investing

Five reasons why investing in mutual funds for a car now is better than taking a car loan five years later

Angela Manning Finance , ,
Five reasons why investing in mutual funds for a car now is better than taking a car loan five years later

Purchasing a car is one of the most considerable expenses an individual makes after buying a home. For many, purchasing a vehicle is a short-term goal, and you can opt for a car loan to meet the same. However, if you plan to buy a car five years later, you can start saving today. In this blog, we help you understand whether you should take a car loan or save for your car using mutual funds.

1. Car loans come with additional costs

All major banks in India offer car loans. Since it is secured by the car, the rate of interest is lesser than personal loans. But, other costs still exist that add up to increase the overall costs. These include processing fees, document charges, and GST.

2. You pay much more with a car loan

Many banks offer 80% to 90% of the car’s price as a loan. Thus, to buy a car, you need to pay 10% to 20% from your savings. For example, if your car’s on-road price is Rs. 15 lakhs, you need to pay Rs. 1.5 lakh or Rs. 3 lakh as a down payment.

Interest is one of the primary costs you pay over and above the principal amount of the car loan. The interest amount is calculated based on the loan amount, interest rate, and loan tenure.

Let us understand this in more detail with the following example.

For your car worth Rs. 15 lakhs, you paid 10% (Rs. 1.5 lakh) as a down payment. The loan amount will be Rs. 13.5 lakh. Suppose the bank charges 8% as the interest rate and the tenure is 5 years; your monthly EMI is Rs. 27,373. Your total interest payout equals close to Rs. 2.92 lakh.

So, a car loan is quite expensive. You pay a lot more than the car’s value as interest and other charges.

3. Your car is a depreciating asset

The value of your car is depreciating. Instead of paying a particular amount as EMI every year, you can choose to invest in monthly SIP and earn returns, which can help you earn more than the principal loan amount at the end of five years.

4. Car loans do not carry any tax benefits

Car loans are categorized as bad loans. You cannot avail of any tax benefits on the same, unlike home loans and education loans. Thus, these are expensive loans.

5. Mutual funds offer superior returns

Equity mutual funds are great for achieving long-term financial goals, such as children’s education, retirement, etc. But, if you are interested in goal based investing and have five years at hand to buy your new vehicle, hybrid or debt funds are ideal for you.

In conclusion

When you have to choose between a car loan or mutual funds, the latter is always better. The Tata Capital Moneyfy App is an ideal choice for new investors. It makes you investment-ready within minutes to make the most of the goal-based investment options.

Five Great Advantages for Investing In the Stock Market

Angela Manning Finance , , , ,
Five Great Advantages for Investing In the Stock Market

Whether you are saving for retirement, purchasing real estate, beginning a family, or just to have a secure nest egg, choosing stocks to invest in is a profit-bearing investment.

The reason people take the risk to invest in stocks is that this system yields the highest return for your money. Also, the longer you invest in stocks, the better your money will perform for you.

The more you learn your way around the stock market the higher your money will be for whatever your financial goals are in life. Owning stocks will help you build on your savings. Investing in stocks also helps to protect your money from taxes, inflation, and other financial losses. You might notice some Amazon insider trading going on. See what the insiders at Amazon are doing and ask yourself if you should be doing it too.

Investing in other forms of financial ventures may require a larger stock market investment than you can afford right now. For this reason, the best return for your money is stock investments. Yes, investing in stocks can be risky but any success in the market will depend on you.

The more you know about stocks, the better your returns. There are many benefits to invest in the stock market. Let’s look at five great arguments in favor of investing in the stock market:

1. Stocks Are Easy to Buy and Sell

The market makes it easy to buy shares in businesses. You can buy them through brokers, through a company’s 401(k) and IRAs, or daily in the market on your own. When you have established an account, you can start buying stocks. There are varying stocks you can buy for just a few dollars and you will be guaranteed a good financial return.

Buy low and sell high. Buying low means watching the stocks as your company investment does not look good, then purchasing shares hoping that it will go up. Selling high is watching the market to see if your stock purchase is increasing. Then at a high, investors can sell their shares for a nice financial reward. A recent example of this strategy was the amazing return of the GameStop stock.

2. Diversification

Putting money into different types of investment products, a stock market investment is one of the benefits of diversifying your portfolio. That is why diversification in the stock market is better for investor portfolios.

Having a combination of small, mid, and large-cap stocks will help you weather losses. Small and mid-cap stocks give you a better chance to grow your investment. Large-cap stocks are a stable investment with good profitability.

3. Dividend Income

Dividend income can be obtained through some stocks. No, not every stock provides dividends, which is why you must do your research. However, those stocks with dividend options provide an annual payment to investors.

Why choose stocks with dividends? Because if the stock loses value, it still generates income for investors. Added profits are yours if you sell the stock. Dividend income helps individuals who are planning for a rainy day. You can also take the extra money to reinvest in the stock market.

4. Invest in Stocks for Tax-Free Profits

There several types of tax-free accounts offered by the U.S. Government whereby you don’t need to pay taxes on your investment. The strategy of not paying taxes on investment gains begins by selling an investment stock with a tax-bearing long-term capital gain in the year that you are due an income. Your gains are not taxed. To be tax-free it is best to invest in stock investments like mutual funds or investment exchange-traded funds (ETFs).

5. Stocks Help to Beat Inflation

Rising prices mean more profit for companies, which in turn boosts share prices. Investors understand that stocks rise faster than the losses that inflation creates. Investing in stocks helps to protect your money from the downward spiral of the effects of inflation but stocks continue to guarantee you good returns.

Rising prices mean more profit for businesses, which boosts share prices. Granted that some stocks are better than others which is why investors must research the right company to invest in.

6. Borrowing Power

Investors with diversified stocks can use their investments to borrow money to pay off debts. You can borrow at lower rates than anywhere else. Yes, you will need to pay interest but the terms are user-friendly and more flexible. Investing in stocks helps to build up wealth, allowing you to take loans against a stock. You can access from 50% to 95% of your stock value.

5 Golden Rules for Beginner Investors in the Stock Market

Angela Manning Finance , , ,
5 Golden Rules for Beginner Investors in the Stock Market

With the high rise in inflation rates, your salary may not suffice all your needs. You can invest your money in real estate, mutual funds, fixed deposit schemes, and many others for good returns. The most attractive and appealing area of investment currently is the stock market investment.

It is a place filled with opportunities and massive potential profits. However, it is a risky investment, even for financial experts. Your success in this market mainly relies on the strategies you use. Read on for five golden rules you can adopt to smoothen your new stock market experience:

1. Avoid Tips and Rumors

When you are involved in the stock market, you are bound to come across market tips and rumors from many sources. Your colleagues and friends may also provide you with buying and selling tips. Some of these may help you, but the majority are just rumors. You may also apply the appropriate tips at the wrong time since the market is continually changing. The following are the common stock market rumors you are likely to encounter:

  • Sale of Unit: It is a rumor that an organization sells its stake and leaves its shareholders with a high share value
  • Corporate Governance: The news that a promoter is involved in the mismanagement of company funds lowers stock prices
  • Plans for Raising Funds: Any news about a company raising funds pushes the prices up
  • Other rumors you may encounter are pledging and delisting of shares. You can always monitor the prices by looking at the stock analyst ratings. This way, you can make better, informed choices

2. Invest Only What You Are Willing to Lose

As mentioned earlier, stock market investment is a risky venture. Therefore, it is normal to be overly cautious when starting. You should avoid using up all your savings since you are not safe from losing everything. Before you decide to invest in the stock market, consider the financial hardships you may go through if you lost your entire stock.

A big mistake that you should avoid making is using a loan as an investment. With the risks that are involved, you may find it challenging to pay back the money. Small investments are cheaper and allow you to be more flexible. If you are a small business owner, you can protect your business by investing some of your profits in the stock market.

3. Monitor Your Investments

Unlike fixed deposits, you cannot invest in the stock market once and forget about it. It is volatile, and the prices frequently change along with the organization. Below are five ways to keep track of your stocks:

  • Keep up with the market trends by checking in to financial news sites
  • Set up a free portfolio tracker with sites like Google Finance and Yahoo Finance
  • If your portfolio tracker offers automatic alerts, sign up to receive emails or text messages about changes in your stocks
  • Read the annual report, which is an appreciable research tool for stock investors
  • If you are involved in individual stocks, check-in with each of the company’s quarterly earnings calls

4. Invest in Companies You Know and Understand

With the risk involved in stock investment, you should have enough information about the company you want to invest in. If you are passionate about cars and often purchase automotive magazines, you can choose a company from the automotive industry. When deciding on where to invest, you can consider the following about your options:

  • Financial health as shown by annual and quarterly financial reports
  • Nurture
  • An organized and easy to understand the business model
  • Willingness to pay dividends

5. Diversify

It is one of the oldest strategies you can use in stock market investment. Investing in a single company is too risky, just like you should never put all your eggs in one basket. There comes a time when a company does not perform well hence decreasing the value of your investment.

It is safer for you to have a combined investment of small, mid, and large-cap stocks. Small and mid-caps have higher chances of growing your investment and returns, but there are risks involved. Large-cap stocks are mainly stable with good returns. Beginners should always start with small and mid-cap stocks depending on how much they intend to invest.

The five rules above are a big step towards stock market investment for beginners. Investors who stay focused and avoid rumors experience massive opportunities from this market.

Why Now Is the Time to Think About Gold as an Investment

Angela Manning Finance , , , ,

The odds of a recession in 2019 or 2020 are on the rise. Economists predict that there is now a 25% chance of a recession in the next year, up 5% from January. The likelihood of a recession in the next two years is 40%, and economic policies such as trade war with China are not helping the odds.

With a recession on the way, it may be time to start thinking beyond stocks when it comes to your portfolio. A recession can do a number on your portfolio, but there may be some surprising solutions. Gold could be your lifeboat in the coming storm. Few investments are better at weathering bad news in the economy than gold.

You need to think about gold as an investment, not just expensive jewelry. Consider some of the ways in which gold acts as an investment.

#1 Tangible Assets

Gold is unique in that it is an asset you can hold in your hand. Gold comes in the form of coins and bars and it must be physically stored. Unlike stocks and bonds which are paper (or digital) representations of your capital investments, gold is literally solid.

#2 Liquidity

Gold can be turned into cash wherever you are in the world. It’s the original international exchange of value and, until the 1970s, it was gold-backing that lent the U.S. dollar its international dominance. The most readily accepted form of gold is the bullion-grade 1 oz. gold coin. Bullion-grade refers to purity: .99 purity (24 karat and higher than most jewelry) is the easiest gold to exchange.

#3 Low Third Party Risk

You can further reduce the risks of owning gold by going with non-bank, fully-insured storage. The issue with bank storage is that your gold then becomes a deposit and you a depositor. In the event of another financial crisis on the scale of what the world saw on 2008, governments could introduce bank bail-in legislation (where they haven’t already), a regime in which banks that need a cash infusion take it from the investors and depositors rather than from taxpayers. Depending on how bail-ins are implemented, even small savers could be affected.

#4 Other Gold Risks

Every investment comes with risks, and gold is no exception. It pays to pay attention to gold prices before you buy. Have they been climbing rapidly in recent days, weeks, or years? That could be a sign of overbuying and an imminent price plummet.

It’s ultimately impossible to predict exactly which way gold prices are going to go depending on market factors, but use some common sense before you invest. Gold is riskier if a bull market has been raging for years already. Gold prices tend to fall due to speculation overvaluing it, and growing opportunities on the stock market.

#5 Why Gold Is Good

Gold is a good asset for investors who need to reduce their risks. Gold is a way of protecting your wealth from stock market jitters, global uncertainty, and inflation. In countries in crisis, gold can be a lifeline for families when inflation renders currencies worthless. For U.S. investors, gold provides some portfolio balance. Diversification leads to a stronger portfolio.

Gold can play an important role in your portfolio. If you’ve always treated gold as jewelry, it’s time to start thinking about how you can use it as an investment vehicle.

From Mortgages to Home Inspection Costs: Getting your First Home

Angela Manning Finance , , , , ,
From Mortgages to Home Inspection Costs: Getting your First Home

Souce: Flickr

The dream of owning a home is something that still motivates many Americans. Owning your own home isn’t simply about having somewhere to live for as long as you want, it is also about making what could be a profitable investment in your family’s future.

And even though younger generations of Americans have seemed more reluctant than their parents or grandparents to join the ranks of homeowners, studies have shown that the vast majority of millennials still expect to own their own home at some point in their life.

But for those who are embarking on home ownership for the first time, the process of finding and buying a first home can be intimidating. Here are some key things to remember if you are thinking of taking the plunge and becoming a homeowner.

Financial Self-Assessment

The starting point to the home-buying process is to make sure that your finances are as strong as they can be. To start with, take the time to run a credit report on yourself, and analyze the results. Doing what you can to improve your credit rating, such as paying off credit card balances, can help when it comes to taking out a mortgage, and if your credit rating is likely to take a few months to improve, then it is worth taking this time out before beginning the house buying process.

Prepare Financially

Once you’ve done a little financial housekeeping, the next step is to assess how much money you can afford to spend on a house. This includes the level of deposit you will be able to afford, and the approximate amount you will be able to pay in mortgage payments, taxes, interest and insurance, along with an allowance for future maintenance costs.

Home Inspection Costs

Another expense that you should prepare for is the cost of the home inspection. There are plenty of resources online to help you find out more about home inspections, but essentially this is a report that you have to carry out later on in the process, after you have found a home and made an offer. Some home buyers make the mistake of overlooking this home inspection cost early on and may not have funds available to compete the inspection report, so make sure you put money aside at the start.

Realtors and Mortgages

The next stage is to find a real estate agent that you feel you can work with as you start your home search. A good agent will not only work with you throughout the process, they will also help you to get in touch with the different specialists, including financial advisors and home inspectors, whose help you will need to buy your property. And it is a good idea to go through your mortgage options with a financial advisor at an early stage. A key aspect of choosing the right mortgage is to work out how much money you have to put down as a deposit, but beyond this factor, there are many types of mortgages from conventional loans to FHA loans and VA loans, and a good financial adviser will take into account your circumstances and financial history to help you find the right one.

Starting Your Search

Whether your agent is sending you potential properties, or you are doing the searching yourself, start by narrowing down the areas in which you would like to live. If you are unable to find anything suitable within that area, be prepared to expand it. Then it is simply a matter of taking the time to visit the homes you are interested in, asking as many questions as you can think of and being prepared to make further visits as required, until you have found the best home for you.

Securing Your Home

Making an offer and having it accepted is only the start of confirming the purchase. There will still be many weeks and a lot of paperwork to get through, including the home inspection report mentioned earlier, before you are able to sign contracts. Don’t forget to put some money aside to cover additional closing costs, which can often amount to as much as five percent of the sale price. You will also usually have a final chance to look around the place before you move in, to make sure that there have not been any significant changes since you made your offer. And with all that complete, you are ready to take ownership of your new home!

Buying your first home can be a stressful process, but by making sure that you plan thoroughly and leave as little as possible to chance, you can keep the stress to a minimum and achieve your dream of home ownership as quickly and smoothly as possible.

The 3 ingredients of a private equity investment decision

Angela Manning Finance , , ,
The 3 ingredients of a private equity investment decision

It’s a form of investment that is constantly grabbing the headlines and over recent times, really seems to have picked up the pace. However, if you were to question the Average Joe about the bread and butter of private equity investments, there’s every chance that you would be met with a blank look.

In short, this can be a complex type of financing and one that is difficult to get your head around. One element that is quite simple is the way in which investors approach it though. Whether it’s Marc Leder from Sun Capital, or a completely different investor from the other side of the world, most have very similar principles when it comes to private equity investments.

This is what we are going to be looking into today; as we scour through three of the key ingredients that form the typical private equity investment.

A good management team

One of the big misconceptions about private equity is that all groups are looking for an immediate change in management, as soon as their investment is finalized. Generally, this isn’t the case.

An investment team would much prefer to take control of a company which has an impressive management team. This is because the existing team already has inside-knowledge of the company; they know what is working well, and what is necessary for improvement.

If a company is forced to completely change the management, there are all sorts of issues to combat. They will firstly have to pay to replace the team, before then waiting for the new management to learn the internal processes of the company before they can implement any sort of change.

The potential for growth

This is related to both the market, and the company in question. One of the main requirements for a private equity company is the potential for high growth. Without this potential, their investment just isn’t going to work. Most approach companies with an exit strategy, which obviously will depend on a high rate of growth.

As such, they need to analyze firstly if the market has any potential for growth. From this point, they need to see if there is any space for this company to grow. In particularly small markets, this might not be possible, so a great deal of research will be placed into this area before the investment is made.

A good reputation

This is perhaps one of the more surprising elements of private equity, but one of the big things that investors look out for is a good reputation.

This is something that can only be harvested through time, which is one of the reasons why it’s regarded as being so important. A company can’t suddenly decide to buy an enhanced reputation; it’s something that can take years to build up.

As such, if there have been reputational problems in the past, this might mean that a private equity firm isn’t as interested in your company as you initially might have thought.

Important Considerations Before You Buy Your Next Home

Angela Manning Finance , , , , , , ,
Important Considerations Before You Buy Your Next Home

Buying a new home is a very exciting milestone in your life. It’s a huge decision that requires a lot of your time and energy. You have to do your homework to find the right property for you and your family, and hope that what you’re moving forward with is the right choice for everyone involved. Before you uproot your entire life, though, you need to first ask yourself a series of important questions. Not only can this fill you with confidence, but can also bring excitement to a new chapter in your life.

Can You Envision Your Style?

Before you purchase any furniture, you need to determine your new home’s overall theme. If you like everything vintage, then see if your house matches that style. However, if you prefer a more timeless and classical approach that matches any house’s interior or exterior, then looking for a seller that deals in contemporary furniture is ideal. Start with each room and picture what furniture you’d like to include. If you want a modern bedroom, then stylish modern beds from Lumens can be the centerpiece of your bedroom. If you want a contemporary living room, then hang statement lights that act as art but are also functional.

How Much Work Will You Need to Put in?

Take a look around and understand the condition your potential property is in as it stands. Read through the inspection papers and make sure you’re clear on what needs fixing and what can wait. Talk with your spouse and agree on what projects you’re willing to do yourself and which ones will require you to hire a contractor. Remember that it’s not only money, but also your time and energy that’s going to be spent in redecorating or renovating this house.

Do you like the Neighborhood?

Although you like the house, consider if the neighborhood is a good fit for you and your family. Walk around, go to the stores and drive through the areas outside of your specific neighborhood. Talk to people you see on the street and do research into how the schools are rated. You have to immerse yourself in the scene to get a true feeling for what you’re getting yourselves into. Don’t let your love for the house sway your decision one way or another. You have to evaluate the neighborhood on its own and decide if it’s a good fit.

Is there Space to Grow?

You might love the way the house you want to buy looks and feels. However, determine if it’s going to meet your needs as your family grows and matures over the years. Think about whether you want to have any more kids and how much stuff you’ll need to store as the kids grow older. It may not be a smart move to purchase a place that barely fits you and your family if you’re looking to expand.

Conclusion

When it comes to buying a house, whether it’s your first or fourth, you need to think clearly and carefully about the property in question. Rather than rush into such a move, consider the questions listed above and make a logical decision with your whole family in mind.

Bodybuilding On a Budget: The Best Affordable Supplements

Angela Manning Finance , , , , ,
Bodybuilding On a Budget: The Best Affordable Supplements

If you’re a body builder on a budget, then we’re here to help! Check out this awesome list of the best affordable supplements out there.

What are your fitness goals?

Whether you’re looking to lose weight, build muscle or improve your performance, supplements can help you along the way.

Nutritional supplements have several health benefits. Unfortunately, they can also be very expensive. You don’t have to shell out on endless amounts of pills and powders to get results.

In this post, we’ll tell you how to supplement the right way. Read on to find out which affordable supplements you should be taking.

5 Affordable Supplements You Need to Try

Don’t waste money on useless, ineffective supplements. These 5 products are all you need.

1. Whey Protein

For many fitness enthusiasts, whey protein is a staple of their nutrition and training program.

The amount of protein you need will depend on your bodyweight as well as how often you exercise. No matter what the figure is, it can be difficult to achieve through your standard three meals a day. This is especially the case for those with busy lifestyles.

If you struggle to consume enough protein through your usual food intake, whey protein is perfect for filling the deficit. It’s a fast, convenient and effective protein source, which you can carry with you to the gym and take immediately after your workout.

It’s also a great way to get the right amount of protein without any added calories or fat. Most protein powders have around 20 grams of protein per serving, with very few added ingredients.

If you’re vegan or lactose intolerant, you can still enjoy the benefits of protein powder. There are plenty of plant-based versions available, including pea protein, soy protein, quinoa protein, and more.

Lots of powders contain extra amino acids, too. There are thousands of different products on the market for you to try. Read more about the different types of whey protein available and find the best one for you.

2. Creatine

If there’s one supplement you can’t do without, it should be creatine.

Unlike many other affordable supplements elsewhere, it’s backed by solid science. Creatine is scientifically proven to increase muscle mass and improve performance.

It helps your body to produce more ATP so that you can workout at a higher intensity. If you use it correctly, you may find that you’re able to sprint faster, jump higher, or complete more reps in the long run.

Creatine is also one of the most affordable supplements because you don’t need to take the same amount every day.

When you first begin supplementing with it, you start with a loading phase. This usually involves taking up to 25 grams of creatine a day for five days in order to saturate your muscle cells.

After those five days, you can reduce your intake. From there, you only need to take 3-5 grams a day in order to maintain your creatine levels.

You don’t need to consume scoop after scoop of creatine to feel the benefits. Just a small amount every day is enough to keep you going and produce results.

3. Branched Chain Amino Acids (BCAAs)

You need more than just protein in order to build muscle.

Your body needs other ingredients, too. That’s where branched chain amino acids come in.

BCAAs are the building blocks of protein. They stimulate muscle synthesis, which helps your body make the gains you’re working for.

They also help with your recovery, too. If you take BCAAs during your workout, you’ll have less muscle soreness than usual. You’ll also become less fatigued, as your body won’t use up so much glycogen.

Taking BCAAs is easy. Simply mix one or two scoops of powder into your water, then drink it while you’re working out.

You don’t have to worry about the taste. Most supplement manufacturers add flavorings to make their BCAAs taste great. There are hundreds of different products available, with different fruity and refreshing tastes.

The recommended dose is 5-10 grams per day. For most products, this amounts to no more than $1 per serving.

4. Glutamine

You can’t build muscle without glutamine.

It’s one of the most important products for athletes and bodybuilders. It’s also one of the most affordable supplements out there.

This valuable amino acid draws water and glycogen into the muscle cells, making it more readily available to use.

As well as providing energy for muscles, it also does the same for the immune system. Frequent, rigorous training can take a toll on your body, and if you don’t take the right supplements, you could leave yourself more susceptible to illness.

Glutamine keeps your body in tip-top condition, so you can feel your best for every workout.

This essential supplement doesn’t break the bank at all. A bottle of glutamine capsules should only cost you around $10. If used correctly, that will last for a whole month.

5. Fish Oil

Fish oil isn’t just for old people. Every athlete and fitness enthusiast should be taking it, too.

This is because the Omega-3 fatty acids it contains are vital to the body. The body can’t make these fatty acids on its own, and it’s difficult to get enough in your diet.

Even if you eat a lot of fish, nuts, and avocados, you still may not get all of the Omega-3 fatty acids you need.

These acids decrease muscle breakdown and increase protein synthesis, making it easier to build muscle mass. They also improve your heart health, so you can be a better athlete overall.

Be Healthier and Happier

Exercising regularly is a great way to live a healthy and balanced life.

As well as working out, you need to keep your diet in check, too. This doesn’t just mean cutting treats out of your diet and counting calories. It also means eating the right foods in the right amounts at the right times.

Supplements can help you do that.

As well as these affordable supplements, there are other products you can use to help you get in shape. Find out more about how natural weight loss supplements can help you.

What to Look for in an Investment Property: A Beginner’s Guide

Angela Manning Finance , , , ,
What to Look for in an Investment Property: A Beginner’s Guide

Investing in real estate isn’t just about finding the best deal, there’s many other factors to consider. Read on to learn what to look for in an investment property so you don’t waste your money.

If you’re considering buying an investment property, it can be incredibly confusing to figure out where you should start.

From setting a budget to finding a real estate agent and trying to figure out how to finance remodeling projects, it’s easy to get overwhelmed before you even begin!

However, it’s no secret that investing in real estate can become lucrative fairly quickly. Especially if you’re interested in mastering the fine art of passive income, buying a rental property is an incredible opportunity.

Of course, if you don’t make smart, measured choices, buying investment property is also an excellent way to lose a large portion of your savings seemingly overnight.

In this post, we’ll tell you what to look for in an investment property.

Read on to feel confident about the decision you’re making when it comes to your first ever real estate investment.

1. Take a Hard Look at your Finances

Before you figure out what to look for in an investment property, the first thing you need to do is examine your personal finances.

In today’s world, the average American household is over $137,000 in debt.

If this describes you, then you need to think long and hard about whether or not now is truly the right time for you to buy a rental or investment property.

Take a look at your financial future, as well. Even if your debt levels are under control, what sort of upcoming expenses do you have coming up?

Are you nearing retirement? Do you have children you’ll soon need to put through college? Are you in over your head when it comes to your student loans? What about your medical expenses?

Make sure all of these things are manageable to avoid a financial disaster.

Further, you need to understand that the cost of a down payment on your investment property will likely be a bit more expensive than a traditional home buying experience.

In most cases, buying a rental property will require you to pay about a 20% down payment up front. Ensure this is a sum you’re comfortable with before you make any final decisions.

2. Don’t Forget your Expenses

When you’re buying an investment property, it’s also essential that you take the time to figure out what your operating expenses will be.

This can help you to have a more accurate understanding of how large your profit margin will really be — and help you to determine a good rental price.

You’ll need to consider:

  • Property taxes
  • Heating/electric bills
  • Water bill
  • Unexpected repairs
  • Garbage collection
  • Insurance
  • Maid/cleaning service
  • Any property management fees

Another important thing to think about when you’re calculating your operating expenses?

How much interest you’ll need to pay each month on any money you borrowed in order to finance the purchase of your investment property.

This is why it’s always a smart idea to shop around with several different lenders before you make a final decision.

Remember, it’s always better to go for the option with the lower interest rate. Yes, even if those with high interest rates off you more money.

3. Resist the Fixer-Upper

We know that, when you’re trying to understand what to look for in an investment property, it can be tempting to go for the fixer-upper.

After all, you’re getting the home at a great price, you’re able to start work on it sooner, and it has an easier closing process than most. Not to mention, you’ll also have a fun and exciting project to work on over the next few months.

Here’s the reality check that you need: home renovation costs are skyrocketing.

In fact, they can quickly run to over $50,000 depending on the size of your home and the kind of renovations you need done.

Don’t be fooled by the seemingly “cheap” cost of run-down fixer-uppers. Especially if you’re new to the world of real estate investing, it’s simply not the place you want to start.

Plus, keep in mind that the overall timeline of the renovation projects will make it difficult for you to turn a profit quickly. You won’t be able to start renting out your property until all of your renovations are complete.

And even if you’re able to set a firm deadline with contractors, things like poor weather, a lack of the required materials, and even worker injuries can slow down the process — and end up costing you even more money.

4. Consider the Neighborhood

When you’re buying a rental property, one of the most important things to take into consideration is the neighborhood that the apartment or home is situated within!

After all, no one wants to live in an area where they feel unsafe, or where they can’t get the things that they need.

Look for a space that’s located somewhere near the center of town. Walkability and access to central transportation hubs is especially crucial if you’re more in the market for short-term or vacation renters that don’t really know the area.

Of course, you should also make sure that there are plenty of things for your renters to actually do in the area where your property is located.

Be aware that your neighborhood will also be a huge influencing factor on the type of people that are most likely to rent out your property.

So, if you’re concerned about a bunch of college kids renting out your property and causing thousands of dollars in damage Then you might not want to buy a property that’s close to a university.

You should also look into the rules surrounding rental properties in the areas that you’re interested in. Remember that you may need to pay additional fees in order to rent out your space, or meet with community board members to ensure that you’re on the same page.

5. Consider the Long-Term Investment

When you’re trying to learn how to buy investment property that will appreciate over time, it’s important to consider how you think the area will develop in the future.

You don’t want to end up in a neighborhood that’s trendy right now, but might become too overcrowded in the future.

Take a look at your city’s development plans and try to determine how they might impact the overall value of your property in the future.

For example, if a large factory is slated to go up in the area you’re considering buying within? You can expect to lose some money when you try to sell it.

Also take a look at things like parks, nearby school, malls, and other kinds of amenities. These are all things that could certainly have a positive impact on the overall value of your rental property in the future.

6. Work with a Professional

In some cases, buying an investment property just isn’t something you can — or even should — attempt to do on your own.

From finding the perfect location to managing your property when you’re away or preparing it for a future sale, getting help is always a smart idea.

High Return Real Estate’s process is explained on this website.

Essentially, this company and others like it work to help you find the perfect property for the best possible price. Then, they take care of the renovations in order to ensure you can start renting or selling your home as soon as possible.

They even offer property management options, so that it’s easier than ever for you and your family to collect a passive income — without having to worry about the hassle of maintenance.

Then, they mail a check to you every month. Talk about taking the guesswork out of real estate investment properties in your area!

You Know What to Look for in an Investment Property

We hope that this post has done an excellent job of laying the foundation of what to look for in an investment property.

Remember to first make sure that now is truly the best time for you to invest in real estate. Pay down your debt, consider your operating expenses and interest rates, and make sure you can actually afford the down payment on your property.

Also, when buying a rental property, consider the neighborhood, the long-term growth potential, and whether or not you could benefit from professional help.

Looking for advice on how to upgrade your property? Need design and maintenance help? Want to pay down your debt so you can buy?

Check out our website and blog for tips on how to make all of this — and more — happen for you.

How to Choose The Right Investment Fund For You

Angela Manning Finance , , ,
How to Choose The Right Investment Fund For You

Choosing the right investment fund doesn’t have to be overwhelming and confusing. Click here to learn how to find the right one for you and your family.

Are you thinking of investing in a mutual fund? Not sure where to start or which investment fund is best for your needs?

In this article, we’ll cover everything you need to know about investment funds and finances, so you can pick the right one for you and your family.

Let’s take a look!

How to Choose the Right Investment Fund

Selecting an investment fund seems stressful, but it’s pretty easy if you go about it the right way. Here are our top tips that will help you pick the right investment fund for you.

Identify Your Goals and Risk Tolerance

The first step in picking an investment fund is knowing what you’d like to accomplish. Do you care more about current income or do you have long-term capital gains in mind?

There are many mutual funds available to investors, so identifying your goals is key to cutting back on your options.

Beyond identifying goals, you need to figure out your own personal risk tolerance. Are you okay with dramatic swings in your portfolio’s value or are you a business owner who needs the comfort of more conservative investments?

Risk and return are related to investments, so you need to balance your desire for returns with the risk you’re willing to tolerate.

Think About Your Timeline

How long do you plan on holding onto your investment? Do you think you’ll need to liquidate your investment in the near future? If so, you should know that many mutual funds have sales charges that can cut into your return.

To avoid these charges, you should aim for an investment horizon of five years or more.

Consider Charges & Fees

Most investments come with associated fees that you should know about before picking one.

Some funds will charge a load fee, which you either pay at the time you buy the fund or when you try to sale your investment.

The front-end load fee is what you pay out of the initial investment, and the back-end fee is what you’re charged when you sell your shares.

These charges can range anywhere from 3% to 8.5%. No, load funds don’t charge either of these fees, but they do have other fees that can be very high.

When reviewing an investment, always make sure to review the management expense ratio, as this will help you determine what your return would be at the end of the year.

Evaluate Any Portfolio Manager Options

When picking a fund, it’s important to research both the fund and the portfolio manager. Here are some questions you should make sure you ask when reviewing a fund’s previous performance:

  • Were the fund’s results consistent with general market returns?
  • Did the returns vary dramatically throughout the year?
  • Was there high turnover or larger tax liabilities?
  • What do I need to know about personal capital vs betterment?

The answers to these questions will give you insight into how this portfolio manager performs, and tell you more about turnover and return with this fund.

Final Thoughts on Choosing a Fund

Knowing how to pick an investment option is an important part of building your portfolio.

By following the tips in this article, you can pick the right fund for you, and start making money!

Is this your first time choosing a fund?

Have any other questions? Let us know in the comments!