investment

All posts in the investment category

Is a Condominium a Good Investment?

Published May 16, 2009 by starvillanueva

                         
Browsing some articles because I have this question on my mind if Condominiums are really worth investing for? I 19ve read this article that Mr. Colayco a financial advisor has wrote and I find it useful as it answers my question.

Two Similar Emails on Condominiums:

Question #1: 1csir, thanks for all your financial guides…i just want to ask questions about investing in condo…a lot of condo projects are coming up, their selling point is "good investment". may i ask, is buying or "investing" in this type of project is really an investment? what are promises or good possibilities of having this kind of investment? at the current situation in phils, is it really wise to invest in pre-selling condos? 1d

Question #2: 1cMoving towards financial stability that I learned from your books, I’m thinking of purchasing a condominium unit, because not only it’s much cheaper compared to a regular house and lot (here in Metro Manila), it also allows you to choose one that’s near your work.

However, I have these questions that make me skeptical. Is it a good investment? I mean, will the unit value appreciate over time? Will it be the same with the other unit of the same size or will it differ base on the location. Is it the higher the floor the better, or vice versa?

I know that you have a title and all, but is it also true that it will be demolished after 50 years? If so, what happens to your property?

My impression is like this; the floor you’re stepping is the roof of another people. Just like the wall you have, you’re sharing it with someone else. It’s like the ownership is really not established. What happens in case of fire and the building (God forbid) turns to dust? Do you still own anything? I’ve asked these questions to real estate agents but they can’t give me any straight answers. 1d

REPLY:

If you are buying real estate to establish your home, your parameters should be more focused on what is most convenient for yourself and your family. As a home, it should not be looked at as a financial investment. Rather, it should be considered as a life goal. However, if you just want to invest, please make sure that you have carefully analyzed a real estate investment versus other investment options based on your personal financial plan.

If you definitely want to just invest in real estate, choosing between a condominium and a house and lot would use the same parameters in analyzing its financial viability. Here are some of them.

1. location which includes convenience and attractiveness of neighborhood and security.

2. reputation for quality of development of the builder (this is particularly true for condominiums which are high-rise)

3. rules of the association governing the neighborhood and costs in relation to this association

4. your ability to maintain all amortization and maintenance (association, repair, taxes) payments.

If you intend to rent out your condominium, you need to project your income and costs and assume that there will be times when the unit will be vacant and will need repair. Rental rates normally over around 5% of the market value of the condo unit provided rental income is constant throughout the 12 months in a year. Vacancy rates therefore have a very strong impact on the effective return on the rental property. In considering buying a condo unit for rental purposes, you must assume at least a 20% vacancy rate over the life of the property.

The condominium requires you to live in closer proximity to others and that could be difficult. Atthe same time, it gives you better security because you can leave your unit and it will be more secure (if it is a good condominium, of course). It is all a matter of personal preference. There will always be a group that will prefer an individual house and a group that will prefer a condominium.

Many who have cash to invest like to buy condominiums that they will have their children inherit eventually. In the meantime, they believe that the condominium will bring them some income in the meantime plus even increase in value. However, as children grow older, more and newer condominiums will be built. Your choice may not be your children 19s choice.

As a financial investment, condominiums do not generally perform well over the long term compared to stock mutual funds or even balanced mutual funds and other types of securities. Except for a few notable offerings, the costs of owning condominium units drag down the resale value. Physical depreciation of units, monthly membership and maintenance dues plus real estate taxes imposed on condominium owners can be quite substantial over the economic life of the unit. There is also the issue of capital gains tax and the VAT applicable when the unit is sold. All these taxes have to be paid before you can transfer the ownership registration of the condominium unit to the buyer. If you include all these ownership costs and the reduced rental earnings due to the 20% vacancy rate, the percentage net return per year when you sell the unit (assuming you can find a buyer) can be very disappointing. Simply put, the cost of acquiring a condo unit is not your only cost. The cost of ownership and the cost of selling are real costs to the owner. And these generally make condo units marginal investments.

* Source

What Matters Most

Published May 12, 2009 by starvillanueva

 

                                       
The worldwide economy might be recessing for now but no one can stop people from investing their money in the stock market or in other similar fields of

investment. Another way of investing your money is by buying jewelry. One of the reasons why this is so popular is because it’s not a fad, meaning Gold Diamonds are always in. It’s also in our way of life. Wearing jewelry has been a part of some cultures already. Another reason is it’s a low-risk investment because you won’t have to pay a large amount to own a pair of earrings. Should you ever need money, you can always pawn your jewelry to the nearest pawnshop, which is really convenient! =)

 

 

 

But still don’t forget to stay fit and healthy- because, health is wealth. Be conscious and keep track of your condition and do frequent exercises. Keep an eye on what goes into your stomach and make sure to take in only nutritious food such as fruits & vegetables, of course no one wants to get sick!

 

 

Lastly, save money. Save as much as you can. It’s one of the most essential Armour we must all keep in. Put this on top of your list and all else will follow. I’m not saying deprive yourself, of course it’s ok to spend and give some reward to yourself after a job well done but too much is not practical. Be smart to look on the cost of the goods you purchase and as much as possible, avoid spending too much on luxuries.


 

* Do you want to work away from your family or just stay home with your future children while waiting for your income? It’s your choice.
 

Why You Are Not Rich?

Published May 1, 2009 by starvillanueva


Many people assume they aren’t rich because they don’t earn enough money. If I only earned a little more, I could save and invest better, they say.

The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it’s how you treat money in your daily life.
The list of reasons you may not be rich doesn’t end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don’t understand, being financially afraid and ignoring your finances.

Here are 10 more possible reasons you aren’t rich:

You care what your car lookslike: A car is a means of transportation to get from one place to another, but many people don’t view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.

You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

You lack diversification: There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.

You started too late: The magic of compound interest works best over long periods of time. If you find you’re always saying there will be time to save and invest in a couple more years, you’ll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.

You don’t do what you enjoy: While your job doesn’t necessarily need to be your dream job, you need to enjoy it. If you choose a job you don’t like just for the money, you’ll likely spend all that extra cash trying to relieve the stress of doing work you hate.

You don’t like to learn: You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.

You buy things you don’t use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven’t used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth.

You don’t understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it’s only when you learn to purchase good value that you have money left over to invest for your future


Your house is too big: When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.

* Just a Repost

Compounding Money, The Risks and the Benefits

Published April 20, 2009 by starvillanueva


You’ve probably heard people talking about how important it is to compound money. But what exactly does that mean? For new investors, the world of financial jargon can seem a little tricky. However, once you get a few basic terms and phrases down you’re realize it’s not as difficult and confusing as you first though.

Compounding money is a simple concept. Say you start with $1,000 to invest. Over the course of the year you see a 10% investment on your return. That translates to $100 for a total return of $1,100. If you’re taking advantage of the benefits of compounding money you’d then reinvest the entire $1,100. In the next year if you made another 10%, this time you’d make a total of $110, bringing your total to $1,210. The idea is that the more you can invest the more you get in return.

If you invest in options that take a year to return then the benefits of compounding money won’t be fully realized. The key is to focus on fast cycle investments. The faster your investment is paying off, the quicker you can reinvest your profits and the sooner you’ll see big money in your bank account. The quickest investments are typically opportunities to buy merchandise at a low price and re-sell it at a much higher price. Be sure you’re purchasing items that are in high demand and can be sold quickly.

If you’re looking to compound money, all you have to do is reinvest your investment returns as soon as you get them. Your money will grow exponentially and before you know it your investment goals will have been realized.

       * Article Source: http://EzineArticles.com/?expert=Richard_Blaine

 

 

Real Estate Investing for Newbies

Published April 20, 2009 by starvillanueva

 
Lesson One: Avoid the hype

Thinking about investing in real estate? If you’ve got the cash or exceptionally good credit now is the right time. Even for beginners. But aside from money there is one other very critical factor to real estate investing. That is education. The more you learn, the less chance you’ll be swindled. The less chance you’ll avoid other mistakes that could cause a huge financial loss.

The internet can be overwhelming for real estate beginners. So my suggestion is that you start out by going to your local library. Go to the reference section and tell the librarian you’re looking for the most current resources for learning how to invest in real estate. The librarian will likely access the library’s online database and point you to a list of magazines, newspapers, and of course books. But be on the look out for DVDs, audio books, and pod casts. Also ask if the library hosts any real estate buying classes, many do.

Another option is attending real estate investment seminars. I’ve gotten offers to attend these in the mail. My advice: choose carefully. Stay away from those that charge. Also go with a firm plan not to buy anything. This way you’ll be able to avoid sales pitches without feeling uncomfortable. By all means be prepared to take notes. If you bring a tape recorder you’ll be able to capture everything from the speaker, as well as questions from the audience.

Know someone in real estate? Invite them to discuss investing tools and tips with you over coffee. Make sure they know that at this time you’re only interested in gathering information, that way you get solid information instead of a sales pitch.

Where to Invest Money

Published March 31, 2009 by starvillanueva

   

Choosing where to invest money is not an easy task for any investor. There are, however, a few basic principles that can be applied to ensure the maximum Return On Investment, or ROI. Using these principles as a guide will help build a pathway to financial independence.

Diversification is an indispensable risk-management practice. By investing in a variety of different financial products, one investment falling through will not ruin an entire portfolio. The old adage says not to put all of one’s eggs in a single basket. Without adequate diversification, a portfolio is at greater risk. An example a diverse portfolio is one that is invested in stocks, mutual funds, bonds and commodities.

Liquidity is another key strategy. Choose investments that can be liquidated with a minimum hassle. A savvy investor doesn’t want to turn down an ideal opportunity because all of their assets are tied up in other, not as lucrative, ventures. Furthermore, liquidity allows an investor quickly to sell off any investments that are in decline and negate any negative impact on a whole portfolio.

Lastly, consider the Speed Of Return, or SOR, on an investment. One way to build success in the marketplace is to choose investments that pay dividends quickly, then re-invest capital, profit, or both. The sooner a return on an investment is made, the sooner that money can be turned around into a larger investment that has the potential to yield an even larger result.

Follow these principles and you’ll be a savvy investor who knows exactly where to invest money effectively.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

* Article Source: http://EzineArticles.com/?expert=Richard_Blaine

My 1st Real Estate Investment

Published September 16, 2008 by starvillanueva


Last February 2007 I handed 12 post dated cheques to my mom because she’ll give it to the Real Estate Agent for my first property investment. I had mixed feelings doing that because during that time I haven’t seen the location yet. The property is located in Amadeo, Metro Tagaytay (5-10mins) from Taal Vista Hote and Casino Filipinol. This was a pre-sell. This means the property is still under development and should be finished anytime soon. I decided to go after it because the terms were pretty good and because my mom also bought lot there for my younger brother & little sis.


It supposed to be 2 years to pay. Fortunately, I was able to lump sum the amount needed to complete it in less than a year. I felt like I need to finish paying it before I bought Condo sooner or later. (Still looking around) Anyway, if the area in La Excelsa Country Homes develops further and it becomes a prime spot, I might rent it out later. Alternatively, I could sell it later to get some potential income.

 * See my 2nd Real Estate Investment: A Condo Unit in Mckinley Hill – The Fort