Smart Investment Solutions For Lazy People

If you’re the type of person who hates having to get out of bed in the morning, then using whatever money you currently have in the wisest manner possible is probably a good idea. There’s nothing wrong with being lazy (I should know), but having this personality trait usually means you won’t get on too well in the working world. Though this can be an issue for some, those with cash to spend should be able to earn an automated income if they have the right information and advice about how to select the right investment opportunities.

Considering this; I’ve spent the last week or so doing some research online, and now feel confident enough to publish my results. You see; some investment ideas will be more suitable than others, and some will obviously involve more work. This is why I’ll try to refrain from discussing the complicated solutions available, and concentrate my efforts solely on explaining the ones you should be able to get involved with for minimal effort. With this in mind, have a quick read through the information below and see if I can inspire you to try something new.

Invest In Local Firms 

Thanks to government initiatives that have been designed to increase the amount of new firms reaching marketplaces around the world, there’s lots of people out there who are trying to raise funds for their new ideas. You’ll find lots of websites online that specialise in linking these innovative people with those of us who have money to invest. So, all you really need to do is select an idea that sounds profitable, inspect the business plan and take a dive into the unknown. Just remember that over 50% of new businesses fail within the first six months, so you’ll need to be extra careful before agreeing to release any funds.

Invest In Precious Metals

No matter what your background involved, putting money into precious metals like gold and silver can be extremely rewarding. You don’t even need to understand how the market works these days thanks to reputable companies who’ve been set up to deal with all the difficult stuff for you. Take a moment to read some reviews and testimonials from similar firms before selecting the one most suited to your current situation.

Investing In Property

Personally, I’d opt for this kind of investment if I had enough capital floating around the place, and so should you. People will always need roofs over their heads, so why not become the man or woman they pay for the privilege? Government housing schemes have been in decline for quite some time, and this means more and more people now have no choice but to rent from private landlords. Sure, there’s going to be a lot of work involved initially, but if you employ someone to look after the day to day management of your portfolio, you should be able to sit back and watch the money roll in within a short period.

Well, that’s all the advice you’re going to get from me today folks. I wish I had time to go into things in a little more detail, but as they say in the business “time is money”, and I’ve got to head out and earn some for myself now.

Good luck with any investments you make in 2014 and beyond!

How To Be A Self-Made Millionaire By Right Investment

Millionaire! So much catchy the word is. Everyone wants to be that but a few can make it to the top. A self-made person, Many millionaires are like that and amazing is their success story from ground zero to siring of a big business empire. They are lucky, many think so, but same you are. Difference is that they never believe in a so-called mediocre life and always try out innovative ideas.

They are very positive about money whereas we, the mediocre people, lack in that attitude. We play defensive but they know how to take risk. That does not mean they put everything at sake, they know what they can afford to lose and only invest that much in the market. Sacrifice your present, reap benefits in future! Simple but effective theory and they believe in that.

Finally, let’s come to the brass talk. How can you be a self-made millionaire? Here is a roster of five simple guidelines that you can follow to become a millionaire. They are safe and have thick chances of being effective.

Software Success

Silicon Valley is a witness how some people have climbed the top by venturing out in software industry. It does not require a tidy fortune to invest, what you need is skill. Many players are there and you can stand tall among them on strength of skill only.

Stock Speculation

From rags to riches! Stock market has made it a reality for many. It is a risky venture no doubt but you should also consider the return that is heavy too. What one needs is to have ability to speculate as precisely as possible. Always be armed with the knowledge of stock movement, national and global political scenario, social stability etc. All these factors have a strong impact on stock price.

Retail Rendezvous

If you are not in hurry to be a millionaire, think about venturing out in retail industry. It is undergoing a booming phase. It is not that you have to invest a lump sum amount; you may sail with a small set-up. Once you save a lot, you may think about opening a bigger store or owning multiple ones in the heart of the city.  Expansion needs a chunk of money and you will build up that much eventually if the business is run successfully.

Restaurant Return

Food and beverage industry will never encounter recession. People will always dine out, thereby giving you a strong reason to step into this industry. However, failure is not unheard in this business zone. Quality and competitive pricing are what will make people come back to your dining corner. Empire does not get built up in a day but if you are passionate about culinary innovation and dish out quality to your customers, your small dining den will soon branch out in many cities.

Glamour Gain

Fashion industry has its own charm. Many millionaires have tried out their luck here and been successful. These days, college-goers and even professionals work as models and make good money from their part-time job.

How to Secure Property Development Finance

Property development can be an exciting venture, but it’s important to remember that it’s not a hobby: it’s a business. Approach it with a mind to making money, otherwise you’ll have trouble in convincing others that you mean business and possibly fail in securing the finance necessary to fund your development.

property development Putting Together a Business Plan

A solid business plan is the cornerstone of any successful property development; it will serve as your manual on making the project profitable, and is absolutely vital in securing property development finance from any lender.

Having a proper business plan in place can help clarify the project in your mind and keep you grounded in your excitement. It should detail all your findings, including every scenario that could impact the sale of the property, and it should highlight all associated costs and pitfalls.

Specifically, you should detail the area of the development, why you feel it’s worth investing in, the supply and demand of properties currently on the market in the area, current housing prices, and land registry figures (information pertaining to the schools, employers and transport in the area).

Your business plan should detail every aspect of the development, from start to finish; it’s your strongest weapon in securing finance and should therefore be easy to read and understand, and provide an accurate vision of the projected profit margins.

Crunching Numbers and Assessing Profit Margins

No matter how much you want the project to work, you’ll be doing yourself a great disservice if you manipulate the numbers in order to secure property development financing. If the numbers aren’t feasible, you’ll be the one who suffers, landing yourself with huge debts and with a monstrous, unfinished project on your hands.

To this end, thoroughly research the viability of the project, crunching all the necessary numbers and realising the pros and cons that go into such an endeavour. It’s imperative that you figure out if there’s a good risk to reward ratio, and whether or not it’s truly worth taking the financial risk.

When costing out the project, there are numerous things to consider: quotes for labour and materials; buying and selling prices; legal costs; loan interest rates; profit margins; and your own living costs if you intend to work on the project full time.

Securing Property Development Finance

Mortgage brokers and banks specialising in property development are your best bet for securing the appropriate finance required to complete the project. High street banks also offer commercial loans for business projects, although they can be harder to borrow from. The first step is to set-up a meeting with the bank manager and have him or her go over your business plan. 

Friends and family with significant savings are also potential lenders, although it’s important to treat the situation strictly as a business venture in order to keep friendships intact. For your part, you should offer good interest rates or a share of the profits. 

Joint ventures are another route to securing finance: by teaming up with someone else in the business of developing property, you can pool your money together and split associated costs; the risks and rewards are shared. If you’re new to property development, partnering with an experienced, successful developer will improve your chances of securing financing as some lenders may be apprehensive, or won’t give loans at all to new property developers. 

However you decide to pursue financing, you must be sure to present a solid business plan with projected profit margins and costs; no one is likely to invest in your development otherwise.

Financing Fees and Criteria

Lenders have strict criteria when it comes to financing property development as it is a high risk, high reward endeavour. They will want to see a real financial commitment from you, to prove you are serious about the project, so you will almost certainly need to own the plot of land outright.

 If you are successful in securing a loan from a commercial bank you can expect to be hit with a number of fees, including: a set-up fee; an exit fee; introducer fees; survey and legal fees; and in some cases, a percentage of the facility. Your lender will most likely loan 50-60% of the development costs, paid out in 4-5 stage payments – each payment being paid out after a site inspection.

If you’re serious about pursuing a career in property development then you must treat every property as a different enterprise. You must be sure to carry out the steps outlined above thoroughly, for each separate project, to ensure it will be worth your time, effort and money.

Cathy Livingstone is a freelance writer with expertise within the business and property development finance arena.

Why the New Mortgage Rules are not all Bad News for Canadian Investors

Earlier this year on July 9th, Finance Minister, Jim Flaherty announced new changes to the mortgage rules. The new measures included shortened amortization periods (30 to 25 years), lowering the maximum amount Canadians could borrow against their home when refinancing (85 to 80 percent), fixing the maximum gross debt service ratio (39 percent) and limiting government backed insured mortgages on homes over $1 million. The main objectives for these changes were to stabilize the housing market and reduce the increasing homeowner debt throughout Canada. After the announcement, many homeowners and property investors were left wondering how these changes were going to affect their investments. Below is an examination of how the new mortgage rules truly affect Canadian real estate investors.

New Mortgage Rules will only affect CMHC Insured Mortgages

First of all it is interesting to note that the majority of Canadians will actually not be affected by these mortgage changes. This is because the new mortgage rules only apply to CMHC insured mortgages and non-bank lenders who use CMHC rules on conventional mortgages. The truth is that the majority of Canadian real estate investors are not taking out CMHC insured mortgages, in fact, only a mere 11% of all Canadian mortgages were insured by CMHC in 2011! There are still a number of 30+ year amortizations (not backed by CMHC) that are available for Canadians.

New Mortgage Rules will benefit the Rental Market

Although there is much concern and speculation surrounding the new mortgage rules, the new changes are actually great news for the rental market. With less people being able to afford a property, more people will be looking to rent, leading to an increase demand for rental property and an upward pressure on rental rates to increase.

Vacancy rates will also go down and real estate investors will enjoy an increase demand of renters. With more people renting, investors can get a steady supply of income from their investment properties. Rental duration is also set to increase, as an increasing amount of renters will be forced to rent longer while they save for a bigger down payment.

New Mortgage Rules will reduce homeowner debt

Lowering the maximum amount Canadians can borrow when refinancing is often left out of the conversation when it comes to the new mortgage rules. Capping financing at 80%, down from 85%, will mostly affect first-time homebuyers and buyers looking to upgrade their current homes. These individuals may no longer be able to afford the more expensive properties, and instead, will have to choose properties that are more within their price range. This will restrict and hopefully reduce the growing homeowner debt problem in Canada.

New Mortgage Rules will increase Canadian Home Prices

The new mortgage rules will have an impact on overall Canadian home prices, especially on its affordability. It is important to note that homebuyers and investors don’t judge what they can afford based on the price of the house, but rather on the monthly payments. With a shortened amortization period of 5 years, monthly payments will increase by roughly 1%. This puts pressure on housing prices to come down in order to balance out the rise in monthly payments. The 5- year change on the amortization period will require (roughly) a 10% decrease in market prices. Below is an example of this:

Say the price of a home is $400,000. Monthly payments on a 30-year amortization will be $1,910. With a 25-year amortization however, monthly expenses will jump to $2,110, an 11% increase in monthly payments. A couple that could afford a mortgage of $1,910 might not be able to afford the new monthly payments of $2,110. Therefore, in order for the monthly payments to stay at $1,910, the price of the house needs to come down by 10%, to $360,000.

Investing in Buy to Let Property in the UK

Buy to let was coined as a term in the UK in 1995, but the practice of taking out mortgages on a property with the express intention of privately letting it had existed for some time before then. The 1988 Housing Act introduced ‘assured shorthold tenancies’ and overrode much of the legislation contained in the Rent Act eleven years earlier, reducing security of tenure for tenants and removing many restrictions on landlords. The prospect of becoming a landlord became more attractive and the number of buy to let mortgages has since increased significantly.

Lending peaked between 2006 and 2008, but the subsequent shrinkage of the market has not been indicative of lack of returns – simply of stricter lending criteria curbing the abundance of loans. Recent years have seen a small but steady growth, as demand from both buyers and renters continue to push house prices and rent up. This progression is particularly prevalent in the capital; Rightmove’s October 2012 House Price Index notes a 6.2% increase in house prices in London over the past year (comparing against a regional change of 1.5%; all regions have demonstrated an increase since September, with only the South East and Yorkshire-Humberside showing a decrease since October 2011). The popularity of buy to let can be attributed in part to its potential yield in both the long and short term; with rent set at 125% of the interest-only aspect of the mortgage repayments, landlords can generally make a profit through rental income (the margins increasing in line with the size of the property portfolio) before selling the property after it has appreciated in value.

As of 2012, the number of buy to let loans in effect stands as 1.4 million (up 17% from last year). Detractors of buy to let argue that the number of properties being bought for private rental is a contributory factor to the continued rise of house prices, but the ratio of buy to let investors to first time buyers over the last decade is less clear-cut in determining a causal relationship; high demand for the relatively low supply of properties in the UK is likely the largest determining factor. Those who support buy to let claim that a greater profusion of rental properties gives tenants a wider choice, and thus higher quality, of properties; this also means that landlords have it easier to attract the ‘right tenants’ for their property.

The average gross rental yield for UK property currently stands at 5.4%, ranging from 3.9% (in Belfast) to as high as 8.4% (in Liverpool). Whilst these figures might not represent as high a return as other investments, property is certainly performing better than the equity market, and demand is unlikely to decrease in the coming years. This means that rent will likely continue to appreciate in line with inflation.

This return is in addition to the tax breaks that buy to let landlords in the UK can enjoy. The UK is very popular with both local and overseas ‘jet to let’ investors because many expenses incurred in the running of a property can be offset against their income tax bill, including professional fees (letting agents, solicitors and accountants, for instance), travel, insurance premiums, mortgage interest rates, repairs and maintenance and losses on the sale of the property.

However, one should bear in mind that property is far more ‘hands-on’ than many other types of investment. Thorough research of an area, including development and local rates, is required, as is knowledge of the target demographic. A sound marketing strategy and an idea of projected monthly income and outgoings are advised. Whether or not a letting agent is employed in the day-to-day running of the property, a landlord needs to be well-versed in relevant legislature and know their rights and obligations.

Written by Brian Godfrey on behalf of TurnKey Landlords, the specialist buy to let mortgage arm of TurnKey Mortgages. TurnKey Landlords provides an expert buy to let mortgage brokerage service and a dedicated advice and guidance resource for landlords in the UK.