hours they’ve run up. Then they start getting nasty with me. The whole business,” he said with a shake of his head, “is kind of nasty.”

“Why don’t you do something else?” I asked.

From the look on his face, you would have thought I suggested he stop breathing.

“Do something else?” he said. “You don’t understand. I live in a big house. I have two big cars. My wife and I like to take big trips. She runs up big bills. What am I gonna do?”

“I don’t know,” I said. “But it sounds like a big mistake to me.”

The sad part is my buddy is a bright, talented guy. He’s giving up a lot. With his experience and law degree, there are plenty of other things he could do.

But he doesn’t believe this is realistic. Why? Because he can’t tolerate even the thought of a temporary loss of status and income. And, ordinarily, that’s exactly what it takes to do what you really love doing ? investing in your dreams, or what matters most.

As the psychologist Laurence G. Boldt once wrote, “The life spent doing what you love is a different life indeed from putting your life out for hire to the highest bidder. The only way you can say it makes no difference is to say life makes no difference.”

These words hit me between the eyes when I first read them seven years ago. At the time, I had spent 16 years working on Wall Street. It paid well, but I had grown increasingly bored with what I was doing.

I loved analyzing investing opportunities. But I’d grown tired of having the same repetitive conversations with my clients about their accounts every day. So I decided to write about the financial markets, instead… and begin ?investing? in one of my favorite interests.

My coworkers thought I had lost my mind. “Nobody gets to the point where he has all these clients, all these investment accounts, all these assets – and all these fees coming in – and then just walks away,” one colleague told me, incredulous. “If you leave, you’re going to regret it.”

But I haven’t. Not for a minute. If anything, I wish I’d done it sooner. The writer Joseph Campbell was right:

“If you follow your bliss,” he wrote, “you put yourself on a kind of track, which has been there all the while waiting for you, and the life that you ought to be living is the one you are living I think the person who takes a job in order to live that is to say, just for the money has turned himself into a slave.”

That may sound harsh to some. We all have commitments and responsibilities, after all. But that doesn’t mean change isn’t possible. It hurts to spend your days doing something that is not really suited to your talents, especially when you know you could be doing far more than you are.

In a recent MONEY survey, 43% of boomers said the idea of a new job was appealing. “Now’s the time to ask yourself,” says financial planner Sheryl Garrett of Shawnee Mission, Kansas, “do you want to keep doing what you’re doing for the rest of your life?”

Especially when work you enjoy is invigorating. It gives your life meaning and structure. You feel like you’re expressing yourself, making an impact.

As the British historian and philosopher R.G. Collingwood said, “Perfect freedom is reserved for the man who lives by his own work and in that work does what he wants to do.”

Unfortunately, too many folks approach the job market thinking of nothing more than money, security, and benefits. I’m not saying these things aren’t important. None of us would survive long without them.

But for a true sense of fulfillment, there has to be more than just money and security. As George Bernard Shaw said:

“This is the true joy in life, the being used for a purpose recognized by yourself as a mighty one; the being thoroughly worn out before you are thrown on the scrap heap; the being a force of nature instead of a feverish selfish little clod of ailments and grievances complaining that the world will not devote itself to making you happy.”

Some may call Shaw an idealist, a dreamer. Perhaps. On the other hand, this is not a practice round. This is the only life we get. You can work a job. You can pursue a career. Or you can choose a livelihood.

Ultimately, the choice is yours.

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The Good Guide to Great Renters

Tuesday, September 8th, 2009

Given the way things are going with the US housing market, renting is going to be the most viable housing option for many. If you own an investment property that you want to hold onto to, you may be looking for tenants. And, of course, you’re not looking for just any tenants. Any and every landlord wants to find the best tenants possible. The good news is that to be the best there are only a few requirements a tenant needs to fulfill. I would say every landlord is looking for renters who are reliable, who will fulfill the terms of their rental agreement, pay on time, are not disruptive to the neighborhood and take good care of the house. Anything beyond these factors is icing on an already perfectly sweet and satisfying cake.

So, these requirements, they don’t seem so outrageous, and they’re not. But, you’d be surprised to find that it’s not always to easy to decide on who will be most likely to fulfill these requirements, and on a regular month to month basis. Here are some tips to help you along with your hunt for the perfect tenant/s.

TAKE CARE OF YOUR HOUSE AND OTHERS WILL AS WELL:

Consider that before you advertise you may want to invest in some repairs and updates to your property. If you want to attract renters who’ll respect your place and treat it with care, as if it were they’re own, then you need to present it in a well kept, well-loved state. Likewise, you are going to want to know what is in need of repair, and what has recently been repaired before anyone moves in. This aspect is also about competition. Really, you want your rental property to shine in comparison to other properties that prospective tenants are considering. If your tenants think they’re getting a great deal, on a great home, they’ll stay.

BE A DILIGENT SCOUT:

First of all, you want to source out a good pool of folks to choose from. This means some grunt work on your side and some creative approaches to marketing your property. Think about it like a real estate sale. Your marketing and staging should appeal to whatever niche you think your particular property will draw. If it is a real family home in a great family neighborhood, advertise in and around the area, at shops and stores and businesses. There might be a local family orientated magazine or paper. If so, make sure to put in an add there. Obviously, have a sign on your front lawn for those driving through the neighborhood. If you’re advertising on a website and can place some images, definitely do so. Make sure the images are appealing, of high quality and really show off your home and the assets you are marketing. Slip “for rent” signs in other rental building in surrounding areas. You might consider offering a bonus to listing agents, friends or neighbors for successful referrals. Think outside of the box to find as many legitimate spots to advertise your rental property, and in such a way that you feel you’ll draw the crowd you are aiming to rent to.

HOLD AN OPEN HOUSE:

Hold an open house on a weekend. This is a great way to just focus in on your search. You’ll have a chance to see people coming through the home and reacting to it. ( you might get some ideas on what you could do to improve its marketability if you listen in on some hush-hush conversations!) Likewise, open houses for renters, as with real estate open houses can create a bit of pressure on people- such that, if they are interested, they’ll most likely sit down and fill out an application right then and there. Your are adding a healthy dose of competition into the mix. This is also a good way to reign in a captive audience in a more condensed time period. You can then focus on the applications you have and narrow down the options. So, during your open house, have a table set up with pens and applications ready.

APPLICATIONS: COVER THE BASICS

Make sure that on your initial applications you request at least the past five years of the applicants work experience/history. You want to get an idea as to what they’ve been up to, where they’ve been living, how long they seem to stay at each job, what line of work they’re into and how stable that work force is. Check in on personal and professional references. Three of each should be a minimum, and I would highly recommend actually following up with a phone call or e-mail to check in on them. You’ll find out a lot from others.

You application should also request information on their current/ongoing expenses. Do they have monthly car payments? Other loan payments? You’ll need to assess whether or not they can truly and comfortably afford your rental property. An ideal tenant will be able to afford rent, and have room to spare for any emergencies that may arise. After all, in most cases you’re looking for someone who has the stability to stay on for the full term of your contract and beyond.]

You application should inquire about where they are moving from and why they left. Obtain information/contact from their last landlord and follow up with a phone call.

When reviewing applications, know that an incomplete application can be a bad sign. Unless they’ve indicated that they’ll get back to you asap with the particular information, well, it’s best to look to those who’ve followed instructions and given you the information you need to move forward with the selection process. An incomplete application, can be a tell tale sign of unreliability.

MAKE THE PHONE CALLS:

In your conversations with the referees from prospective tenants, the kinds of questions you might ask are:”Are they reliable?”, “Do they regularly show up on time at work?”, “As a landlord, were you sad to see them go?” Remember you can’t really ask personal questions, nor can referees say straight out that someone is a bad tenant, employee or person. But if you ask some indirect, albeit pertinent questions, you’ll most certainly find the information you need to make an informed decision.

THE RENTAL AGREEMENT: ARRIVE ON THE SAME PAGE

When you do decide on a tenant/s, try to schedule a time to go through the rental agreement with them. Clarify areas where there may be some confusion and be specific with expectations, on both ends.

Now, although this may seem like a lot to consider, it’s better to spend the time up front to find solid tenants rather than deal with the numerous issues, and legal problems that can arise with tenants who do not fit the bill.

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Things you could do right now to start investing

Monday, September 7th, 2009

You want to start investing but you cannot find time for analysis and education about investing. If you want to start with investing you should certainly find some time, but in the mean time, here is what you could do right now.

1. Eliminate your debt

Eliminating debt is not a classic example of investing. But I think that should look on paying credit card debts as a kind of investment. The reason for that is the fact that average credit rates is 14% annually. You will have to try really hard to beat 14%, and not to mention that it can be much higher, up to 20 or more percent. Keep in mind that average return rate on US stock market is about 10.5%. Therefore, if you have $100 in your pocket, and you don’t need that money too much, go right now and payout your debt even if it is a small part.

If you have several credit cards, than you should pay out the one with the greatest rate. For example, let’s say that you have three credit cards: the Credit card A with $1000 of debt and 15% rate, the Credit card B with $3000 of debt and 16% rate and the Credit card C with $200 of debt and 18% rate. You should payout the debt on the Credit card C first, and then start paying out debt on the Credit card B.

There is another hint that is general in life: Simplify. That means that you should tend to eliminate number of credit cards in the game. The reason is that you cannot maintain a long list of credit cards. If you have ten credit cards, than there is 10 different debts, 10 different rates and each factor that could be specific is multiplied by 10. Therefore to track what is going on with your credit cards you should check at least 30 and more parameters. It takes time to find all necessary data. Also, if something is too complicated that would lead you not to do it. And not tracking your credit cards is very dangerous.

Does it mean that you should not have any credit card? Yes, almost any credit card generates some expenses even if you don’t have any debt on it. It is much better to have cash instead of debt. On the other hand, life is full of unexpected events, so some kind of cushion in the case of emergency is certainly necessary. So what should you do? Eliminate all your credit cards and take one with the smallest rate and smallest yearly fee. And don’t use it.

2. Quit with smoking and junk food

What does smoking have in common with investing? First of all smoking costs you. You can calculate how much money do you smoke each year relatively easy. Determine how many packs do you smoke each month, multiply that with 12 and with the price of a single pack. And that is not all. If you smoke there is a greater probability that you contract some kind of disease in life, and any disease, even not so dangerous will pull money out of your pockets in the form of medications and in the form of smaller income. And there is more. If you want to buy some insurance, smokers usually pay more for it.

What does junk food have in common with investing? More than you think. Junk food is almost as dangerous as smoking. Eating a lot of junk food leads to poor health and the same problem with money as smoking.

3. Track your expenses

Use your favorite spreadsheet program and start tracking your expenses. Keep it simple in order to be able to do it regularly. Amount, date, and category is enough for the start. The category is your classification of expenses. For example, gas, tires, broken windshield you could put in the car category. One category could be junk food, or eating out or something like that. For some time don’t do anything, just track expenses. After several month you will notice if you need some more categories or to tune your system up. Anyway after several month you could begin with analysis of tracked expenses, i.e. to sum them using your categories. Then you could act on it. For example you could change your car as it might be cheaper than to use existing one.

4. Find a blue chips that allows drip investing

What is he talking about? First of all, blue chips are very large and stable companies. Drip investing is a kind of investing where one could invest a small amount of money regularly. For example you could invest in Coca Cola as low as $10 per month. Ten bucks per month is certainly feasible for anyone. You don’t like Coca Cola? Try Pepsi! Or try Google with “drip stock list”.

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