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Income Property Investing - The Cap Rate

For years, the Capitalization Rate of an income property has been the standard by which properties are analyzed and valued. However, the hypotheticals accompanying Cap Rates leave the door open for misguided investment; such misdirection may only enhance the bitter flavor of real estate succotash. Let's be thorough because to do so will build a divide between the successful and the bellyachers. Now, how have Cap Rates served as masks of profitability? How can investing be more appropriately assessed? Let's get started.

What is a Cap Rate? Cap Rate is assessed by taking the net operating income from a property and dividing by the value of said property.

CR = Net Operating Income / Property Value

Now, net operating income is, at best, an estimation and is supposed to be the income after fixed and variable costs are subtracted from the revenue (rent collected). However, these are often calculated poorly and do not represent the true net income on a property. In reality the Net Income is:

Rent Collected - (Loan Payments + Property Insurance + Maintenance Costs + Property Tax + Property Management Fees) = Pre Tax Income

Pre Tax Income - Income Tax = Net Income

One, or more, of these variables is typically left out and is not calculated with any income tax. Also, Loan Payments are not included in operating expenses; however, it is, in reality, the largest expense of owning and operating a business around income properties. Okay, let's get specific; unless an investor is purchasing the income property with all cash, s/he is placing a downpayment as a means to secure an asset and a liability. The asset is the equity in the building + the revenue stream, and the liability is the payable amount on your loan (your loan payments). It is extremely important to weigh the quality of your asset against the burden of your liability. This is something a Cap Rate is simply incapable of consistently accomplishing. Furthermore, the Cap Rate is based around the value of a home, but it never actually interprets your initial cash outlay as the basis of the investment. The initial cash outlay is the downpayment + any other purchasing expenses (loan origination, attorney fees etc.).

When is Cap Rate useful? Cap Rate can be an appropriate and comprehensive figure that truly asses an income property's strength, but typically in all cash purchases. That way, the figure is base around a true net income and a true cost (or value) of the property. What it still ignores is the effects of rent not collectable or late rent. Also, it assumes the asset is entirely liquid as if to judge it from an opportunity cost standpoint. I.E. the rate of return on the property as compared to a rate of return readily available elsewhere. However, most property is not purchased all cash, so the Cap Rate will have natural follies. Now, Cap Rates derived from your financing terms, initial equity investment, and loan amortization can provide a fair estimation of what the value of the property actually is to an individual investor. However, the figure still ignores variables such as tenant quality. So let's get a bit more comprehensive, while not getting too finance-ish.

How should I value property? I call it "Pro Forma Analysis," and essentially, it serves to encompass all financial variables, while observing the ramifications of deviating from what is expected as revenue. It is critical to know what financing terms are available to you in order to adequately approach this type of analysis, so get to a bank and figure that sucker out. Next, and this is a personal preference, I always base investment quality off of the amount of money in the pocket, meaning I include all forms of taxation into my estimations, never leaving my evaluation without considering after tax return. To the numbers:

You must know the exact initial cash outlay on the property, including downpayment on loan, legal fees, loan originations costs, and commissions paid. For example: A house purchased for $100,000 with a 20% downpayment, 1% loan origination fee, 1% legal fee, and a 5% commission that is split between buyer and seller.

Initial Cash Outlay = $20,000 + $1,000 + $1,000 +$2,500 = $24,500

Next, you must find out Cash Out-Flow which includes loan interest expense, property tax, association fees, prop management fees, maintenance, and insurance costs. The loan is interest-only at a 6% rate on an $80,000 loan, the property tax in the area is 1.5% of assessed value, the association fees are $300 annually, the maintenance is $1,200 annually, and the insurances total $300 annually.

Cash Out-Flow = $4,800 + $1,500 + $300 + $1,200 + $300 = $8,100 annual

Third, you must find your Cash Inflow at your estimated 100% occupancy/payments. This includes the rent income plus any other types of income the property may generate (parking etc.). In our example, the rent is estimated at $1,000/month.

Cash Inflow = $1,000 x 12months = $12,000 annually

Now, the investor must find the annual pretax income = cash inflow - cash outflow

Annual Pre-Tax Income = $12,000 - $8,100 = $3,900

The pre-tax return can now be calculated in terms of the initial cash outlay by dividing the pre-tax income by the initial cash outlay.

Pre-Tax Return = $3,900 / $24,500 = 15.9%

If your income tax rate is 20% than you actually only keep 80% of the income for all intensive purposes, so now the after tax return can be calculated by taking 80% of the $3,900 income and dividing by the initial cash outlay.

After Tax Return = (.8 x $3,900) / $24,000 = 13%

You have found that at your expected revenue, you will return 13% on a perpetual basis, and for these purposes, the figure is representative of a perpetuity because when sold, it will be sold as a perpetuity to the next investor. Regardless, these revenue streams, though they may change are calculated with perpetual return, and sold/priced as such.

You must recalculate the return when the revenue stream changes. The stream could change for multiple reasons, mainly vacancy, but there might also be a rent adjustment. Vacancy will affect expenses by removing some (maintenance) and adding others (advertising, etc.). The effects of vacancy and occupancy on expenses are a different story told a different time - but maybe you are already familiar. It is important to note what expenses are fixed, regardless of occupancy; these are typically the largest cash outflows (Loan Interest, Property Tax); however, some things may dissipate, such as property management fees. You may mitigate your revenue by aligning different revenue streams next to one another. What are the effects if you are only able to secure 50% of the rent. If purchasing a single unit, and rent is not attainable at a given price, than you must lower the price in order to secure some type of income. Let's say only $500 is attainable in a given year, but there is no effect on the costs, as the unit is still occupied. This suggests a cash inflow of $6,000 and the same outflow of $8,100, rendering a loss: ($2,100). As a percentage it is a loss of 8.5% annually. Lets try 75% of expected rent: $9,000 revenue. This leads to an after tax return of $720 - a 2.9% annual return. In fact, you must seek rent at a minimum of $675 dollars in order to break even. Comparing these figures side by side show that the risk of loss due to vacancy is significant. So, it's a property that could potentially corrode your real estate portfolio, although initially it looked promising - 15.9% pre-tax return. How about this: the cap rate would have calculated out at just under 12%, as most agents would advertise. Sounds good at first, right? A cap-rate at 12% suggests the property is capable of "paying for itself", or capitalizing, in 8.33 years. Wow! That could be catastrophically misleading.

In our discussed case, it shows how the strength of the asset is compared to the burden of the liability. Though treading through such an example could be insufferable, it assists in showing the ramifications if risks are recognized in real-estate investing. It is important to take note of every variable affecting the income to you by assessing your debt obligations and how your revenue stream stacks up against them. Now, this is not a final, entirely comprehensive approach to real-estate investing as a whole. Things differ: the loan may not be interest-only, in which you would be required to amortize the principal payments on the loan and adjust the interest expense accordingly, but trading perpetuities within 10-year horizons, is the best way to remain sustainable. In such a manner, I typically suggest interest-only loans, if attainable, as I see income-property investment as a means to purchase a stream of cash flows more than purchasing an actual piece of property. In that way, I can observe the property objectively as a cash-flow investment (which is what it is in all reality), and base the value of the investment off the stream of cash I own. The property/structure/land is only a conduit by which I asses a cash-flow, hardly even considering it as owned wholly by the investor - cause it 'aint. Any sought after gain in value of the property will only increase property taxes, reduce liquidity, and sully the initial investment. Not to mention, the said "gain in value" would likely be corroded by capital gains tax and commission paid to the agent/broker. The "Pro Forma" approach is a more comprehensive one, allowing you to recognize the true value to you, while observing the consequences of deviating below your expectations from the property.

Tony Salloum

Tony is the Director of Business Development for RentPost http://rentpost.com, an online property management software company that leverages its software as a resource to assist with the issues Tony writes about. To experience how Tony and RentPost simplify the worlds of real estate investors, property managers, landlords, and tenants, he invites you to visit http://rentpost.com.

Residual Income - A Real Life Example

Ah, residual income - easy money. Well, not quite, unless you look at the long view. It can take a lot of effort to create streams of residual income. But since this is income which continues to come in long after your work has ended, it might be considered easy for the amount you make.

A little over years ago I decided to make a web site about removing stains from carpet. Not knowing that much about the subject, I bought lunch for the owner of a carpet cleaning company. In return, he gave me some tips on how to remove various stains, and how to care for carpet in general. I asked questions and took notes throughout lunch. I later made a fifteen-page web site from those notes.

It took a week to build the site initially. Twice over the last couple years I have spent a few hours updating it, so I might have 50 hours into the whole project. I have left the site untouched for as much as nine months at a time, and as I write this, I can't remember the last time I even looked at it online.

The result was a site that still generates about $200 most months, from automated advertising and affiliate programs that don't require any attention. This is residual income at its best. I put in the effort up front, but still paid every month years later. When my wife and I visit family in Ecuador, the income keeps coming. Some of our web sites do much better, but this is a great example of residual income, because it requires virtually no attention. Wouldn't you love to have a couple dozen web sites like this?

Residual Income - Other Examples

The idea is income that continues after your efforts are done, and without much if any additional effort on your part. You may not like the idea of making web sites, so what are the other ways that people do this? Here are a few examples of others who receive residual income.

Real Estate Investors - Buy a strip mall, hire management, and have the cash flow deposited into your account - a classic form of residual income. Apartment buildings and rental condos are other possibilities. But be sure there will be enough income to cover management fees. If you have to manage it yourself, you just bought yourself another job.

Inventors - This could be a difficult, but fun one. Inventions are often licensed to companies, which means that as long as they keep selling, the inventor has regular royalty fees.

Writers - Authors typically get about 5% of the retail price of a book, and those checks could keep coming for decades. Sell e-books from your own web site, and you can keep 90% of each sale, with nothing to ship. Have a processor handle the orders (that's where most of that other 10% goes), and you'll just have to answer an occasional e-mail.

Musicians - Create a hit song, and you'll get royalties as long as people still want to hear it. Don't sing? Song writers get royalties as well.

Insurance Agents - When you sell a policy, you normally get a commission every year when the customer renews. Insurance agents have been known to retire young with a healthy stream of residual income.

What do you do when that stream of income slows down? Find another! That's another great thing about residual income. It leaves you with time to look for more opportunities.

Copyright Steve Gillman. To learn more Ways To Make Money and how you can get free e-courses and e-books, visit his website:
http://www.UnusualWaysToMakeMoney.com

How to Blog For an Income - Understand How You Can Blog to Create Income

Not that long ago there was no such thing as a blog, and now we hear of people making small fortunes from them. Not surprisingly, many people do not understand how this is possible. No-one has to pay to read a blog, so how on earth can anyone make money by doing it? It is actually very simple when you understand the mechanics. The principles are the same whether in relation to a blog or an information website. Neither one needs to sell anything to make money.

Any blog or website can feature adverts on its pages and when anyone visiting your site clicks on one of these adverts you get some money. One of the easiest ways to do this is through Google AdSense, where you simply enter a bit of code onto your page, and Google do the rest. What happens is that Google automatically assess the content of each page, and serve adverts which are relevant to that topic. The benefit of this is that because the adverts are directly related to the subject your visitors are interested in, they are more likely to click on an advert.

The number of people who click on adverts will only ever be a small proportion of the total number of visitors. The rate at which people click on adverts compared to the total number of pages viewed is known as a 'click through rate'. This varies a lot, but typically you might expect it to be between one and four percent. In other words, for every hundred pages looked at by visitors, you might get on average two or three clicks on adverts. 

The amount of money you get from each click can vary enormously too, depending on the subject of your site. The amount you receive depends on how competitive the topic is for advertisers and how profitable that particular market is. Each click could earn you anything from less than a cent to several dollars. Usually you are only getting a few cents per click, so you can quickly see that it does not look like an easy way to get rich quickly. As the number of advert clicks will only ever be a small proportion of your total visitors, you are not going to make any serious money unless you have a serious number of visitors.

There is another part to the financial equation with regard to making money from blogs. In addition to advertiser income, the other possible source of income is from referrals of products sold on other websites. The way this works is that you find good products that you believe your visitors will be interested in and recommend them on your website. If your visitors follow the link from your site to the product site and make a purchase, you receive a commission on that sale. For this to work properly you need to be referring good quality products that you genuinely believe in, and which your visitors are actually looking for. If you get this right, and have enough traffic, the commissions can certainly be substantial.

You can now see that there is clearly an income to be made from blogging, but money from adverts and referrals will be tiny unless you have lots of traffic on your blog. A few individuals do manage to hit luck and get fantastically busy blogs, but realistically, that is not something the vast majority of us can do by design. If you understand the process, it is relatively easy to create a blog and get a reasonable supply of traffic, but that is never going to earn you a worthwhile income on its own. The way people manage to make serious money blogging, and this is the really important part of this article, is by creating lots of different blogs. Even if you only get a few dollars a day from each blog, that becomes a healthy income if you multiply it by a few dozen or more.

That leads onto how you manage to actually generate good quality blogs in the kind of number you need to in order to earn good money. If that sounds like a lot of work, it is, unless you use blog creation software, which is the only way to manage blogs on that kind of scale. What a good blog creation tool will do for you is automate as many aspects of the creation and promotion of blogs as possible. The work is just not physically possible without such a tool.

Take care not to opt for anything which only looks at the physical creation of blogs. Having a blog is not enough on its own - it has to have traffic. No blog or website will get traffic unless it is created in the right way and promoted properly for search engine ranking. Unless your blogs show up in search engine results, they will have no visitors, and therefore no income.

Find recommendations on the best blog creation software here. Keith Garrow is an artist whose website now offers detailed advice and guidance on many web related subjects, including web host reviews, search engine optimization and how to create a website.

How to Use a Debt Management Plan to Deal With Christmas Spending

Many callers to the free help with debt helpline are looking for a debt solution as they have overspent at Christmas. It is very easy to go overboard at Christmas and spend on items that you suddenly realise when the account is rendered, you cannot afford to pay for.

It may not be until January or February when the accounts first appear, that you understand that minimum payments cannot be made.

It can be quite a shock when this first happens, and it may be the case that those affected do not know where to turn. That is why we are building a presence on the internet, and free resource for those in need of help and advice.

Debt Management

We are very happy to explain what a debt management plan is, where it can be obtained and the effects of entering into an arrangement.

The debt management plan can be effected in a matter of days. It commences with a simple telephone interview which will determine the amount of income and expenditure and hence the available disposable income. It is this disposable income that will form the basis of the offer to the creditors.

The debt management company will inform creditors of the amount of debt held and the amount of disposable income. This results in an offer to each creditor based upon the level of debt. They are free to accept or reject the offer.

In current times, as long as an offer is reasonable nearly every creditor will be happy to accept what is proposed. This is because a creditor will be pleased to get a regular payment albeit less than they could expect monthly in accordance with the terms of their agreements.

It is a costly exercise for a creditor to have to chase a debtor for a payment each month. Therefore they are likely not only to accept what is on offer but also suspend interest and charges.

The debt management plan can be stopped at any time as it is an informal arrangement. By entering a debt management plan however, it will affect your credit rating and so you must be sure that you have a debt problem that needs attendance.

If you feel that you may benefit from a debt management plan please do not hesitate to contact us.

Information provided by Steve Thatcher of Help With Debt (UK) Limited and total debt solutions company.
For all further reading see http://www.helpwithdebtuk.com
For personal contact email sthatcher@helpwithdebtuk.com

For Steve's thoughts see http://steves-debt.blogspot.com

If you have any debt problem whatsoever either personal or corporate make Steve your first call all advice is free. Finally if in the UK and you need a friend to speak to call 01162171406

Free Debt Management UK - Wipe Out Your Debts

It is very common to have debts, the reason being immaterial. Debt management is a service which helps you to manage and clear your debts in an easier and quick way. If you are suffering from single or multiple debts and you are having less income as compared to those debts then free debt management UK service is here to help you to come out of this problem.

As the name suggests, this is a free service and it is only for UK citizens. There is no fee for forms or monthly consultancy fee, it is completely free. Here you find many financial experts to solve your debt problem. They give suggestions to manage your debt and clear it soon with your available resources of income. It gives you suggestions on how to consolidate your debts and lower interest rates. Now we have many different free services like - debt management service, debt consolidation advice, instant debt management advice and so on.

How free debt management UK helps you

This first tracks your entire income sources to estimate how much you are capable to repay for month excluding your routine expenses. Then they analyze all your debts, their amounts, interest rates and repayment time. Then they decide on preferences like which loan has to be cleared first i.e. debts with low time period and high interest. If you are having small amounts with high interest rates then they suggest you for debt consolidation loan with low interest. But they suggest for consolidations only if it is beneficial. And they give clues to reduce your interest by taking new low interest rate loans to clear high interest ones.

All that you have to do is to find free debt management UK services on Internet and fill the form they provided without any dues. Give actual figures of all debts and your income sources for best results.

Alec Reece has a way with dealing with loans for a long time. Writing articles is just a way to extend this to consumers and provide empowerment through information. All you have to do is read. To find bad debt management, advice debt management consolidation, free debt management UK, debt management uk, credit card debt management visit http://www.ezdebtmanagement.co.uk

Risk Management and Change - Using Those Special Pair of Glasses to See the Big Picture

The more you review a risk plan and absorb it, the more risk you will mitigate. Now that you have reviewed your current plan, developed some type of spreadsheet or software for governance, and possess a reference to prior plans. Now that you have taken three months to take a good hard look at your business and now you will know what your additional risks are.

The second quarter is great time to either bring someone in or to have one of your staff research tax nexus issues.

So what is tax nexus?

Public Law 86 272, 15 U.S.C. 381 384, restricts a state from imposing a net income tax on income derived within its borders from interstate commerce if the only business activity of the company within the state consists of the solicitation of orders for sales of tangible personal property, which orders are to be sent outside the state for acceptance or rejection, and, if accepted, are filled by shipment or delivery from a point outside the state.

The term "net income tax" includes a franchise tax measured by net income. If any sales are made into a state which is precluded by P.L. 86 272 from taxing the income of the seller, such sales remain subject to throwback to the appropriate state which does have jurisdiction to impose its net income tax upon the income derived from those sales.

Tax nexus changes as tax laws in states change, 86-272 is not written in stone and therefore there are many states that have created laws that circumvent or are written to state that 86-272 is not applicable under certain circumstances. This creates tax and penalty risk. Legislatures have become creative with statutes and the failure to monitor this can be costly.

Some of these circumstances are:

You had a salesperson entering the state or in some instances cross state lines.




Third party performing warranty repairs in the state.




Third party installation or repair of a product.

As you can see your "nexus" is contingent on your current circumstances and business practices. Relevance to current business practices related to tax statutes must be reviewed at least yearly if not more often, this becomes forgotten in day to day operations and that is when penalties ensue. Laws change and states are constantly looking for creative ways to increase revenue. Take a look and mitigate compliance risks.

Let's take a close look at some of the other items to mitigate risk and continue the risk management and change process.

1.Perception. Take a good look at every employee that is part of your business and you probably have an idea of their strengths and weaknesses are don't you? Now, I am going to let you in on a little secret you don't. Want to know what I see when consulting. Try this!!

What happens is companies take a stereotypical view of employees. They Perceive! Most managers think employees that complain are problems, to be ignored or dealt with. Unfortunately, this is just the personality type you need to increase production, repair poor business practices or eliminate other risk related concerns in your business.

The complainers (something we avoid like the plague) are the real associates that can be the greatest factor of change in your business. Not all of them, but most of them. When consulting I hear complaints from employees all the time. They are not't heard, taken seriously, they are dismissed, but don't just dismiss them.

Take a different approach, try this, ask them why they are complaining, give them autonomy to open up and honestly tell you what is happening in their departments, listen take a subjective look.

Then, do some surveillance of your own. Take a look and see for yourself, we always perceive these associates as a nuisance; they are actually a force for change. I will bet that you will find these concerns, repair them and you will see their real worth and really do care. Stop the perception, start opening up, change the way you think before you competition gets the edge on you!

2. Dynamic, Your Dynamic is marked by continuous and productive activity or change. Now you need to take a look at the physical parts. Performance, Operations and Documentation. Yes, there are stories of those companies that did not build their infrastructure properly to handle an explosive growth then are struggling or have failed. Or took advantage of an opportunity and thus failed. I assure you there are far more stories of companies building cost structures for the future, for growth that never materializes. Surely there are companies that did not downsize because they consistently underestimated the potential size of the downturn. So now do you know how your business is growing? Honestly steady is better. Why? Because growth too fast means that the little things get overlooked hiring is to fast and lacks training and that's a reaction to growth not action toward growth. Are you able to currently handle the growth? Hampered by a poor credit market? These are items that can change your dynamic, your market power; please take a long hard look to keep it in balance.

This is also a great time to take a look at Internal Controls, Sarbanes-Oxley and take a look at opportunities for acquiring companies. Why, because if you feel after taking a look that all the other factors are in place now, you know in comfort you can perform all these at one time. Risk is also confidence; once you learn to accept change it becomes easier to mitigate change.

3. Stability, is a key look at your business vs. your competition, compared to how well you are performing and what are you performing well at. What new and differing metrics would you like to see, need to see? Measurement is key to stability; you can't see what you do not measure. Remember technology today is only good for six to nine months your product cycles are fading out faster and faster. Something new and better is bound to come along. Will it be from you or your competition? Are you ready if its you? Business performance management software may be the answer. Dashboards are another option and in some cases more so, management can retrieve real time data anywhere at any time right from the web instead of having to ask for the information. These are items help you monitor your stability, your market standing so you can maintain balance.

Above all remember time is of the essence, not being prepared for these situations costs hard payroll dollars. Heightened costs and reduces productivity. It may even put you on the road to Chapter 11; look at all the airlines in the past month.

Look also to eliminate some items to take on new ones, eliminate that one report, or find a new way to generate them, tailor a process to lessen time, or don't send that email, but make a change build a relationship ask questions in person this time, for the associate and yourself. All these items cost your organization productivity. How? It takes focus off the way that productivity and creativity can be improved, puts it on an unneeded task, that this time could be better used to prepare for future growth. Hope these ideas have sparked a new vigor in you one for change!

Carl Ashton MBA, CMA is a Consultant / Interim CFO / Controller for Acsys Inc and a member of the Gerson Lehman group of Subject matter experts. Also writes for Service Business Solution LLC A South East Accounting Firm, Franchise Accounting Solution LLC (A Franchisee only Division of Service Business Solutions), Corporate Payment Solution LLC (Electronic payment and Payroll Division of Service Business Solutions) carl.ashton@franchiseaccountingsolution.com

5 Steps to Money Management

Ok, this is about your financial management. Many people wants to be a Millionaire, but end up with nothing. Here are 5 financial management tips that can help you boost your income. I get this idea from Adam Khoo (one of Singapore youngest self-made Millionaire). Frankly, Adam is one of my favorite gurus, I've got almost all of his books. Before I tell you the 5 tips, you need to know some rough idea about money management first.

There are people who earn $1,000 every month, and claim that it is not enough (this is true though). However, there are also people who are earning $10,000 each month, and still claim that it is not enough. Why is this so? This is due to poor money management. Therefore you must know these 5 tips before you can increase your savings and reduce your expenses. You must spend time and effort into your money management, only then you can be rich. If you don't know how to manage your money, then they will slip through your hand easily.

Don't expect that this will happen automatically. Every rich people knows that it is their wealth their money, they need to manage them at least one hour a day. But for average people (who are not yet rich), they spend less than 1 hour each month managing their money. And that 1 hour usually is spend paying bills. That is why the rich is getting richer while the poor is getting poorer. But here are some tips that can help you manage your money.

1. Always Ask For Discount

You know, most of the stores that you bought your goods from, usually they are not fixed price. If you open your mouth and ask for discount, there are 70% of chances that you will succeed. Know this fact, if you have 10% of discount, you know what this means? This means that you have got an immediate 10% returns on your money. Over a long term, you will save more money than you can expected. (Psst, use the money you save and invest in money making strategies or anything that will make you richer.)

2. Always Ask For Receipt

Why you need a receipt? One reason, so that you can track every single expenses in the end of month. Depends on what goods you bought, if possible, claim it as business expenses and get a tax deduction.

3. At The End Of Month, Record All Your Expenses

You must record all your expenses in your personal financial management sheet. Be it in your note book or you can record it in your computer, with Excel. By doing so, only then you can track where your money has gone to.

4. Use Credit Card Whenever Possible

This is of course you must clear all the payment before the due date. At the end of month, you will receive statement which will make easy for you to record your expenses. In addition, many credit cards offer prizes if you use them more.

5. Update Your Income Statement In The End Of Month

Try to do a personal income statement that record all your incomes and expenses. Update it each month. You must use a system to track where every single dollar goes. Only when you know where your money is going, can you take steps to channel it to your savings and investments.

You must develop this money managing habits to get you richer. Although doing this everyday may sound tedious. But it is very important to know where your money has spent and how much you have saved. Many businesses failed because they don't know how to manage their financial and money properly. So don't be one of them! To your success.

Shawn Lim, an internet marketer who earns money online. You can grab all the success tips and money making guides here, get your FREE e-Books that lead you one step forward to your dreams, http://themillionairesecrets.net
If you don?t act on this information today you may never get the opportunity to take this life changing step again. Just follow the link and start your new life today!
For more information about success and earning money online, just follow the link provided.

Achieve Personal Financial Stability By Increasing Income

Achieving personal financial stability has been an insurmountable task for many people. Overburdened by credit card debt, sinking values of investments, high mortgage payments and the like, some folks seem to be racing towards personal financial disaster. To avoid this dangerous state of personal financial instability and getting out of one if you are already in it, all you need to do is to simply observe and duplicate in your own life what the other successful people have done. Numerous articles have been written by many people advising to limit exposure to credit card debt and they are all valid points of advice. One needs to purchase only what he or she can afford. Living beyond your means is a recipe for disaster. If you can afford only a used car, then forgetting about the fancy sports vehicle is the right thing to do. Staying within the realm of being able to handle debt comfortably is the first thing to do to control your personal financial destiny. In this write up however, we will deal with another approach to achieving and maintaining personal financial stability and that is by increasing your income levels.

If you are bringing in a certain amount of income and that is making it hard to afford the necessities of life, then you need to take the necessary steps to increase that income level. My favorite statement that I have coined is: you cannot tighten your belt to prosperity. Steps to increase the income level may involve acquiring new skills or improving your current skill set. For example, if you are a computer programmer, may be you can learn a new programming language or improve your abilities on the current language that you are familiar with. If you are a machinist that is familiar only with manual machining methods, may be you can take some classes on CNC machining methods because those jobs pay more. If you are a low-level manager at an organization then may be taking courses towards a management degree may help you rise up the corporate ladder in your own company that will allow you to bring in more income so you can handle your personal finances more effectively. Improving skill sets is one way in which you can increase your income. If you are not interested in taking classes and going to school, then an immediate way to bring in more income is by taking on a second part-time job working in the evenings or weekends. That will bring in more income. We are strictly talking about bringing in income steadily versus making investments. Investment income is a totally different arena that comes with investment risks that need to be carefully evaluated. People that are in business can increase their income by taking steps to increase their sales levels and profitability levels. Thus, regardless of what your chosen field of work is, increasing your income levels is a sure method of taking one step closer towards achieving personal financial stability.

For more information on similar topics, please visit http://win-everyday.blogspot.com

Becoming Wealthy by Mastering Money Management

Have you ever wondered why pro athletes, lottery winners, and those who receive large inheritances have often become penniless after a few years with nothing to show for the millions they received?

Most of these individuals did not have good money habits or skills; instead, they only knew how to mismanage money. One of the biggest differences between financial success and financial failure is having the knowledge of how to manage money. That is why rich people manage their money well while poor people mismanage their money. Poor people excuse the mismanagement of their money with one of two excuses. Either they will not manage their money because it "restricts" their freedom, or they do not have enough money to manage.

The first excuse is not accurate because managing money will lead to your financial freedom, not restrict you. The second excuse does not hold water either because the truth is that if you cannot manage a very small amount of money you will never be able to manage a large amount. The same habits you had with the small amount of money will still be there with the larger sums.

It is not that the rich are smarter than poor people; they just have better money habits. Most of us learn our money habits early on through conditioning that we received from our parents or other authority figures in our lives. The conditioning usually happens subconsciously and usually never through an actual teaching session; instead, it occurs through the habits we observed, the words we heard or specific events that affected us.

So, if you realize you are not handling your money well, you most likely were programmed to manage money or at least not in a simple and effective manner.

The secret to having more money begins with acquiring good habits and skills that lead to effective money management. Once you possess the habits and skills, the money will increase.

Here is a simple yet powerful money management system. Open a separate bank account designated for your financial freedom. Put 10% of every dollar you receive after taxes into the financial freedom account. The money is only to be spent for investments - to create passive income. Never spend it - only invest! Once you retire you can then spend the income from your investments to live on, but never spend the principle. This will keep you from being broke and depending on social security, if it is still in existence!

The next account you open is a mad money account so that you can have fun with some of your money. It is an account that is equal and opposite to your financial freedom account to help you balance out and have fun doing things you would not normally do. Having this mad money account will help you to be balanced and stay on your money management track for a life time. However, the spending rule on this account is completely different. Every month you must spend all the money that is in the account and it must be spent in a manner that makes you feel special and rich. Be extravagant! This is your reward for all the hard work and consistency of saving each month into your financial freedom account and never spending it.

There are four other accounts that are just as important and should be opened: 10% for the giving, 50% for necessities, 10% for long term savings and 10% for education.

Always remember, it is not about how much money you make but how you manage what you have. That is why so many high income professionals live from paycheck to paycheck. They mismanage their money, so master money it or money will master you.

If you would like more information on how to increase your income and become financially independent, go to http://www.meetpriscillashields.com.

Priscilla Shields is an entrepreneur and internet marketer. She began her career in commercial real estate negotiating for a national retailer, and later began her own company purchasing, rehabbing, leasing and selling properties. With the dramatic increase of sales and marketing occurring every year on the internet, Priscilla took this opportunity to start a new business and help other entrepreneurs with their online marketing skills. For more information, go to http://www.meetpriscillashields.com.

Income Investing and What You Really Know About It - Survey Results

The results are in! Roughly 260 people took the time to respond to the first income investing survey and I thank y'all very much for being so generous with your time. First, the generalizations:

As you will recall, the survey included eight "mostly true" or "mostly false" statements. Most people answered all of the questions without explanation or analysis (as requested), and most of the analysis explained exceptions to the "in general" nature of the questions being asked. All of your comments were well thought out, most were right on target and much appreciated.

Unanswered questions were judged half right and half wrong because there were too many of them to label totally wrong and wind up with meaningful statistics. Still, as a class, those who responded barely achieved a passing grade. A composite grade of just 72% correct is pretty scary.

Only 20 people assessed all eight statements correctly.

Here are the individual item results, based on my forty years of investment experience, including 35 managing OPM (other people's money) professionally.

1. Tax deferred income is better than tax-free income. This turned out to be the easiest question of all, as 92.3% of you correctly labeled it "False". One lesson to be learned early in your investment life is to grow a personal, tax-free, portfolio. "Uncle" has dibs on your retirement plans--- all of them.

2. All individual investment portfolios eventually become retirement income portfolios. 38.5% of you failed to get the point--- you can't spend market value unless you sell the securities, and there is no guarantee that the market will cooperate with your retirement plans. Eventually, this one rings "True", loud and clear.

3. An income investment portfolio should have a stable market value. In thirty-five years of investment management, I've determined that the single biggest error investors make is their focus on the market value of income securities. Stable income yes; stable market value - not! Roughly 25% of you incorrectly put this one in the "True" column.

4. Income investors should seek out mutual funds with the highest "total returns" to insure increasing levels of income. You did even worse on this one. 27% thought that higher total returns mean higher income--- not at all. "Total Return" analysis is a mutual fund shell game. You can't spend the growth--- and you really should avoid open-end Mutual Funds as income providors.

5. Most often, market value changes will have no impact on the income generated from income-purpose securities. I was not surprised that so few respondents agreed with this mostly "True" observation. Clearly, too many investors (25%) are unclear on the nature of income securities.

6. 401(k) and IRA programs are excellent pension plans. Half of you, that's 50% people, think of your defined contribution, self directed, savings plans as pensions. Shame on everyone: the government, financial advisors, tax and estate professionals, employee benefits professionals, RIAs--- all of us.

7. Government bonds carry the lowest risk of loss, BUT they do fluctuate in market value. Nearly 25% of you missed the boat on this how-could-you-not-know-that "True" statement. My mouth stayed open for days.

8. Tax-exempt dividends in excess of 6% were paid without interruption throughout the financial crisis and remain available today. Also "True" at the time of the survey, and still true today--- and only a handful of you emailed me for an explanation.

In summary, there were four generally "True" and four generally "False" statements, and I do appreciate that individual circumstances may make for some slight change in assessment. But if this were a "college entrance exam" for future retirees, retirement planners, or investment managers--- well, barely passing just doesn't cut it.

Many of you will disagree with my assessment. That's fine, I expect to be beaten up a bit by people who are unfamiliar with my approach. But please be gentle, or at least civil.

Remember, your participation has earned you a free workshop, and thanks again for the input.

Steve Selengut
http://www.sancoservices.com
http://www.valuestockindex.com

Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"

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Debt to Income Ratio - Keep It Within Reasonable Boundaries

Money management techniques are like diets, in order to be successful with one, it must be designed and customized for the particular user. There is no universal solution as each budget is different.

Adjusting Debt Ratio To The Budget Distinctive Characteristics

There is a general rule that states that overall debt payments should not exceed 36% of your monthly income. However, as explained above, general rules are useless if you don't take into account the particular differences of budgets and situations. It's not the same someone who is paying mortgage payments than someone who is a tenant. A closer approximation would be to consider each dollar on unsecured debt the equivalent to one and a half Dollars of secured debt.

Income-> 2500

Credit Card Debt Payments-> 150

Home Mortgage Payments-> 500

Car Loan Payments-> 100

Student Debt Payments-> 150

In the above Chart we see an ideal situation with a 36% debt to income ratio. However, taking into account the differences between secured debt and unsecured debt, the debt exposure would raise 8% more. Nevertheless, this debt situation is still manageable. Let's take a closer look to a more problematic situation:

Income-> 2500

Credit Card Debt Payments-> 250

Rent Payments-> 400

Car Loan Payments-> 100

Student Debt Payments-> 150

In this new chart the ratio equals to 36% again but taking into account that debt is unsecured and thus carries a higher interest rate, if you multiply by 1.5 we would be talking about 54%. This kind of debt exposure is risky. Yet, it is not that problematic. With a simple debt reduction program you can get back into the reasonable boundaries.

As you can see, the higher the amount of credit card debt, the higher the danger. This is due to the fact that in the event of defaulting the rates applied to the debt are even higher and thus, debt will accumulate at a greater pace.

The same principle that rules debt consolidation, rules money management techniques: keep debt payments affordable.

This can be done either by exchanging expensive debt with cheaper debt or by spreading the debt payments into longer periods of time.

Money Management Solutions

The key to successful money management when it comes to credit cards is to restrict their use dramatically. Unnecessary goods shouldn't be purchased with credit cards.

Instead, if you want to buy something that is not strictly necessary, try to raise the money in a savings account till you have enough to afford it. Once you have some discipline, you'll be able to get some flexibility on this rule.

Otherwise you may be tempted to resort to debt consolidation Yet, it's different to consolidate your debt because you have no other choice than doing it because you've taken the wise decision to borrow smartly.

In the first case, once you obtain debt relief, if you haven't changed your behavior, you'll soon be making the same mistakes as you did before and next time you won't be able to consolidate again.

Zara Colby is the author of this article which can be found also at Consolidationdirect.com where there is information on tax debt relief, credit card debts, student loan consolidation programs and any other kind of debts.

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Annuities in Your Retirement Income Planning

Annuities have had a bad reputation for many years due to its complexity and fees. However, due to the economic climate changes, these types of retirement products are becoming more valuable to your retirement income planning than ever before! I am going to give you the good, the bad, and the ugly of annuities in order for you to make a better educated decision on which type of annuity to purchase for your retirement (income) portfolio.

1) General Annuity Features including their pros/cons

2) Types of Annuities including their pros/cons

3) Contract features within a annuity

4) Personal opinion on which annuity is right for you and when to purchase them

Part 1. General Annuity Features including their pros/cons

Annuities are offered by an insurance company rather than a brokerage firm. These types of products can be compared to a pension plan with the exception that annuities tend to go with inflation thereby giving you the upper hand. General annuities have many features that you should be familiar with. One of the most important benefits is it will pay you an income for life. In other words, your account will not be depleted and you will always receive an income off the amount you have put into the annuity and the percentage/dollar you will receive. This is guaranteed. So if you live to be 110, you will still be collecting from that annuity.

The next benefit that all annuities include is that all interest earned are tax deferred. Because the IRS sees this as a retirement account it will be treated as such. Many people argue that they can get the same interest from a CD however CD's are FDIC insured which makes this product HEAVLY TAXED.

For example: You invest $100,000 into a 30 year CD earning 3% with a tax bracket of 39%. In year 10 you have earned $119,882; year 20 = $143,719; year 30 = $172,294 after taxes. However in an annuity earning the same interest you would have earned the following respectfully $120,978; $149,173; $187,063.

Now remember, you have earned more money and you have an income for life whereas your CD is paid to you in lump sum and you either reinvest or simply deposit the cash into a savings account in which the interest you earn in the savings will, again, have tax implications. Let's also remember that annuities tend to move with the rate of inflation (minimum) therefore not only do you have to pay taxes, you will be losing money if you are not earning the same or more than the CPI (Consumer Price Index= The measurement of inflation).

All annuities have a death benefit just like an insurance policy. If you have invested in an annuity and the annuitant (those that will/are receiving the annuity pay) has an untimely death, the assets will be transferred to the beneficiary that was listed on the annuity. This is ideal for estate planning since the proceeds with pass directly to the beneficiary without delay, expense, and probate!

Unlike a 401k and IRA (Individual Retirement Accounts) that can be depleted and has a contribution limits, there are also no contribution limits for annuities. You can easily deposit large sums of money to an annuity without any concerns. Some insurers have high contribution limits in which you just open another annuity and continue adding to your retirement portfolio. Either way, there is no limit.

Annuities have a variety of payment options to you including the following:

- Annuitization (the most popular one and personal favorite: payment for the remainder of your life)

- Lump sum distribution (one- time payment)

- Periodic distributions (per month, quarterly, yearly, etc.)

- Systematic Distributions (a fixed or variable amount sent to you on regular intervals)

The IRS views this as a retirement vehicle and as such you cannot withdrawal until the age of 59 ½. If you do, penalties will occur. The same goes for other retirement plans so this should NOT be a surprise.

Some other miscellaneous features include easy maintenance and no 1099 for income earned on the annuity contract as well as the ability to exchange older non- performing annuities into a newer fixed annuity without any tax implications (IRS section 1035). However, be warned that if it's an exchange within a certain time frame (depending on the insurance company) into another insurance company product, fees may be charged. This is called the surrender charges and it varies by each company.

Surrender charges should be one of the main cons you should keep an eye out for when choosing which annuity for your retirement account. These fees range so far out that it can't truly be listed but I believe it is safe to say it can range as high as the sales charge themselves! Surrender charges are implications in which the insurance company forces you to keep your money in the annuity for a specific time which is usually 7 years. This really should not be a concern since this is retirement money so you really should not be investing in annuity anyway if you're unsure you will need these funds within 10 years. There are annuities that do not have these charges and will be explained in part 2.

Premiums (fees) to participate in an annuity are a big concern and the ranges vary depending on age brackets and company. It covers MOST of the fees in which includes the following (VERY IMPORTANT NOTE: These are average amounts and NOT all products have these fees!):

- The Morality and Expense risk charge (M&E) is charged against the value of the sub accounts and is usually 1.25% of the portfolio value.

- Administrative fees are charged for record keeping and other misc. expenses and is paid yearly at an average of around $30 pr 2%, whichever is LESS.

- Management fees are charged 1.5% a year on average and just like it sounds, it pays for managing the portfolio.

The safest bet is you will be paying a range, on average, from 3%- 8% upfront and approximately (again, not all annuities have these fees).5- 2% a year. These fees are higher depending on how young you are. This is due to the accumulation period (earning more there by having your value increased higher in which you will be receiving higher pay). In my honest opinion, with benefits like annuitization and tax deferred, it is worth the cost! No other retirement product offers guaranteed income for life.

Part 2. Types of annuities

This is where most people get a bad experience with annuities. They choose an annuity that they do not qualify for or do not understand and things turn soar. There are 4 major types of annuities: Fixed, Indexed, Variable, and Immediate.

- Fixed/Traditional Annuity: This type of annuity is almost identical to CD's in which you are guaranteed to earn X amount of percentage for a certain amount of time. After the time expires, the annuity rate is reset annually by the insurance company. In most cases it is by the rate of inflation (Consumer Price index). Major difference compared to CD is the guaranteed income for life and it is tax deferred.

- Indexed Annuity: This product is unique in which you are correlated with a particular stock market (in most cases the S&P) and have a guaranteed minimum. For example, you have a guaranteed minimum of 1.5%. If the market crashed (such as what happened in 2008 and most people lost half of their retirement), you will still earn a minimum of 1.5%. Indexed annuities also have a maximum cap. So if you have a cap of 10% and the market earns 15% or even 30%, you will only earn 10%. This is what is called an opportunity risk. These rate of returns are based on your chosen options on how it will be measured which can be month- to- month, yearly, point- to- point (depends on the insurance company and/or you), or quarterly. The longer the time usually means the higher the rate. As long as you have a guaranteed minimum and able to participate in some upside in the markets, the opportunity risk is worth taking for most investors.

- Variable Annuity: Unlike fixed and indexed annuities that have a fixed earning potential. A variable annuity correlates with the markets or particular investments within the annuity. Remember, it does have all the tax and income benefits BUT like a mutual fund, the value itself will rise and fall depending on the investments within the vehicle. In other words, your principle is NOT protected. With premiums and surrender charges higher than fixed, indexed, and immediate annuities, my personal opinion is if you qualify for investing in a variable annuity, just invest in ETFs (Exchange Traded Funds) in an IRA. You are taking the same amount of risk so it is not worth the extra fees (all fees mentioned in part 1 apply to this type of annuity indefinitely). Some will disagree with me but those that do tend to sell this type of product for its very high commission which makes their credibility almost irrelevant.

- Immediate Annuity: Also called a "Single- Premium immediate annuities", this is a safe vehicle that pays an income for life after you pay 1 lump sum. The problem is the lump sum should be enough that it is worth the income (usually anything over $150,000 is fine but also depends on your life style). This product is great for those that plan on retiring in less than 6 years.

These types of annuities are broken down to 2 categories, qualified and non- qualified. The simplest way to understand these categories are simply distinguished by the way it is funded with before taxes (qualified) or after taxes (non- qualified). Qualified annuities are usually built within retirement accounts (such as 403b/457). The major difference for a qualified annuity is:

- Contribute with pre- tax dollars

- Contribute based on "work" earnings

- Yearly contribution limits

- Direct rollover accepted to another qualified plan

- Withdrawal requirements at age 70 ½

Non- qualified plans have none of these. In most cases, if you purchase an annuity, it will be nonqualified.

Part 3. Contract features within a annuity

Most annuities have certain features within the contract. I will explain some of these common features:

- Indexing Method: The indexing method means the approach used to measure the amount of change, if any, in the index. Some of the most common indexing methods, which are explained more fully later on, include annual reset (ratcheting), high- water mark and point- to- point.

- Cap Rate or Cap: Some annuities may put an upper limit, or cap, on the index- linked interest rate. This is the maximum rate of interest the annuity will earn. In the example given above, if the contract has a 6% cap rate, 6%, and not 6.3%, would be credited. Not all annuities have a cap rate.

- Participation Rate: The participation rate decides how much of the increase in the index will be used to calculate index- linked interest. For example, if the calculated change in the index is 9% and the participation rate is 70%, the index- linked interest rate for your annuity will be 6.3% (9% x 70% = 6.3%). A company may set a different participation rate for newly issued annuities as often as each day. Therefore, the initial participation rate in your annuity will depend on when it is issued by the company. The company usually guarantees the participation rate for a specific period (from one year to the entire term). When that period is over, the company sets a new participation rate for the next period. Some annuities guarantee that the participation rate will never be set lower than a specified minimum or higher than a specified maximum.

- Floor on Equity Index- Linked Interest: The floor is the minimum index- linked interest rate you will earn. The most common floor is 0%. A 0% floor assures that even if the index decreases in value, the index- linked interest that you earn will be zero and not negative.

- Averaging: In some annuities, the average of an index's value is used rather than the actual value of the index on a specified date. The index averaging may occur at the beginning, the end, or throughout the entire term of the annuity.

Part 4. Personal opinion on which annuity is right for you and when to purchase them

An annuity is not just a retirement account but it's a long- term commitment between you and the insurance company. Many advisors are quick to sell 1 type of annuity but 1 type is NOT built for everyone. I am going to say it again, 1 type is NOT build for everyone. You must be sure which product to choose and that you do not require these assets for at least 7- 10 years. The best age to invest in these products is in your 50's. This will give you ample time to accumulate sufficient funds for your annuity as well as build your IRA and qualified retirement account ( 401k's, 403b's, 457's, and keogh plans). I recommend you should max contribution to your employer's retirement account and your IRA before you invest in an annuity. Once you are in your early to mid- 50's, you should start thinking of an annuity that is right for you based on your risk tolerance and lifestyle.

In most cases, Indexed annuities are great for those under the age of 65. You can tolerate some volatility. If you are over the age of 65, you should consider a fixed annuity to avoid volatility. You can start to plan your retirement knowing what your income will be based on the percentages/dollar amount you will be receiving. Immediate annuities are great for those that will retire in less than 6 years. There is no point in investing something risky or waiting to receive payment without surrender charges therefore it is best to just invest an a immediate annuity to avoid these issues.

Variable annuities are only good if you max all your retirement accounts (employers and IRA) and wish to contribute more in a retirement account. I personally do not recommend variable annuities unless it is used for those that are too busy to manage their bond/ETF portfolios AND max all retirement contributions. I would rather advice you to invest in a municipal bond ladder portfolio or ETFs (Exchange Traded Funds) and reinvest in the dividends to build a tax- free/deferred portfolio THEN later in your mid- 50's move the assets over to an indexed/fixed annuity that is guaranteed lifetime income. This will also avoid the massive amount of fees that come with a variable annuity and take part on the volatility that can in many cases be beneficial for you.

Your retirement is more important than just trying to gain as much in the stock market. You need to protect your "nest egg" and annuities should be a big part of your retirement. If your under the age of 40 than you should be in more equity/stocks and take the risk since you have many years of work and making money ahead of you. Please take note that I am speaking in the general sense and am not taking current income, lifestyle, goals, needs, and net worth into consideration. This is vital information in analyzing the percentage of your retirement portfolio that needs to be invested in annuities because it is not a question of "if" but how much needs to be in an annuity. Retirement income planning is vital to your future and annuities must be part of it.

As the economic environment changes, so should your retirement account. Investing only in 1 retirement account and relying on social security is nothing more but setting yourself up for failure. You will lose assets and soon enough you're back on the work force till the day you die. I am sure involuntary part- time work is not part of your retirement plan...or is it? The decision will always be yours.

Feel free to contact me if you have any questions regarding retirement income planning or annuities.

Financial Consultant, Risk Manager, Insurance Agent, and Retirement Planner here to give honest opinions on the current financial trends. (*Please note: This is not a solicitation and opinions on this blog are independent and not connected to blogger.com. Please consult with your financial representative prior to applying any recommendations on this blog or twitter. If you have ANY questions, please feel free to contact me. I will be more than happy to chat with you!). [http://www.MichaelAponte.Biz]

Why Professional Landlords Should Use Tenant Management

Why? Well the answer is a simple one. The relationship can be mutually beneficial and surely that has to be good news for the bank balance of the professional landlord? Having said that, there are still professional landlords and property landlords who do not see this and, come hell or high water, they will not use tenant management software. There may be a number of reasons for this reluctance; property managers can be protective of their property portfolios and business reluctant to hand over some control to another business and in the current economic climate all businesses want to keep functions in house where they can control and save costs.

So, what are these reluctant and hesitant property managers missing out on? What can property letting agencies offer the professional landlord?

Letting agencies find suitable tenants for the professional landlord. It sounds obvious and it sounds simple but it can be a daunting, time consuming and resource hungry task. There is also a lot of regulation surrounding tenancies, contract and property law can be a minefield. Good letting agencies are experts in these areas, it's what they do. Most professional landlords employ specialist to manage tax liabilities and carry out complex building and maintenance work why is this aspect of business any different? After all it is finding the right tenant for the right property that should secure the long term benefit of a good and regular rental income.

So, how should it work? First the commercial landlord needs to meet the letting agent in order to view the property and to discuss and determine where it fits in the rental market and what an appropriate rental income for it is. There is often no charge for this initial service and rental income assessment. Once an appropriate rental income has been agreed then the letting agent will advertise the property. You should discuss with the letting agent what the advertising options are and what is best for the property and the area. Letting agencies these days can advertise properties in their shop windows, in the press, in trade magazines and on-line.

Once the advertising has generated interest then the letting agent will show the property to the prospective tenants. Remember they are your agent and as such are acting on your behalf and under your instructions. You should be very clear about what you are prepared to negotiate in terms of rental income and lease provisions. The agent has a legal duty to act within the terms and scope of the authority that they have been given by you and if necessary they must refer any counter offers or other areas of negotiation back to you for further instruction. The law of agency affords the professional landlord some protection in this regard but you should be very clear and specific in your instructions to an agent.

Once the negotiations have been completed and agreement has been reached, the letting agent will draft and produce the paperwork, the tenancy agreement. Do make sure that you read and understand everything in it and if you have doubts, especially at the beginning of a professional relationship with an agent, then have it looked at by a lawyer specialising in commercial property. By building a professional relationship with a good letting agent you can get on with what you do best, acquiring and managing good property, confident in the knowledge that the right tenants are in them paying you a regular and good commercial rent.

Kirthy Shetty:

Tenant Management

Property Manager Training

Everything You Ought to Know About Property Management Company

Are you a resident of Broward? Do you have residential or commercial property there? Are you finding it difficult to find a proper tenant or buyer for your house? Now, you don't have to worry. There is solution to this problem. You can hire a Broward property management company who will solve all your property related issues. If you want to know more about property management companies just read the article below:

Property Management company will help property-owner to gain more income from his properties and buildings, whether residential or commercial. A property owner can generate income with the help of his assets. One way is by leasing them. If a landlord has commercial or residential units, they should not leave it like that; they should either sell it to some prospective buyer at profit or rent out the space to tenants. In addition, if you are a small business owner with a shop space, you can use it to generate income by renting out your unit as a storage space.

If a person owns lot of properties, maximizing their profitability can be a quite a task. In fact, managing only one property can be time-consuming. Not only will you advertise in order to attract tenants or buyers; you have to make sure that the property is in great shape. If you're working in a company, you have to take time off to show the property to prospective tenants or clients. Finally, you should ensure that the tenant has steady monthly income and a good credit record so that you are assured that they will pay rent on time. If you own multiple properties, it would be wise to hire a property management company.

A property management company has the required manpower and expertise to handle all aspects of properties, including these functions:

- Property management companies can get tenants for your property easily as they have a huge network base. It is easy for them to get hundreds of prospective buyers.

- If a property owner hires property management company services, they will take care of all the legal issues involved in preparing lease agreements. This will also include everything related to building maintenance and renting regulations set by the state and federal government. They will also handle payment of bills and taxes for your property.

- Another important function is tenant management which includes finding tenants for building, verifying credit history, collecting their monthly rent and resolving issues that arise time to time.

- Property Management Company has to make sure that your building is in good condition. They will arrange electricians and plumbers for routine maintenance and also make sure that wiring and piping work is done properly. They will also handle other works like cleaning the common area of the building and upkeep gardens, if any.

Now you can hire a property management company in Broward who will solve all your property related issues.

The author is famous for writing articles on palm beach property management. He has written various articles on rental property south Florida.

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The Commercial Real Estate Investor Team Member That Makes YOU the Most Money- The Property Manager

The right Property Manager can dramatically boost your profits and is key to your success. The wrong one can make you wish you never bought a property in the first place. Property Management Companies play a BIG part of any commercial real estate investor's business plan.

So, how do you find the right Property Manager and what should a Property Management Company focus on to make YOU the most money?

Rental property can be an extremely profitable investment when managed correctly.

The best management comes from an experienced professional Property Manager. Find the best local Property Manager before you start buying, meet them in person and interview them. Once you make a choice establish good rapport and make sure they have a good reporting system and use industry standard management software. Please don't manage your own properties. You are almost certainly not good at it and Property Management is NOT the best use of your time as the head of your Investment Business.

Experience is one of the defining qualities of a Certified Property Manager. (CPM)

Candidates for the designation CPM must have a minimum of five years of effective full-time decision making activity in real estate management before earning the designation. Ongoing training is also an important piece of the right management balancing act that makes sure your manager keeps up with both the urgent daily tasks AND your long term business plan for the property.

Great Property Managers greatly reduce your risks at the same time they increase your profits.

They keep your tenants happy, focus on increasing rents and decreasing vacancies. They take care of maintenance issues promptly without you needing to get involved in repairs. They stay up to date on the latest changes in Landlord-Tenant and Fair Housing laws so you always operate in compliance with the rules.

Your Property Management Company cost is not an area where you want to shave the budget.

You get what you pay for so make sure your dollars are spent wisely. Look for Property Management companies that contain the following key traits and your profits will grow, while you simultaneously reduce monthly and annual expenses, and maintain or grow your tenant lists.

A great Property Management Company stays focused on three main areas to maximize return on investment.

1. The Investor - by increasing profits

2. Your Customers or Tenants - by providing a positive experience that results in their continued tenancy

3. Other Professional Associates - their support network that insures operating policy and procedure are adhered to.

You can not serve the needs of one of these groups at the expense of another. Ultimately, the right Property Management Company is adept at balancing all divisions and relationships that contribute to successful management and Return On Investment from a property.

Property Management success should be a shared experience within the company.

By this I mean every employee should exhibit a good attitude whether they are new to the business or have years of experience. Every employee in the management company should be willing to grow and learn. Periodic training through coaching or education should be available to maintain and upgrade service delivery. All these efforts transfer to increased customer satisfaction and tenant retention.

The right management company will also be networking with the immediate community.
Chambers of Commerce membership and various community organizations and should be able to provide a minimum of five references to you from properties they manage. They should have a track record and strong management portfolio, and have experience working with multiple investors on a single property. They should be strong communicators and be willing to work with you and your investment strategy. If your management company treats the property like they own it directly, and are spending investors money like it belongs to them they become a valued resource that contributes to both the tenant experience and the investor's bottom line.

Property managers have to understand how to increase returns within an owner's specified time frame, and know how to add value by enhancing income and cutting expenses. They will conduct due diligence for you and provide you with reports as well as know how to take over a property after acquisition. The right property manager is also a financial manager and will understand how to analyze financial statements and utilize yield management technology that provides monthly updated rent rolls, income expense reports as well as annual operating budgets and income forecasts.

Choose a Property Management Company with proven abilities, integrity, reliability, industry knowledge, and management expertise needed to enhance the value of your commercial real estate assets. Investors own property for one reason - as a financial investment. The RIGHT Property Manager is the one team member that can improve your investment by positioning your property to achieve its highest and best use and make you the most money.

Learn more from a proven Investor Education Resource:

Investor Tours University is a dedicated resource helping investors build wealth and achieve their defined level of success. We offer state-of-the-art commercial real estate investing education, tailored to meet the needs of investors with varied backgrounds and experience levels. Our faculty consists of a network of national experts in legal, tax, investment strategy, property management, acquisition and sales professionals who practice what they teach investors, which is how to achieve generational wealth using commercial real estate.

Monte Lee-Wen is an author, mentor, CEO and the Founder of Investor Tours University. His website is http://www.investortours.com

ITU is a subsidiary of the Partnered Property Acquisitions Group, The PPA Group, of Austin, Texas. The PPA Group has holdings of over $40 million in commercial real estate with a projected target of over $100 million in commercial real estate acquisitions by the close of the forth quarter of 2007. Visit http://www.theppagroup.com

The PPA Group does business in all 50 states. Monte may be contacted at (512) 651-0513. ITU is the #1 educational resource for in depth commercial real estate investment education offering a proprietary investment system taught by Monte Lee-Wen.

Investor Tours University currently offers:
? Free bi-weekly teleclasses
? Investment Education Seminars
? Investor Tours Events
? Investment Webinars
? And much more . . .

You are welcome to share this article, unedited, in it?s entirety with anyone. You may not remove this text. ? 2007 Investor Tours University.

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