Sunday, July 27, 2014

Why investors choose real estate

Real estate investing tips
Americans spend near 30% of their income on housing

Real estate investing has long been considered a more stable way of generating a return on capital and/or income stream. This is partly due to the relative consistency of the property market, but also to federally insured property loan programs and accommodative monetary policy.

Since shelter is a primary human need and because Americans spend around 30% of their after-tax monthly budgets on housing, allocating money for property is often a good idea over the long term.
How can property be invested in?

Real estate does not have to be invested in alone. Real estate investment groups and real estate investment trusts allow individuals to pool their money in order to make larger scale property purchases together. What is more, REITs pay dividends on real estate proceeds, which makes them particularly good for generating income cash flow via capital.

Who can invest in property?

Reasons to invest in real estate
Equity gains increase collateral
Anyone with some extra money who is looking to diversify their asset allocations or seek out a relatively stable return on investment can invest in property. For those seeking to benefit from the experience and know how of professional property resellers, additional investor opportunities are possible.

What are the advantages and disadvantages of property investing? 

Depending on when and where a property is purchased, acquiring a net gain often takes time. Generally, the longer capital is invested in property, the better the chance of price appreciation. 

There are also risks associated with real estate investing such as undisclosed maintenance or repair issues. Moreover, if major repairs are needed and an outstanding mortgage exists on the real estate, then the potential costs could far outweigh any financial benefits. 

The following table illustrates some of the potential benefits, pitfalls and hazards of real estate.

Knowing about local and regional real estate trends also helps maximize the potential of a good property investment. For example, in and around Silicon Valley, California, the price of real estate has skyrocketed per CBS Moneywatch. These increases in price are due to an imbalance of supply and demand from tech professionals and other home buyers. Purchasing properties in areas with high levels of economic activity and projected business growth helps ensure a wise asset allocation. According to data from Zillow, some areas that have had traditionally steady to strong real estate returns are listed below: 
  • Metro Washington D.C.
  • Silicon Valley, California
  • Manhattan Island, NYC
  • Dallas-Fort Worth, Texas
  • Orlando, Florida

Real estate investing involves a substantial amount of financial planning, negotiating and market research. Although it is not for everyone, property investing does present a chance to diversify asset allocations and hedge against higher risk investments such as stock or options contracts. In any case, carefully evaluation of the real estate market and individual property units prior to investment is always prudent when attempting to limit risk and maximize return on investment.

Images: 1. MarkMoz; CC BY 2.0; “New Home”; 2. Merlin2525;, US-PD "House"

Saturday, July 26, 2014

Help finance Moneycation at Kickstarter

Hi everyone, and thanks for reading Moneycation. The current business model being used to provide you with all this valuable information is somewhat unsustainable. For this reason alternative funding sources are being sought; one such option being a 30 day campaign at Kickstarter. If you would like to contribute, please feel free to do so, anything from $1 up will be one step closer to the financing goal.

2014 interior design trends

Home showcasing and interior design tips
An appealing and high demand interior design layout helps a home sell

By Kelly Gilmour-Grassam

Whether you’re a keen follower of interior design trends or you are just looking for some inspiration when redecorating your home, keeping an eye on the latest looks is important to make your home stay at its best. A few key adjustments to the décor can really transform a room, for both modern and traditional properties alike. 2014 has seen some wonderful developments in interior design that can add heaps of flair, personality and taste to your décor. So let’s take a look at some of the trends that have come to the fore this year.

Warm metals

Revamp your furniture and doors by trading your stainless steel, silver and golden metals for warm ones such as brass and chrome. These traditional metals look effortlessly classy and are right on trend for interior design 2014. By replacing your door knobs, taps or cupboard handles with brass or chrome ones, you can give your home a fresh look, with minimal redecoration.

Bringing the outdoors, indoors

Although you might be a little put off from this trend if you have a flick through an interior design magazine or visit a show that takes it to the extreme, hear this one out. By bringing a few elements of nature and the garden inside, the effect is a rustic and harmonious finish to a room that can complete the décor. For example, a shabby chic watering can filled with wild flowers or an upcycled wooden piece of furniture will inject character into a room. 

Another option is to maximise the use of external doors to visually bring the outdoors inside. French doors really open up a room with light and the colours of the garden, if you have a great exterior to showcase.

Bold colours and patterns

No longer do you need to fret about co-ordinating your beige carpets with your brown sofa and pine doors. Colour has exploded onto the interior design scene, and with it a kaleidoscope of patterns to throw personality into your home. If you’re redecorating a room, don’t hold back from indulging in your favourite colours and mix and matching furniture, doors and metallics. 

A few key colours in vogue this season are bold colours such as hot pink, mustard yellow, bright blue and emerald green. Meanwhile floral designs and tribal prints are leading the way in the pattern department. The complement the bright colours and warm metals, dark woods are becoming increasingly popular to emphasise their richness.

When you go out with the old and in with the new this year, whether you’re redecorating completely or touching up a room, get creative with your home design. As a seismic shift away from the classic beige and stainless steel look has transformed the trends for the season, seize the opportunity to put your personal touch on a room. From doors to furniture to carpets and walls, there’s plenty of ways to make a room your own with the latest trends! Take the inspiration and make some change now.

About the author: Article by Kelly Gilmour-Grassam, weaver of words and lover of lyrics and other creative things.

Image license: PCross; CC BY-S.A. 3.0
"Postmodern Interior Design 1"

Friday, July 25, 2014

6 keys to better management of finances for small businesses

Small business financial management
Clear business plans help optimize and preserve capital
By Phil Steel 

Management of finances is the engine that keeps small businesses running smoothly. That engine needs regular tune-ups to make sure that the business doesn’t fail when the going gets tough. Don’t ignore the clunks. Pop open the hood and discover six keys to better management of finances for small businesses:

1.    Have a clear destination

Ensure you have a business plan, one that is backed up by financial targets, budgets, profit and loss, and cash flow forecasts. That business plan also includes your market differentiation – or unique selling points for why consumers should choose you over a competitor.

Unsurprisingly, those who complete a business plan are more likely to secure a loan, secure investment capital and see growth in their business. If you have a clear destination, you are also less likely to react in a knee-jerk manner to short-term problems.

2.    Know your financial status

Make sure you know how much money you need to make in order to break even and how much you have to spend to run your business on a daily basis. 

Don’t put off paperwork: organize receipts, monitor sales and stocks daily, and keep records up to date weekly. Failing to do this, could mean a mess at tax return time. If your finances are disorganized, you may lose money by forgetting to invoice a customer or by paying interest on an overdue bill.  

Monthly tasks can include reviewing sales against targets and reviewing bills to see where cost savings could be made. Also, make sure you check your accounts payable and the number of days these accounts are outstanding. Sometimes the gap between when money comes into the business (invoices are paid) and money goes out of the business (rent, bills, employees, etc.) can push profitable businesses under. Careful book-keeping and accounting will be your savior.  

3.    Control your stock

Buy only the stock you need, so your working capital is not tied up unnecessarily. According to a 2012 study of small US businesses, poor inventory management is #4 among the reasons why small businesses fail (after lack of experience, insufficient capital and poor location).

4.    Reduce expenditures

You have control over the fixed costs (property, equipment, etc.) so try to reduce them, without reducing customer satisfaction. For example, try working with free and open source software, instead of buying expensive, proprietary software. Or, try virtual meetings via Skype, instead of travelling long distances.

Similarly, avoid large capital expenditures until your business is firmly established. For example, rent a storefront, rather than buy a place. Reimburse mileage for employee car usage at work rather than purchasing a company car. These options help reduce regular business costs and don’t require you to invest large amounts of capital upfront while the business is less secure.

The alternatives, although appealing, may be too big of a big financial risk to small companies in the first few years. Among to the same US study, over-investment in fixed assets is #5 among the top 10 reasons why small businesses fail.

5.    Don’t spend. Invest

Choose where you do spend wisely. Think about whether the purchase will directly help you increase your business or quality of your work. If it does, it might be a worthwhile investment.
Expenses that could help you increase your business include a well-designed website to help you promote your business, a visible blog, a booth at an event where your target audience will be, or smart sponsorships in your community.  

For greater quality at work, you could invest in some help: administrative, financial or service area-related. The result can be increased business productivity and better organization. Attending a conference related to your business can also help increase your focus and give you new product/service ideas and business contacts. Lack of experience is the #1 reason why US small businesses fail. You don’t have to go it alone and you might be better off investing in some help.

6.    Don’t bury your head in the sand

Choose to chase debts and work out taxes so you meet the tax deadline and don’t lose money paying interest. At the first sign of trouble, get financial advice! Don’t even wait until then but seek financial advice at any time from your bank advisor or a financial consultant.

About the author: This article was written by Phil Steel, an outsource consultant  who offer  services like bookkeeping, accounting, audit, payroll management, and much more, for fast growing companies to meet their financial needs.

Image: Pixabay, US-PD