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February 27, 2014

5 Reasons to Purchase an Investment Property

Invertment property tipsVenturing into property investment can be exciting, volatile and daunting. It can also be very profitable. Ron Bakir is the CEO of HomeCorp, a large Australian urban planning company that has developed more than 1,500 residential lots across the country since its genesis in 2004. Using his wisdom, here are five reasons why you should purchase an investment property.

Rental Income

One of the biggest benefits of getting into the property investment game is the receipt of rental income. Many property owners rent out their apartment, house or office space to tenants and then simply use the rent money to help pay off the mortgage. Remember to do the maths before you invest and ensure that you will receive an adequate amount of rental income to offset the cost. Ron Bakir and the team at HomeCorp also know the importance of creating supply where there is demand; is your property’s location popular with renters?

Diversification

If you’re a smart, dedicated investor, chances are that you have a diversified portfolio. This means investing your money in different asset classes, such as defensive instruments (fixed interest and cash) and growth instruments (property and shares). By doing this, you are minimising the risk that comes with investing. Think about it: if you have invested solely in shares and the market takes a dive, where does that leave you?

Freedom

Sometimes the simple things in life are the best. When you own an investment property, much like owning your own home, you are completely in control. You get to choose which type of property you will have, which tenants to lease to, what the property will look like and you can always move into the property yourself if need be. Unlike a homeowner, however, you receive the benefit of having tenants to help you make mortgage repayments instead of shouldering the entire burden alone.

Tax Benefits

Depending on your country’s tax system, there may be significant tax benefits if you purchase an investment property. Often, deductions can be claimed for expenses such as interest from any loans you paid, agent fees, depreciation, council rates, advertising, and repairs and maintenance. Ensure that you research this well in order to fully take advantage of any potential gains.

Appreciation

When you purchase something such as a car, over time it will naturally depreciate in value due to wear and tear. Similarly, the furniture and appliances within your investment property will decrease in worth as your tenants use them. Your property may even need repairs or renovations from time to time. The unique thing about property, however, is that it can increase its value or appreciate. This is, of course, if you have chosen your property wisely; if you’re in a property hotspot, your property’s value will skyrocket before you!

Will you be taking the plunge and investing in a property? Or are you a seasoned investor with tips to share? Share your thoughts now by commenting in the box below.

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February 26, 2014

How to Ensure Your Business Is Marketed Efficiently

Business marketing ideasEffective marketing is vital to improving your brand image and generating business, but it’s also important that this is done efficiently. Marketing should balance cost with efficacy in a way that most benefits your business and is most relevant to your market. Here are a few basic elements that will help ensure your business is being marketed efficiently and keeping wasted money to a minimum.

Do Your Market Research

Conducting thorough market research is vital to a successful and efficient marketing strategy. You must determine your target market and assess their wants and needs in a way that will help you appeal to them directly. Your market research will also allow you to determine the best platforms on which to deliver your content, and ascertain the “when and where” that will give you the best bang for your marketing buck.

Target Effectively

Once you have pin-pointed your target market you can build your marketing strategy around them. You need to market directly to your target demographic based on how best to reach them and what appeals to them most. If you can tailor your strategy around this target market you’ll be marketing more efficiently.

Avoid Wasted Reach

By keeping your sights on your target market you’ll be helping to avoid wasted reach as well. With thorough market research you’ll be able to avoid putting money into any advertising that will reach people outside of your target market – wasted reach equates directly to wasted money and inefficient marketing.

Deliver a Compelling Message

In order to appeal to your target market, you must catch their attention and leave an impression with a compelling message that’s relevant to them and their needs/desires. This message should be memorable and simple, and contribute positively to your brand image. A truly compelling message should be able to influence audience behaviour and build customer relationships with the brand.

Build Customer Relationships

Use your marketing to promote interaction between the brand and your customers in a way that will build lasting brand relationships and promote trust. Market yourself in a way that creates a positive brand image for the customer to relate with or desire. Deliver meaningful content and make yourself memorable. Social media marketing and content marketing are at the forefront of this customer relationship-based approach.

Track Your Goals and Measure Effectiveness

Your marketing strategy should include goals and milestones to be reached in order to track the effectiveness and efficiency of your approach. Track your progress toward these goals and constantly monitor the market to gauge the effectiveness of your marketing. If you’re not reaching these goals, it’s vital to re-asses your approach and modify if to get back on track. The failure to reach goals means your approach may be wasting money and this could even harm your brand.

The best way to value for your marketing dollars is to enlist the help of a marketing professional who will stay on top of market trends and advertising approaches in a way that’s relevant to the ever-changing marketing environment. Market Smartly, for example, can help with anything from planning to execution to training to support. Having professionals behind you will help keep your strategy efficient and on track to its goals.

With the right planning and attentive execution, you can turn marketing dollars into solid profits.

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February 25, 2014

Easy Steps to Apply for a Small Business Loan

All about Small business loansBusiness loans are leverage to help your company grow. You can expand in ways otherwise not possible. Business lines of credit improve your cash flow to meet expenses and pounce on opportunities. Meanwhile, equipment financing boosts productivity to meet customer demand.

There are common questions to ask before applying for any business loan. Your chances of approval and ROI will improve with a basic checklist. Being realistic and organized also saves time, which is your most precious asset.
Here is a business loan checklist to consider:

Have Documentation Ready:

Organizing your financials is important for loans or otherwise. A periodic review of your statements gives insight to make informed decisions.

Assume that business lenders will ask for the following:

  • Previous 2 years of Business and Personal Tax Returns
  • 6 months of Bank Statements
  • Current Income Statement
  • Balance Sheet
  • Business and Personal Credit Checks

Best Practice: Ask upfront what paperwork is needed. Providing excess paperwork can slow turnarounds and raise questions. However, having docs ready often has the opposite effect.

Connection between loan and financial review: A restaurant may notice that capital equipment no longer has useful life, in accounting terms. The loss of a write-off (depreciation expense) plus the need to make more food may show the need for equipment loans.

Similarly, youmay notice that a single company accounts for most of A/R. To improve cash flow, you may apply for a business line of credit and renegotiate terms with the client.

Understand the Lending Criteria Upfront:

You can spare time, fees and frustration by knowing what is needed to qualify.At minimum, get a sense of how likely it is your loan will be approved. If you’re a startup and 2 years of business tax returns are required, simply ask about alternatives. A good loan officer will refer you to other lenders who can help.

Be Realistic and Know Your Strengths:

What makes your business a strong loan candidate? Think in tangible terms of what can be documented and proved.
How profitable is your company? Banks like lending money to leverage as growth, rather than last ditch efforts to stay afloat. Businesses have different strengths. A manufacturer may have collateral in terms of equipment, or you may have stellar personal credit to get a business loan.

Know Your Alternatives:

As small business lending expands, loan options for those with challenged credit or unique needs has become more available.

If you were denied, determine the reasons for this. Was it lack of business credit? Your industry? (Bars or nightclubs can be difficult to finance) Not enough business history or income? You can find suitable alternatives based on the answers.

Alternatives:

Business Credit Cards: A business credit card is often easier to qualify for than a LOC. The credit limit is likely smaller, but you establish business credit history for future line of credit needs. Your strong personal credit may qualify for a business credit card. The card will be under your business Tax ID, but backed by a personal guaranty.

Equipment Loans: Capital equipment loans reduce concerns over collateral, which makes qualifying easier. Restaurants, manufacturers and offices may all turn to equipment financing.

Business Cash Advances:An alternative if you don’t qualify for lines of credit or credit cards.

Industry Specific Financing: Lenders who specialize in specific industries may offer options. Bar and Nightclub loans or medical financing are examples.

Best Practice: Ask if there are prepayment penalties, in case the loan is no longer needed or refinancing options become available. It is important to understand fees, interest rates and terms for all loans.

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February 10, 2014

The advantages and disadvantages of Debt Consolidation Program

Debt problem solutionsDebt consolidation loan is a big loan by which the borrower settles the existing smaller loans. The offer is highly beneficial to the borrower. However, the program has negative factors as well. It is necessary to understand the pros and cons of the offer before you opt for a debt consolidation program. The plan is good for certain situations. By consolidating your debts, you are relieved of the stress due to the need to follow different payment schedules. Concentrating on a single payment will help in finding better ways to clear the existing debts quickly.

How does the program help to ease out your stress?

The monthly payments due to the loans get decreased when you choose a good debt consolidation program. The term of the loan is extended and so the amount that you pay is reduced significantly. It is possible to manage the debts that are beyond control. The poor credit loans with high interest rates can be cleared with the use of debt consolidation program. If an individual has various credit card dues with extremely high rates of interest, you can bring your debts under control by accessing a debt consolidation program with lower rate of interest.

With reduced monthly payments, you can make the payments comfortably and avoid penalties for late payments. Since the late payments also affect the credit report it is necessary that you make the payments on time which could be possible with lesser interest rates on loan consolidation programs. You need to take time to search for a program that comes with lower interest rates or else the purpose of the plan cannot be served. It cannot be always easy to get access to a good offer. Before you commit to a debt consolidation loan, you should understand that with extended term, you end up paying more on the loan than it is worth.

An important factor that you should understand the risk involved in the program. Mostly, the debts are consolidated with a home equity line of credit or home equity loan. Since the loan amount can be huge and there are some tax benefits, the offer might seem impressive. But defaulting on loans will result in the loss of the home. Though the credit card loans are very costly, there is no risk for the property as nothing is needed as security for the loans. But the loan consolidation is possible only with some collateral.

With a variety of loan consolidation programs, you have to shop around to find one of the best debt consolidation programs. The offers from the banks or the credit unions are highly reliable sources of debt consolidation loans and you can get good deals. Person to person no credit check payday loans lending sites and online lenders are some of the sources that can give you the offer that you need. If you are not able to decide whether you really need a debt consolidation program, you can consult your financial adviser to understand your exact needs and also to know about the offer that could help you ease out your financial situation.

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February 9, 2014

Different forms of student loans

Student loan debtEducation loan is one of the most popular and well-known types of funding programs just like a mortgage loan. Students who are not able to fund for their education from their own pocket would have to apply for an education loan in order to get the money they require for their education. Prominently, there are two different forms of student loans offered and those include Federal student loans and Private Student loans. Apart from these well known student loans, certain borrowers even choose a personal loan program or a secured loan for their educational need.

But, according to the financial need of the borrower, only federal student loans and private student loans are focused towards serving the purpose of providing financial assistance for the education of the borrower or his or her parents. A detailed analysis of each of these types is as follows.

Federal Student loans

Stafford loan, Perkins loan, PLUS loans, Consolidation loans etc. are the popular types of federal student loans. Of all the different federal student loans, the best pick of them all would be the Perkins loans due to lower costs and attractive benefits, but the number of Perkins loan that get offered to students per year is considerably less when compared to other types of federal student loans.

Subsidized Stafford loan and unsubsidized Stafford loan are the two types of Stafford loans. Both these types are available for undergraduate students and a graduate student would be able to apply only for an unsubsidized Stafford loan. Stafford loans are the second best type of federal student loans.

The difference between the two types is based on the interest rate charged during schooling wherein in the case of a subsidized Stafford loan; the interest rate charged on the loan when the student is studying would be paid by the Federal government whereas this is not the case with an unsubsidized Stafford loan, the interest rate charged while studying would be added up with the loan amount.

PLUS loan type of federal student loan can be obtained by the student as well as dependent parents. Of all the different federal student loan programs, the most used and applied federal student loan type is the Stafford loan. Minimum eligibility requirements, lower interest rate charges, minimum or no additional costs, flexible repayment terms make these loans the most beneficial of all.

Private student loans

Alternative student loan program is a highly risky option for a student. For those who want higher amount of cash to pay for their tuition fee and other miscellaneous expenses which may include books, laptop, stationeries, accommodation, transport etc. would find this option useful since they would be able to get higher loan amount.

With this benefit comes risk as well, since the interest rate charged on the loan would be very high. Lender would not be flexible in altering the repayment terms or any other terms of the loan, so the borrower would have no other option other than managing the risk. A good credit status is mandatory for the borrower to secure this particular loan, if not they would have to find help from a cosigner who possesses a strong financial background.

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