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Monthly Archives: January 2017

Real Estate Investment Categories

Leasing a property, after all, is a great way to add to your income and increase your assets; perhaps, a good form of wealth management for sure. Whether or not real investors consider using LLC, — a legal structure that protects you from certain losses that may otherwise happen in real estate investments — they would be investing in any one of these categories.

Multi-Family Residential Investment

Investing in residential real estate means acquiring properties such as apartment buildings, houses, vacation houses, townhouses and more, where a person or family pays rent for using your property. Leasing involves formulating a lease or rental agreement, which determines your tenant’s duration in the property. In comparison to other real estate investments, this is the most stable, as people always need a house to live in.

Commercial Investment

When people invest in commercial real estate, they mostly purchase office buildings. You might have seen many people constructing small buildings that have multiple offices. These properties are, usually, leased out to companies and other small business owners who pay rent just the way a tenant pays for rent for using a residential property. Owing to high operating costs involved, though, losing a tenant may substantially impact your ROI when investing in commercial real estate. Still, this category remains the choice of many real estate investors these days, as such properties are, usually, in downtown areas and generate good revenues.

Retail Investment

All the big shopping plazas, complexes, malls and retail front stores that you see around are examples of retail estate properties. The only difference is that these properties are used not for people, but for commodities and other services. In many cases, investing in a retail real estate also gives you the opportunity to receive a percentage of sales other than the rent your tenant pays you every month. Prominent supermarkets such as Wal-Mart — much in use and demand — are ‘anchors’ that lure more investors in the retail real estate. Various factors that drive this sector, however, include the property’s location, nearby population density, and visibility, among others.

Industrial Investment

Investing in industrial real estate is one of the best ways to optimize your investments, as it, generally, brings along with it a lot of revenue in the name of “fee” and “services”. Industrial real estate investment includes car washes, storage units and more. Properties falling under this category may be used for a variety of purposes such as manufacturing, warehousing, researching, distribution and development.

Investment Options For NRI

Post 2000 A.D, taxation policies have become favorable for NRI investment in India. Provisions are being made to favour investments from NRIs, but the only drawback is, unlike resident Indians, they can’t invest in just any type of instrument they desire to.

If An NRI Wants To Invest In India, They Must Choose Between One Of Three Kinds Of Savings Accounts:

Non-Resident (External) Rupee Account (Nre Account):Should be in INR. NRI’s can keep their earnings and savings managed in their country of residence in INR in this account. There is no income tax generated on such accounts.

Non-Resident Ordinary Rupee Account (Nro Account): Should be in INR. In this account, NRI’s can keep any sort of income through rent, dividends, etc. in this account. Income tax is generated on such accounts.

Foreign Currency Non Resident (Bank) Account- Fcnr (B) Account: Can be in any defined currency, used for keeping fixed deposits (in FCY) for a period of up to five years or less. There is no income tax generated on such accounts.

While Choosing From A Host Of Options For NRI Investment In India, It Is Important To Remember To A Couple Of Points:

Choose an investment that can be repatriated should an emergency arise in his country of residence.Ensure tax avoidance.The country of residence could have certain prohibitions on different instruments. For instance, in the US, there is a restriction that only funds registered in the US Securities market can accept a US based NRI’s money.

Keeping In Mind The Above Factors, Below Are Investment Options For An NRI

NRE Fixed Deposits

These can easily be repatriated and any income from interest on these deposits in tax exempted. They are flexible and can be broken easily and transferred the NRE Savings account to be repatriated as and when needed.

Government Securities And Bonds

Such investments can be purchased with a lock-in period of at least three years. Should these investments be made from the FCNR/NRE account of the NRI, the sale proceeds on sale of these instruments would be credited to the same accounts so that the proceeds could be repatriated if needed.

1. Mutual Funds

These investments can be made only from the NRE/NRO/FCNR account of the NRI. Another way is through “inward remittance”. Should the NRI seek to repatriate the earnings or money invested in mutual funds, a lock-in period of three years would be needed.

2. Nro Fixed Deposits

Another option for NRI investmest in India is to invest in NRO fixed deposits. But it would be illogical to do so because such FDs carry the same interest rates as NRE accounts, and while the latter is tax free, income tax is generated on NRO accounts.

3. Equity Market.

Shares can either be purchased directly or through equity based mutual funds. This can be done through the NRI/NRE account of India.

Use Investments to meet Financial Goals

If you are planning to invest money, you are probably aiming to increase your wealth and put your savings to better use. After all, what is the point of simply leaving your cash in a savings account that offers you an incredibly low interest rate? Before making the decision to enter the world of investments, you need to know where to invest, as well as how to invest your money.

Where and how to invest

Generally, there are three different types of investments, namely ownership investments, cash equivalents and lending investments.

In terms of risk, ownership investments are probably higher up on the scale; however, these are the investments that tend to yield the best returns. They include investing in stocks, businesses, real estate and valuable objects. 1 When you invest money in stocks, you own a part of a business and thus share in its successes – or in its losses. When you invest in real estate, it all depends on the state of the market when you wish to sell again. The state of the market, along with the overall condition of the property, will determine whether you will make a profit or a loss. Investing in real estate is actually quite an art, which is why so many people look to brokers and realtors for assistance. Lastly, when you invest in valuable objects, such as cars and gold, you need to keep in mind that the market, once again, is unstable and that the objects will depreciate in value over time.

Lending investments include your savings account as well as any bonds that you might have. Bonds are fixed income securities and refer to the process of ‘lending’ your money to businesses or to the government for a specific time period in exchange for a set interest rate. 2 The longer that you choose to lend out your money, the higher the interest rate will be. The amount that you invest will also have an impact on the interest rate that you will receive. These investments are low risk; however, they do not present you with the opportunity to enjoy large financial gains similar to that of ownership investments. Despite this fact, they are definitely good choices for all investors as they are very easy to manage.

Cash equivalent investments are easy to convert back into cash, making them the ideal choice for those who are looking to invest but who don’t want to lose control or access to their finances in the process. Money market funds are a good example of this type of investment. The returns are small, but the risks of experiencing any losses are low.

Before making any decisions about your savings and investments, it is always wise to consult with someone who has a lot of experience in the field, or with a professional who can appropriately advise you. The real key to reaching your financial goals through investments lies in your ability to plan ahead and make smart, long term decisions with regard to your funds. Happy saving!

Benefits of a Good Credit Score

Lower Interest Rates

When you first provide your information for your credit card application, your respective bank will offer you an interest rate that is based on previous credit scores. Interest rates are one of the factors that influence your monthly repayments and a bad credit score can result in hefty rates which contribute to an even larger monthly repayment. However, a good credit score can encourage your bank to offer you lower interest rates on your monthly repayments. Not only will this eliminate the added pressure of an extra fee, but it will also assist you in ensuring the timely repayment of any debt.

Higher Chance of Loan Approval

There comes a time when everyone aspires to own their own home, send their children to university or pay for a once-in-a-lifetime holiday. There are few people who can afford to turn these dreams into a reality without financial assistance. However, for the rest of us, with the help of a personal or home loan, these dreams and aspirations are quite plausible. A good credit score will yield a higher chance of loan approval while a negative score leads the bank to believe that you’re not reliable. Keep your future in mind and opt to pay off your credit card debt.

Approval on Higher Credit Limits

Did you know that your borrowing capacity is based on your income as well as on your ability to repay debt that is owed to your financial service provider? If you are able to repay your credit card debt in a timely manner, it is possible that your bank will increase your credit limit. It is important to treat this increase as an appointed fund for emergencies or ‘rainy days’. Otherwise, you might just get yourself into a trap and erase your existing credit score.

Understanding the importance of a good credit score can motivate you to pay off your credit card debt and aim for a positive score that can one day assist in making your dreams come true.