Archive for Investing

Five Tips for Financing Investment Property

real estate

In today?s financial climate, many investors are exploring the real estate market and considering it a welcome addition to their portfolios. Investment properties can provide a steady, reliable source of income as well as lucrative returns. Most people, however, don?t have enough cash on hand to purchase these rental properties outright. In this article, we will explore five tips to keep in mind when financing your investment properties.

real estate
  • Plan on Making a Significant Down Payment ? Mortgage insurance does not cover investment or rental properties, so you will usually need to put down at least 20 percent if you plan on getting traditional financing from a lender. If you are apt to consider an even heftier down payment, it could help you qualify for the best interest rates.??
  • Look for Creative Options ? You?ve found the perfect investment property, but perhaps traditional financing options may not yet be available to you in your current situation. If this is the case, there are creative options out there you can use to finance your investment property (or to get the funds you need for your down payment). Credit cards, home equity lines of credit, and even life insurance policies can all help you get the cash you need to appear more attractive to lenders.????
  • Consider Owner Financing ? Since stellar credit scores are not as easy to come by as they used to be, and lending terms are increasingly strict, owner financing is becoming an acceptable alternative to traditional funding for investment properties. In this type of financing, the seller accepts your down payment; then, they extend credit to you for the rest of the purchase price. If you decide to explore this route, make sure to have a good game plan in place before approaching the seller ? they need to be sold on accepting both owner financing and you.?
  • Check Your Credit Score and Put Some Extra Money Away ? Having a good credit score is helpful in all types of financing situations, and investment properties are no exception. Therefore, you will want to check your credit score before trying to secure the financing of an investment property. If your credit score is under 740, you will be required to pay additional fees (or points) to get the interest rate you want.?

Additionally, make sure you have some extra money put aside in the bank. When making a loan decision, lenders will look to see if you have at least six months of reserves to pay not only for investment properties but for your personal expenses as well. Showing that you have a good debt-to-income ratio helps ensure to the lender that you will be okay should you encounter any rental vacancies. Hiring a rental property management company can help you fill these vacancies should they occur.? ? ? ? ? ? ?

  • Try Different Banks ? If you have extenuating circumstances, or if you have a small down payment for your rental property, try going to a local bank instead of a large financial institution. Typically, these smaller ?neighborhood? banks have more flexibility, understand the surrounding area well, and they also are more prone to invest locally.

Now, first things first, it?s time to find that perfect investment property. Get started today and use these tips to help guide you through the process. 

How to Make Money by Investing in Ranch Land

investment

When most people think of investing in real estate, they think of multi-family homes or commercial properties. But there is another property class which you might want to consider adding to your property portfolio ? ranch land.

Just as the name implies, ranch lands are wide open vistas used by grazing animals such as cows. These days investors are not only buying up these properties for ranching, but they are also converting properties into mixed-use developments, some of which are ultra-luxurious.

investment

But as a budding investor, you need to crawl before you and walk and this article will give you some of the insights, you?ll need to know about how to make money in ranch land ? or any other undeveloped property for that matter.

Why Should You Invest in Ranch Land?

For starters, they are not making any more. But unlike other limited resources ranch lands on a per-acre price are often less expensive than other parcels on offer. This is because ranch lands are often in remote locations, but this shouldn?t dissuade you.

In fact, investors can either choose to keep their investment properties as working ranches, bring on others to develop a resort, or just bank the land until another developer makes you an offer you can refuse.

Beyond this, the land is a hard asset which you can use with banks as collateral when needed.? Note, this is not meant to advocate taking on bank debt but having available assets which you can pledge for a loan are useful when you are trying to ensure your financial independence.

Yet another reason to invest in ranch land is that is often less expensive and thus you can acquire more property for less. From there you could even subdivide the property to make back some of the money you invested in the land ? thus ensuring your return.

This approach can be very profitable as it means that you are acquiring the land for a discount, but you also don?t need to worry about the cost of capital improvements and ongoing maintenance.? If this interests you, then you might want to check out Land Broker MLS, which has a database of undeveloped land and ranch land available throughout the country.

Just keep in mind that no investment is without risk and if you do decide to acquire a property, then you will want to make sure you have a plan for it and have conducted your due diligence.

Common Investment Strategies

As outlined, investment in ranch land can be profitable but did you know that there are several strategies buyers use to make money. These include a buy and hold strategy, leasing the property back to a farmer or a rancher (known as a leaseback), and even donating the property as a nature reserve.

The latter is not only good for the environment as it allows the land to return to its natural state, but it can also be used to offset a tax liability from another investment. Just make sure that the structure used to hand over the land aligns with recently updated tax rules as this will make sure that you can maximize your deduction.

No matter your investment strategy, you will want to keep in mind that bank loans for vacant land often has different criteria compared to purchasing a home. As such, many buyers opt for what is known as seller financing. This is when the seller will offer the financing to acquire the property ? though keep in mind that the interest rate might be slightly higher than standard bank rates.

However, the advantage of this approach is that it allows for the transaction to be completed to quicker than waiting for a bank to approve a loan application. Just keep in mind that a default will mean the seller will not only retake possession of the property, but you will not be eligible for any payments made to that point. The exception being when a sale of the land for more than the amount owed might net you a small profit.

What Else to Think About?

Investing in ranch land or other vacant lands might not be for everyone and before acquiring these types of properties you should know why this investment works for you. In some cases, you might just want to bank the land, while in other cases you might have a plan to develop the property in the future.

Either way, you will want to make sure you have a plan for your investment, or you?ll end up with a property and no idea how to make money from it. Remember, investing is about managing risk to maximize your returns and if you want to make money from any investment, then you should make sure you have done your homework first.

Stock Market Investing: How to Conduct a Chart Analysis

stock market

Before I get into the how-tos of conducting a chart analysis, I want to clear a few misconceptions about stock market investing.

A lot of wannabe stock traders still maintain the belief that investing in stocks is a major risk and you have no control over the process. But this is furthest from the truth. You can get started right now with just a $100. You don’t need to put your life’s savings at risk; as you have to in real estate investment.

How to read a basic line chart?

line chart

This is a sample line chart of the Dow Jones industrial average. The Y-axis(vertical line) represents the price of the stocks and the X-axis(horizontal line) is the timeline from 1900 to 2020. Over the course of 100 years, the stocks have advanced steadily from $0 to $26,000. It’s basically a J-curve; nothing much is going on until 1980 and there is a sudden rise in demand for products manufactured by the top 30 publicly owned companies based in the United States.

Due to a swift rise in the demand for the products, the price escalates dramatically between the year 1980 and 2020. As you can see there is a dip in the stock prices around the year 2008. This is due to inflation during that period. During this period, prices of products increased but the purchasing power was weak. Hence, the stock prices crumbled from $14,000 to $7000. This was a calamitous situation for the stock owners at that time.

Candlestick chart

candlestick chart

To conduct a chart analysis, understanding a candlestick chart is equally important. So, the X and Y-axis of the candlestick chart represents the same things as that of a line chart. The only difference is, instead of a plain curve there are red and green candles. Each candle represents a single day in the timeframe. This chart is a zoomed-in version of the previous chart and provides in-depth information about how the stock prices are changing day after day.

You must be wondering why some candles are green and others are red. Well, the green candle indicates that the stock prices closed higher from the day before. In the chart, if you look at July 16, there is a steep increase in the stock price(from 19 to 22). A day before(that is on 15th of July), the stock prices were lower than 20 and hence it is represented by a red candle. I am hoping you are understanding how candlestick representation works. It’s not that complicated actually.

When do people buy and sell stocks?

As you would already know, stock prices of a company increase with the increased demand for its products. And they fall when the demand is low. The lowest point at which the stock price fall is known as “support“. Usually, stock prices reach this level and stay there until the demand for the products increase. In some cases, they do fall beyond the support level and reach the next support level.

Likewise, “resistance” is the point at which the value of stock reaches its peak and bounces off after a while. You should look to sell your stocks when the price is near the resistance level and buy them when the price is near the support level.

The Most Important Principles of IRA Investing for Retirement

IRA investing

A self-directed IRA (Individual Retirement Arrangement) gives you many more investment options than an employer-contributed 401k. You can buy individual stocks, mutual funds, bonds, and alternatives like gold and silver. With more options available, you should talk to a financial advisor about meeting your investment goals, but a few tips can help you get started on a plan.

Asset allocation and risk tolerance are the two most important factors to consider when you?re planning an IRA.

Asset Allocation

Asset allocation is simpler than it sounds. It simply means how your money will be divided between different asset classes: stocks, bonds, alternatives, and cash. Equities come with more risk, but promise bigger growth if it all goes according to plan. Equities (stocks) should be balanced with bonds and alternatives that are comparatively safe.

IRA investing

Mutual Funds

Mutual funds should make up the bulk of your IRA, as mutual funds provide a level of diversification that can result in better long-term growth. Unless you want to make your investment portfolio your full-time job as you research stocks, plan, and constantly update your portfolio, mutual funds are the best way to invest in equities.

Alternatives ? Gold & Silver

A balanced IRA portfolio should also feature some percentage of alternatives. Did you know that you can buy gold coins and gold bars as part of your IRA? Physical gold bullion is now available as an option for your IRA and it?s definitely one worth considering as you save for retirement, especially given the long-term possibilities of gold as a hedge and its long bull and bear market cycles.

Gold is a great addition to an IRA. It?s a tangible asset that will always hold value (gold has had value for millennia), there are no risks with 100% insurance on storage, it?s a simple investment, and the growth of gold prices is only taxed on disbursement.

There are many opinions about how much gold you should keep in your portfolio. One estimate is that the ideal percentage of gold you should have matches gold?s share of the global stock, bond, and gold markets: 4 percent.

Others recommend going as high as 20 percent due to gold?s role in a non-ideal and abnormal economic regimes, especially stagflation and deflation. In an economic situation like the Lost Decade of Japan, gold makes much more sense than stocks, and it would make sense to invest a higher percentage into gold.

One important thing to note is that you must buy gold from a gold shop that lets you make purchases with your self-directed IRA. Gold shops such as Silver Gold Bull allow you buy gold online as part of your IRA. It simplifies the process and gives you an important tax advantage on gold. Go online and see what Silver Gold Bull has to offer in terms of IRA-eligible gold.

Risk Tolerance

How much are you willing to risk? Bonds and alternatives are generally less-risky assets with smaller returns. Making them part of your portfolio is a smart idea if you have low risk tolerance. Generally speaking, as you get older, your risk tolerance decreases. The closer you get to retirement and the need to cash out your IRA or draw income from it, the more conservative your IRA should become.

With these simple principles in mind, you can begin to plan for your IRA.

Industries you should look Forward to Investing in, to Make a Fortune in the Long Run!

Now when it comes to investing, it can be quite hard to judge which company would be better and which one will not. And often pole tends to judge companies on just one factor and make their decision which at times can be misleading.

Thus if you are someone who is looking forward to investing in the industries, have a look at the list below which some of the top investment companies which have been evaluated by different parameters and will prove to be a wise investment decision.

Hindustan Unilever

It undoubtedly is the largest FMCG Company in India at present. It operates in different sectors like personal care, home care, and the food sector.  Now according to a report that was recently published by JP Morgan, it was stated that this company is going to command premium valuations in terms of better growth of the volume when it was compared to the peers. Also, the margins of the cost efficiencies of this company are going to improve further. Recently its stocks have 19.5% of the year to date returns in the previous year (2018).

Music broadcast

In India, this is the oldest private radio broadcast in today?s date. It operates on nine different frequencies. According to a report presented by the Ambit capital, the after-tax free cash flows from 2017 to 2018 and 2019 to 2020will treble. One of the primary growth driving factor of the company is its improved pricing. At present, its stock is nearly 15%.

Suven life science

It is a biopharmaceutical company, that deals with the manufacturing and the supplying of the drugs intermediates to innovator companies globally.  According to what was stated in a report published by the Emkay, the company is compelling play in terms of spending global R&D. At present, the stocks have delivered 12% year to date returns in the year 2018.

Multi commodity exchange of India

It is a listed commodity derivatives exchange. It deals with online trading. Along with that it also deals with the clearing and the settlement of the derivative transaction.  There is quite a favorable kind of environment to operate. It is because it is expected that the regulatory reforms are likely to increase in the coming future which in turn is due to the expected increase of the intuitional participation in the commodity trading. Also, it is placed in such a manner that it can even defend the liquidity and the market share. Currently, the stock is at 14%.

Mayur Uniquoters

This company deals with the manufacturing of artificial leather or foam leather. According to the reports of the AnandRathi, there can be seen a good growth which is driven mainly by the leadership position. Since January the stock has corrected at 9.5%.

Thus the ones mentioned above are the tops five companies that are best for investing so that you can make a fortune in the long run.