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June 17, 2017

Saving Money When Renting, Buying or Renovating

money saving purposeWhether you’re getting ready to rent your first apartment, buy your forever home, thinking of renovating your current one, or anywhere in between, there are many ways in which you can still save money.

Statistics show that more and more people are choosing to rent rather than buy a home. This may be due to financial issues or the desire to remain mobile. However, it does not mean you can’t still use your money wisely.

Consider a professional advisor. They can sit down with you and examine your finances, help you decide whether to rent, or – often for the same cost – invest in a house with a mortgage.

If you choose to rent, you can also save money by selecting a property that comes furnished. This will allow you to recoup some costs by selling your furniture, and lowers moving costs, as a van and movers can be a significant expenditure.

Before you sign any contracts, make sure to conduct a walk-through with the landlord. Point out seemingly minor details such as chipped paint and broken appliances. By taking photos and videos, you could be saving yourself money in the future if the landlord were to claim you were the cause of the damage.

Purchasing your first house or moving into your forever home can be an exciting time. You have scrimped and saved for months or years, but that doesn’t mean your saving work is done.

Research is your best friend. There are a plethora of comparison sites such as Colleton River Real Estate that are easy-to-use and allow you to search based on specific criteria. These include: location, price range, property type, and amenities, to name a few. Most of these sites also provide material such as photographs and video; local information on schools, transport, and house prices; and in some cases, the ability to receive price change updates.

For those who feel capable, you can also save money by giving up the traditional agent. Though it is still a new avenue, when done right it can end up saving your thousands of dollars.

If you are already close to living in the house of your dreams, sometimes renovating can be the right choice. Once again, research will be your saving grace.

Get multiple quotes, make sure everything is in writing (including differentiating between labor and material costs), and don’t be afraid to haggle or ask for a price-match. Always use a company that is fully registered and licenced. Check with your local laws and regulations before beginning any work, to avoid your work being demolished at your own expense.

At a time when anxiety is high and all of this might be going over your head, it’s important to remember that, whichever route you choose, there are ways to save money. Take your time, and enjoy this new stage in your life.

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June 10, 2017

Time to Honor your Parents by gifting them a House

property to giftNo matter who you are and where you are, you can never fully repay your parents for all the care, love and sacrifices that they have made. Isn’t it?

But increasingly, many people who have already taken care off their financial responsibilities (like buying a house, paying for children’s education, etc.), are honoring their parents by gifting them a house. Also, father’s day is around the corner.

This is indeed a great gesture that shouldn’t be only evaluated from the financial angle.

Gift or not, there is no doubt that house purchases are major decisions. And they cost a lot of money. But if you too are planning to gift your parents a house, then it shouldn’t be a problem as home loans are easily available at very low rates. Ofcourse you need to have a good credit history and a reasonably good repayment capacity to avail home loans.

But even before getting into the financial aspect of the house purchase, you need to be careful before selecting a house for your parents. More so if they would be living in that house.

Any house that is to be occupied by senior people should be built keeping in mind the ease-of-use from seniors’ angle. Like if you are looking to buy a flat, then it should have the lift facility or it should be on the ground floor. To ensure proper ventilation and lighting, its better to opt for a house/flat that has more open windows/balconies.

Security is another factor while selecting a property for parents. If the flat being considered is in a residential society, then security aspect is taken care off. But if it’s a standalone house, then you need to think about how secure would the property be, if the parents were to live there alone. Of course all these factors will reduce the number of options (properties) that fit all your criteria. But that is necessary considering the limitations that seniors have.

So all in all, once you have taken care of most of your financial responsibilities, go ahead and surprise your parents with the biggest gift of their lives.

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December 16, 2016

NPS and How to Maximize Asset Allocation

asset allocationsThe National Pension System (NPS), introduced by the Indian government in the year 2004 is mandatory for all government employees except the armed forces personnel.This scheme was extended to the private sector in 2009. It is a portable retirement savings account, which can be efficiently used to provide financial security to senior’s through a pension income.

This scheme offers benefits such as tax deduction of INR 1.5 lacs under section 80CCD (1) of the Income Tax Act (IT). An additional tax deduction of up to INR 50,000 under section 80CCD (1B) of the IT Act is also available. Subscribers also have the flexibility of choosing asset allocation between equity, fixed income instruments, and government securities.

NPS is known as a defined contribution scheme because returns under this scheme are market driven. The NPS interest rate changes based on the performance of the market and the asset allocation chosen by the subscribers.

Asset allocation under NPS

Funds invested in NPS can be invested into 3 types of assets namely equity, corporate bonds, and government securities. There are two investment options available under this plan;auto choice and active choice.

Under auto choice, funds are automatically allocated in a pre-determined proportion based on the age of the subscriber. For example for subscribers under the age of 35 years, funds are allocated as follows: 50% in equity and balance amongst corporate bonds and government securities. As the subscribers age, the exposure to equity is reduced and investment in government securities increase.

Under the active choice option, subscribers may choose the asset allocation as per their preferences. The NPS scheme allows subscribers to allot upto 50% of their contributions to equity. Subscribers may use this option to their advantage to maximize the potential returns. For instance, an Investor approaching retirement age (between 45 to 50 years) may opt for a conservative allocation by investing a substantial portion of his funds in government securities.

Maturity and Annuities

The primary objective of NPS is to create a corpus that is used to buy an annuity plan for regular income during the post-retirement years. At the age of 60, the subscriber may with draw a maximum of 60% of the funds as a lump sum. The remaining corpus is used to purchase an annuity that will provide regular income to the subscriber.

Subscribers may choose not to withdraw any funds and use 100% of the corpus to buy an annuity. However, if the corpus at the time of exit from NPS at the age of 60 years is less than 2 lacs, the subscribers may withdraw the entire amount in lump sum. To determine the potential income, individuals may use an online pension plan calculator.

Joining NPS

In order to join the NPS scheme, the subscribers must submit the NPS application form, along with Know Your Customer documents to a Point of Presence (POP). Upon submitting the documents, the subscribers are issued with a Permanent Retirement Account Number (PRAN), T-Pin and I-Pin. Subscribers are informed of their PRAN application status via email and SMS. They may also know their application status by contacting the issuing bank. However, the subscribers may get in touch with the Central Record Keeping Agency (CRA) which manages the issuance of PRAN, in case the PRAN card is not received.

NPS is focused on offering financial security to the individuals after their retirement. The flexibility available for investors to allocate their contributions in different asset classes allows them to maximize the returns and accumulate a higher post-retirement income.

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February 11, 2016

Barcelona an Attractive City for Investments on 2016

estate investments in barcelonaDesigning stands for exhibitions in Barcelona has become a lucrative business in a city that has become one of the most attractive destinations on the Mediterranean for events. Plus, it’s definitely a city we should keep a watchful eye on, in terms of investing.

Despite its turbulent political situation, Barcelona has remain in the last year an attractive destination for events and 2016 seems to keep on that track.

It has been ranked number 12 by the Telegraph on the list of European cities with the best investment prospects in property. If you are looking for foreign investments this year, you might consider take a look to Barcelona.

Besides the events and huge summits like the Mobile Congress that will start in a couple of weeks, the city has grown strong in other areas like:

Fashion

Home of famous international brands like Mango, Custo Barcelona or Desigual, the recent Barcelona fashion Week (080 fashion) demonstrated that fashion and textile industry is strong not only in the city bit in Spain.

Startup Hub

Barcelona has struggle in recent years to become a leader on entrepreneurship and independent initiatives, and under that principles it struggled to attract a massive event such as the Mobile Congress.

Barcelona wants to be known internationally for more than tapas, Gaudí and soccer, it wants to be consider as one of the main tech hubs in the world like London or Silicon Valley, and so far it has succeeded attracting a different number of big startups to open offices in the city: Airbnb, Uber, Booking or Amazon are a few examples of big multinationals that have recently open offices in the city.

On 2015, Barcelona´s tech startups perceived 60% of the funding destined to these types of companies in Spain, making it the main technology hub in the country and an interesting destination for investors.

Barcelona´s startup ecosystem is composed mainly of e-commerce, videogames companies and classifieds that attracted only last year 44 venture capital funds, a reason to believe there is something going on on this sector.

Tourism

Chinese and Russian tourists always include Barcelona on their routes, because is a city that has everything: culture, beautiful landscapes, soccer and shopping. Investing in luxury shopping in Barcelona might be very profitable considering the increasing interest the city is generating among Chinese tourists, the top global expenders according to a recent survey made by Business Insider.

La Roca Village, a luxury shopping mall located on the outskirts of the city, has arranged logistics that include a non-stop private bus that will take the buyers to the doors of the shopping mall and will bring them back for a 12 euro fee to the center of Barcelona.

Although a bit saturated, tourism is another possible way of investing your money in this city, which involves not only tourist operators or hotels but has also to do with luxury spas, accommodations and transportation.

Real Estate

If you are thinking on investing on real state on a foreign country the timing couldn´t be better. Real state prices are slowly starting to rise after the economic meltdown that almost finishes with Spain’s real state industry, and Barcelona offers new attractive projects in exclusive areas that you might consider.

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November 8, 2015

How to Exit a Commercial Property Lease without Making Mistakes

Property lease agreementThe business environment in most cases is extremely dynamic and fiercely competitive. It is not unusual for business to fold up even after making a great start. Many retail businesses need to keep on experimenting with location, and hence may be found to be closing down one store only to open up another one somewhere else. The reason for wanting to terminate commercial property leases can be varied; the business at that location could be bleeding money, or the demographics may have changed substantially, or the competition may have been too hot. Businesses need to enter into commercial leases for property all the time and may also need to foreclose them a lot many times too. Before walking out of the lease, you should carefully consider a number of things:

What Do You Really Want?

Closing a business at a particular location could often be the solution that is obvious but one that is not necessarily always right. Before even attempting to discuss the lease termination, be sure that you have considered every option available to you. If the reason for moving out is a need for more space, then your landlord could come to your rescue with offer for a fresh space and facilitate the lease termination. It is also important to evaluate if the necessity of terminating the lease is born out of personal circumstances rather than commercial ones. It is important for you to understand the real reasons for the change as this will give you a platform for effectively negotiating with the landlord.

Quantify Lease Termination Benefits

The option of terminating your lease can only be beneficial if the savings you get out of it is more than the compensation required to be paid to the landlord. The only way you can arrive at a rational decision is if you can quantify the value accruing to you so that you do not end up paying more than what you are benefiting by. One way of calculating the benefit is by finding the difference between the net profits expected to be delivered by the new location over the old one. If the reason for lease termination is to get time to attend to personal issues, then you would need to establish if the monetary loss on account of the termination is more than offset by what you are trying to achieve after you close down your business.

Identify the Landlord’s Financial Impact

To ensure that you are able to negotiate to good lease termination it is also necessary for you to establish the impact of the termination on the landlord. The most obvious is that he would lose out on the lease rentals till such time he can get a new tenant to occupy the space and start paying the rentals. If the business environment is down, then he may not get the same rental as what you had been paying, however the opposite could be equally true if the space is commercially attractive. Lease termination negotiation goes better of you can get an idea of the redeployment opportunities available to the landlord.

Compensate Your Landlord

Among the ways you can add value to the solving the landlord’s predicament is find creative solutions to what the landlord could do with the space becoming available. If you have been able to assess the location constraints that led to your business failing and how other business can thrive in the same property, you may be able to convince the landlord to change the usage of the space and get a better income stream. You could also tap the local real estate brokers for market information, including the duration that the landlord is likely to take to find a new tenant and the sort of rentals he can expect to derive out of his property. You could also try and identify a prospective tenant for him who can take over your lease. There are a number of internet resources that you can take the assistance of to locate a prospective lessee.

Nancy Mulligan is the senior business reporter at one of the top financial dailies. She periodically writes on trends in commercial real estate and financing. She also consults for leasequit.com.

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