Introducing Kids to Money
Money gives people -- both young and old -- decision-making opportunities. Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend. Everyday spending decisions can have a far more negative impact on children's financial futures than any investment decisions they may ever make. Here are 15 simple ways to help educate children about personal finance and managing money:
1. As soon as children can count, introduce them to money.
Take an active role in providing them with information. Observation and repetition are two important ways children learn.
2. Communicate with children as they grow about your values concerning money
How to save it, how to make it grow, and most importantly, how to spend it wisely.
3. Help children learn the differences between needs, wants, and wishes.
This will prepare them for making good spending decisions in the future.
4. Setting goals is fundamental to learning the value of money and saving.
Young or old, people rarely reach goals they haven't set. Nearly every toy or other item children ask their parents to buy them can become the object of a goal-setting session. Such goal-setting helps children learn to become responsible for themselves.
5. Introduce children to the value of saving versus spending.
Explain and demonstrate the concept of earning interest income on savings. Consider paying interest on money children save at home; children can help calculate the interest and see how fast money accumulates through the power of compound interest. Later on, they also will realize that the quickest way to a good credit rating is a history of regular, successful savings. Some parents even offer to match what children save on their own.
Allowance and Spending Decisions
6. When giving children an allowance, give them the money in denominations that encourage saving.
If the amount is $5, give them 5-1-dollar bills and encourage that at least one dollar be set aside in savings. (Saving $5 a week at 6 percent interest compounded quarterly will total about $266 after a year, $1,503 after 5 years, and $3,527 after 10 years!)
7. Take children to a credit union or bank to open their own savings accounts.
Beginning the regular savings habit early is one of the keys to savings success. Remember, don't refuse them when they want to withdraw a portion of their savings for a purchase--This may discourage them from saving at all. You can also introduce children to mutual funds or create a college fund for them as well.
8. Keeping good records of money saved, invested, or spent is another important skill young people must learn.
To make it easy, use 12 envelopes, 1 for each month, with a larger envelope to hold all the envelopes for the year. Establish this system for each child. Encourage children to place receipts from all purchases in the envelopes and keep notes on what they do with their money.
9. Use regular shopping trips as opportunities to teach children the value of money.
Going to the grocery store is often a child's first spending experience. About a third of our take-home pay is spent on grocery and household items. Spending smarter at the grocery store (using coupons, shopping sales, comparing unit prices) can save more than $1,800 a year for a family of four. To help young people understand this lesson, demonstrate how to plan economical meals, avoid waste, and use leftovers efficiently. When you take children to other kinds of stores, explain how to plan purchases in advance and make unit-price comparisons. Show them how to check for value, quality, repairability, warranty, and other consumer concerns. Spending money can be fun and very productive when spending is well-planned. Unplanned spending, as a rule, usually results in 20-30 percent of our money being wasted because we obtain poor value with our purchases.
10. Allow young people to make spending decisions.
Whether good or poor, they will learn from their spending choices. You can then initiate an open discussion of spending pros and cons before more spending takes place. Encourage them to use common sense when buying. This means doing research before making major purchases, waiting for the right time to buy, and using the "spending-by-choice" technique. This technique involves selecting at least three other things the money could be spent on setting aside money for one of the items, and then making a choice of which item to purchase.
Buying Smart
11. Show children how to evaluate TV, radio, and print ads for products.
Will a product really perform and do what the commercials say? Is a price offered truly a sale price? Are alternative products available that will do a better job, perhaps for less cost, or offer better value? Remind them that if something sounds too good to be true, it usually is.
12. Alert children to the dangers of borrowing and paying interest.
If you charge interest on small loans you make to them, they will learn quickly how expensive it is to rent someone else's money for a specified period of time. For instance, paying for a $499 TV over 18 months at $31.85 a month at 18.8 percent interest means the buyer really pays about $575.
13. When using a credit card at a restaurant, take the opportunity to teach children about how credit cards work.
Explain to children how to verify the charges, how to calculate the tip, and how to guard against credit card fraud.
14. Be cautious about making credit cards available to young people, even when they are entering college.
Credit cards have a message: "spend!" Some students report using the cards for cash advances and also to meet everyday needs, instead of for emergencies (as originally planned). Many of those same students find themselves having to cut back on classes to fit in part-time jobs just to pay for their credit card purchases.
15. Establish a regular schedule for family discussions about finances.
This is especially helpful to younger children--it can be the time when they tote up their savings and receive interest.
Other discussion topics should include the difference between cash, checks, and credit cards;
wise spending habits; how to avoid the use of credit; and the advantages of saving and investment growth. With teenagers, it's also useful to discuss what's happening with the national and local economies, how to economize at home, and alternatives to spending money. All of this information will be important as they take on more responsibility for their own financial well-being.
Adapted from "Dollars and Sense," in the April 1999 issue of Our Children, the official magazine of the National PTA®.
Paul Richard is executive vice president of the National Center for Finance Education (NCFE), a nonprofit organization dedicated to helping people learn to manage money.
P.S.
Teaching children about money doesn’t always have to be serious. You can make it fun by playing board games like Monopoly as a family. It brings the family together and it may spark an entrepreneur side in your child. Another board game that I would recommend is Cash Flow 101, Cash Flow 202, and Cash Flow for Kids. These board games are created by Robert Kiyosaki (Author of Rich Dad Poor dad) and are considered a great investment for you and your family. Whether you decide to invest in these board games or not is totally up to you. Just wanted to point out other ways of teaching kids about money that can be a fun, learning experience for your child.
Friday, May 9, 2008
Thursday, May 1, 2008
Some More Investment Tips
I am positive that you guys found the previous article helpful. Now here is another follow up. I don’t know if any of you has been watching the news or reading the paper lately. I mean it’s hard enough to turn the T.V. to CNN or whatever news station and not hear the R talk. RECESSION! What else is new? What we all need to be informed about is even though our economy is on its decline and probably will continue to decline throughout 2008. Chinas economy is booming and on the rise. So I decided to do my homework to see what possible investments in China can turn out to be profitable, and guess what? I smell opportunity.
China Business Economy
The average profit growth rate in the first quarter of 2008 for the 436 Chinese companies listed on the Shanghai and Shenzhen stock exchanges was an astonishing 50%! http://www.moneyandmarkets.com/Issues.aspx?The-Chinese-stock-market-comes-roaring-back-1710. Take into consideration of China’s business economy.
Food
Did anyone notice that the price of wheat increased. I mean it was like yesterday I could buy Kellogg’s Frosted Mini-Wheat for $6.99. Now I paid a little over $8 for the Mini-Wheat’s. At least give me more wheat!
This doesn’t only apply to wheat. We will see an increase in food prices in years to come. I received an e-mail from Money and Markets on 05/01/08 that lists the types of foods that went up in price, and will continue to rise
China Business Economy
The average profit growth rate in the first quarter of 2008 for the 436 Chinese companies listed on the Shanghai and Shenzhen stock exchanges was an astonishing 50%! http://www.moneyandmarkets.com/Issues.aspx?The-Chinese-stock-market-comes-roaring-back-1710. Take into consideration of China’s business economy.
Food
Did anyone notice that the price of wheat increased. I mean it was like yesterday I could buy Kellogg’s Frosted Mini-Wheat for $6.99. Now I paid a little over $8 for the Mini-Wheat’s. At least give me more wheat!
This doesn’t only apply to wheat. We will see an increase in food prices in years to come. I received an e-mail from Money and Markets on 05/01/08 that lists the types of foods that went up in price, and will continue to rise
- Corn, already up 177% in the past thee years, could triple in price.
- Soybeans, already up 111% in three years, could easily double again.
- Wheat, which has jumped 160% in the past three years, could surge another 400% to as high as $38 a bushel!
- And rice, which has already almost tripled in price, could triple yet again.
The prices of everything from eggs, to milk, to beef are also headed higher. I expect them to triple and even quadruple in the next few years.
This information was provided by Larry Edelson from Money And Markets.
Oil
The auto industry recorded 8.8 million vehicles sold in 2007, which is an increase of 11% from 2006. Put 2 and 2 together, and what we get is China’s demand for oil will only increase.
Conclusion
I always try to keep the blogs short and simple while trying to list as much information as needed. Nobody likes a long article that repeats itself over, and over, and over, and over again. Sorry. Anyways for more information on China’s economy I recommend you visit http://www.moneyandmarkets.com. Is investing in China right for you? I don’t know, but China is an investment opportunity that you might want to consider.
Posted on 05/01/08
Wednesday, April 30, 2008
Some Investment Tips
I just read an interesting piece from Martin Weiss on http://www.martinweiss.com/. He mentioned 3 investments to buy in today’s current economy.
Buy Prudent Global Income Fund (PSAFX)
This mutual fund is a good hedge against the dollar decline, because it holds mostly short-term, fixed-income securities denominated in foreign securities. What this means to you is when the dollar is decreasing like it is now. The value of the fund naturally goes up. Its euro investment is rising nicely in Germany, and may continue to rise due to expectations that the European Central Bank will raise interest rates. This fund is resistant to interest rate rises and declining bond prices. Invest in this fund
Buy StreetTracks Gold Trust (GLD)
This fund offers you an easy and convenient way to profit in the long-term market in gold. As long as inflation exists, the value of gold will continue to rise. Investing in this fund is like investing in gold without having to store actual gold coins and such.
Its prices roughly at 1/10th the price of gold. For example, if the price of gold is $1,000 an ounce. GLD will be $100 a share. This Exchange traded Fund (ETF) is great for the long-term investor, and individuals with a conservative side.
Invest In Coca-Cola Company (KO)
No matter if the economy is good, or bad. People will always consume nondiscretionary goods like soda, juice, and water can still generate profits in a recession.
Investors are flocking to companies that generate most of their revenue overseas. That’s because when our dollar falls, the yen, pound, or euro earned overseas are worth more in dollar terms. To see the currency exchange rate visit http://www.x-rates.com/calculator.html
Coke gets about 30% of its operating income from the European Union, 20% from Latin America, and 20% from the Pacific Rim and Asian nations.
Conclusion
For more investment tips you can visit http://www.martinweiss.com/. Hopefully there can be more investment tips that we all can benefit from. You can also read 6 Tips How to Profit In a Declining Economy on http://www.hachefinancial.com/ for more information. It’s a $1.99 investment to read, but it’s an investment that is worth every penny and some.
Posted by http://www.hachefinancial.com on 04/30/08
Buy Prudent Global Income Fund (PSAFX)
This mutual fund is a good hedge against the dollar decline, because it holds mostly short-term, fixed-income securities denominated in foreign securities. What this means to you is when the dollar is decreasing like it is now. The value of the fund naturally goes up. Its euro investment is rising nicely in Germany, and may continue to rise due to expectations that the European Central Bank will raise interest rates. This fund is resistant to interest rate rises and declining bond prices. Invest in this fund
Buy StreetTracks Gold Trust (GLD)
This fund offers you an easy and convenient way to profit in the long-term market in gold. As long as inflation exists, the value of gold will continue to rise. Investing in this fund is like investing in gold without having to store actual gold coins and such.
Its prices roughly at 1/10th the price of gold. For example, if the price of gold is $1,000 an ounce. GLD will be $100 a share. This Exchange traded Fund (ETF) is great for the long-term investor, and individuals with a conservative side.
Invest In Coca-Cola Company (KO)
No matter if the economy is good, or bad. People will always consume nondiscretionary goods like soda, juice, and water can still generate profits in a recession.
Investors are flocking to companies that generate most of their revenue overseas. That’s because when our dollar falls, the yen, pound, or euro earned overseas are worth more in dollar terms. To see the currency exchange rate visit http://www.x-rates.com/calculator.html
Coke gets about 30% of its operating income from the European Union, 20% from Latin America, and 20% from the Pacific Rim and Asian nations.
Conclusion
For more investment tips you can visit http://www.martinweiss.com/. Hopefully there can be more investment tips that we all can benefit from. You can also read 6 Tips How to Profit In a Declining Economy on http://www.hachefinancial.com/ for more information. It’s a $1.99 investment to read, but it’s an investment that is worth every penny and some.
Posted by http://www.hachefinancial.com on 04/30/08
Keys to Financial Success
Everyone wants to be successful. Some people desire to be successful in terms of becoming a millionaire or a multi-millionaire. Probably even a billionaire! And some just want to be able to pay the bills and have some left over each month. Regardless of where you want to be, nobody wants to live paycheck to paycheck. Would you agree with that? I would.
Given where our economy is heading now, the need to be financially successful is more important now. The number of foreclosed homes and families losing their homes is at a ridiculous rate right now. And the way it’s looking, it may even get worse. I am sure that we all heard about the recession talk, and with money being pumped into the economy to bail out the banks is only decreasing our purchasing power and causing prices to increase. This hurts the lower to middle income families. I almost forgot to mention about high gas prices (Hopefully you read my other article “Improving Your Gas Mileage”).
The first solution most of you will say, if not all of you, is to make more money. Not a bad solution but sometimes making more money allows the temptation of spending more money. And most of us are not disciplined in the matter of money. Robert Kiyosaki, author of “Rich Dad, Poor Dad” said that most of us are book literate, but not financial literate. While making more money is a really good solution to becoming financially successful, managing what your make goes hand in hand. There is a quote that I heard, “It’s not how much you make, but how much you keep.” I am assuming you want me to get to the point. Let’s do that.
Always Spend Less Than You Earn
Plan a budget and stick to it. Easier said than done right? Keep in mind some of the wealthiest people out there are the most disciplined with their money. Planning a budget can include putting together a shopping list and sticking to it. Eat in instead of eating out. Paying off your credit card debt, which most of us will agree is our financial setback. I posted a video on my website titled “How to Be Financially Successful” that does talk about tips on paying off your credit card faster. You can watch this video at http://www.hachefinancial.com/videos.php?cat_id=2. For some additional tips on saving, visit http://www.feedthepig.org/, this site has calculators and additional articles that provide some helpful information on saving.
Avoid Splurging
We all have that temptation of buying on impulse (myself included), and most of time when we buy on impulse, later on we regret our purchase. But we still repeat that behavior. One principle that I adopted that eliminates my impulsive buying is this. When I see a product, or service that is over $150 (your dollar budget will be determined by you) that I want to buy that very day. I will wait 90 days before I decide to do anything. And if I still want the product just as badly as day 1. I will purchase it, and I will purchase it with cash. If I don’t feel the need to buy it like I did one day 1. Then I won’t buy. This principle helped eliminate my desire to purchase things on impulse and will result in an increase of retained earnings. And having more retained earnings only enables you to become closer to financial success.
Invest
There is only one thing better than money. MORE MONEY! Using your money to work for you is a must to achieve financial success. When you spend less than you earn, you have money to invest. Definitely eliminating your credit card bills frees up some cash to invest. Whether you want to invest in a 401k plan, invest in a business, or in stocks to build your wealth, investing is a must. There are a ton of things you can invest in. Seeking the services of a financial planner can be a wise step to determine what investments are right for you. I also wrote an article titled “6 Tips How to Profit In a Declining Economy.” There is a $1.99 investment to read. I received an e-mail from someone saying that charging $1.99 to read the article is kind of greedy. I wouldn’t call it that, not only because I wrote the article, but this article is an investment. I list specific investments to buy when the value of our dollar decreases (which it is decreasing now) that not only hedge your money, but increases in value. I also list investments that you should stay away from in a declining market that won’t be profitable for your hard earned dollars. I also mention a number of tips on saving money with your monthly expenses. With that said, saving money on your monthly expenses, and providing investments that increase in value, when our dollar decreases is a sure way to financial success. And I am offering this for only $1.99. You might be asking, “Why don’t you increase the price if the article is so great?” Come on now. Let’s not get greedy. This article could save and make you thousands upon thousands of dollars. For $1.99 you can’t go wrong. You can read this article at http://www.hachefinancial.com/tips.php. If you feel that I should increase the increase the investment to read the article, please let me know. Just kidding.
Conclusion
Thank you for taking the time to read this. I will post additional information on what investments are good to consider and why. Investing is the key to building wealth and financial success. Some of these investments you may want to take advantage of and some you may not. Either way, the information will be provided for your use.
Posted by http://www.hachefinancial.com/ 04/30/08
Given where our economy is heading now, the need to be financially successful is more important now. The number of foreclosed homes and families losing their homes is at a ridiculous rate right now. And the way it’s looking, it may even get worse. I am sure that we all heard about the recession talk, and with money being pumped into the economy to bail out the banks is only decreasing our purchasing power and causing prices to increase. This hurts the lower to middle income families. I almost forgot to mention about high gas prices (Hopefully you read my other article “Improving Your Gas Mileage”).
The first solution most of you will say, if not all of you, is to make more money. Not a bad solution but sometimes making more money allows the temptation of spending more money. And most of us are not disciplined in the matter of money. Robert Kiyosaki, author of “Rich Dad, Poor Dad” said that most of us are book literate, but not financial literate. While making more money is a really good solution to becoming financially successful, managing what your make goes hand in hand. There is a quote that I heard, “It’s not how much you make, but how much you keep.” I am assuming you want me to get to the point. Let’s do that.
Always Spend Less Than You Earn
Plan a budget and stick to it. Easier said than done right? Keep in mind some of the wealthiest people out there are the most disciplined with their money. Planning a budget can include putting together a shopping list and sticking to it. Eat in instead of eating out. Paying off your credit card debt, which most of us will agree is our financial setback. I posted a video on my website titled “How to Be Financially Successful” that does talk about tips on paying off your credit card faster. You can watch this video at http://www.hachefinancial.com/videos.php?cat_id=2. For some additional tips on saving, visit http://www.feedthepig.org/, this site has calculators and additional articles that provide some helpful information on saving.
Avoid Splurging
We all have that temptation of buying on impulse (myself included), and most of time when we buy on impulse, later on we regret our purchase. But we still repeat that behavior. One principle that I adopted that eliminates my impulsive buying is this. When I see a product, or service that is over $150 (your dollar budget will be determined by you) that I want to buy that very day. I will wait 90 days before I decide to do anything. And if I still want the product just as badly as day 1. I will purchase it, and I will purchase it with cash. If I don’t feel the need to buy it like I did one day 1. Then I won’t buy. This principle helped eliminate my desire to purchase things on impulse and will result in an increase of retained earnings. And having more retained earnings only enables you to become closer to financial success.
Invest
There is only one thing better than money. MORE MONEY! Using your money to work for you is a must to achieve financial success. When you spend less than you earn, you have money to invest. Definitely eliminating your credit card bills frees up some cash to invest. Whether you want to invest in a 401k plan, invest in a business, or in stocks to build your wealth, investing is a must. There are a ton of things you can invest in. Seeking the services of a financial planner can be a wise step to determine what investments are right for you. I also wrote an article titled “6 Tips How to Profit In a Declining Economy.” There is a $1.99 investment to read. I received an e-mail from someone saying that charging $1.99 to read the article is kind of greedy. I wouldn’t call it that, not only because I wrote the article, but this article is an investment. I list specific investments to buy when the value of our dollar decreases (which it is decreasing now) that not only hedge your money, but increases in value. I also list investments that you should stay away from in a declining market that won’t be profitable for your hard earned dollars. I also mention a number of tips on saving money with your monthly expenses. With that said, saving money on your monthly expenses, and providing investments that increase in value, when our dollar decreases is a sure way to financial success. And I am offering this for only $1.99. You might be asking, “Why don’t you increase the price if the article is so great?” Come on now. Let’s not get greedy. This article could save and make you thousands upon thousands of dollars. For $1.99 you can’t go wrong. You can read this article at http://www.hachefinancial.com/tips.php. If you feel that I should increase the increase the investment to read the article, please let me know. Just kidding.
Conclusion
Thank you for taking the time to read this. I will post additional information on what investments are good to consider and why. Investing is the key to building wealth and financial success. Some of these investments you may want to take advantage of and some you may not. Either way, the information will be provided for your use.
Posted by http://www.hachefinancial.com/ 04/30/08
Tuesday, April 29, 2008
Managing Your Commercial Property
You just received title to your recently purchased commercial property. Now you’re going to have tenants leasing the space. Great! Now we will discuss management of your new commercial property.
The Lease
Negotiating your commercial property is obviously by far the most important aspect of your management. When a qualified tenant wants to lease your property, you want to realize he wants to rent the place as badly as you want to rent it to him. You need to be informed of what spaces are renting for and your vacancy rate. In addition be aware of the square footage you are leasing and your usable space when factoring the monthly rent. Have your attorney structure a lease agreement that will best suit you and your tenant. A website that I discovered that has a lease agreement that you can probably base off of is http://www.alllaw.com/forms/leases_and_tenancies/commercial_lease_agreement/. Or use an attorney. The amount of time your tenant stays in your property will only equal more profits to you (granted your tenant pays the rent). You may disagree with some of these tips, but you can offer some incentives that will be motivating to your tenant to rent the space longer. You can write in the lease agreement a 2% discount if the rent is paid 5 days before the due date. This obviously promotes an incentive to pay earlier and rent with you longer. You may even consider a month or 2 of free rent if the lease is long term. I am not saying to give away the store, but little incentives like that structured in your lease agreement may increase the length of stay, and your renters may b happier as a result.
Acoustics
Buildings with reduced sound levels are good qualities to have when managing a commercial property. It appeals to your renters and adds value to your property. Sound levels can be reduced if the building has been designed with adequate sound attenuation in the form of sound traps ductwork, vibration isolation on mechanical equipment, and the treatment of partitions above the ceiling line to isolate noise from one space to the adjacent space (Commercial Real Estate, Edited by Jack Corgan).
Signs
Address the sign issue as soon as possible. To your tenants, signage issues can be deal breakers or deal makers.
Cleaning
Cleaning specifications should be made clear and very definitive. The lease cleaning provision can only result in a better relationship with the tenant, allows you to provide the service, if you desire.
Power
The type of electrical system in your building is very important. It is useful to know how comparable buildings are charging for electricity. Is it a fix amount per square foot? Is it metered directly by the local utility? Or is it sub metered by you as the landlord? The most beneficial rate would be the average cost paid by the landlord, because this provides the benefit of the decreased cost of bulk purchasing.
Life Safety
More and more tenants are concerned with fire hazards in office buildings. All buildings, as a minimum, should meet the local code requirement. Exceeding these requirements proves only beneficial to you and your tenant. Developing an emergency evacuation plan doesn’t hurt you either.
Exterior Appearance
Curb appeal is the basic requirement to attracting tenants, and paying attention to the landscape, exterior finishes, parking lot, lighting, and whatever else is exterior to your commercial property are critical.
Renovations
You may want to add in the agreement about renovations your tenants may want to implement during their term. Whether you as the landlord will contribute or not contribute. Renovations can add value to your property, and you may want to add that in their lease agreement.
Restrictive Covenant
You may want to the restrictive covenant clause depending on what type of commercial building you own. This will appeal to your tenants because it prevents competitors with similar businesses opening nearby.
Property Management Companies
If you decide to go this route in managing your commercial property, you can visit http://www.allpropertymanagement.com to determine which property management company will best suit your needs.
Conclusion
There is an abundant of books out there that talks more in detail about managing commercial real estate, if you would like to get more information. Feel free to e-mail us at support@hachefinancial.com if you have any questions.
Posted by http://www.hachefinancial.com
The Lease
Negotiating your commercial property is obviously by far the most important aspect of your management. When a qualified tenant wants to lease your property, you want to realize he wants to rent the place as badly as you want to rent it to him. You need to be informed of what spaces are renting for and your vacancy rate. In addition be aware of the square footage you are leasing and your usable space when factoring the monthly rent. Have your attorney structure a lease agreement that will best suit you and your tenant. A website that I discovered that has a lease agreement that you can probably base off of is http://www.alllaw.com/forms/leases_and_tenancies/commercial_lease_agreement/. Or use an attorney. The amount of time your tenant stays in your property will only equal more profits to you (granted your tenant pays the rent). You may disagree with some of these tips, but you can offer some incentives that will be motivating to your tenant to rent the space longer. You can write in the lease agreement a 2% discount if the rent is paid 5 days before the due date. This obviously promotes an incentive to pay earlier and rent with you longer. You may even consider a month or 2 of free rent if the lease is long term. I am not saying to give away the store, but little incentives like that structured in your lease agreement may increase the length of stay, and your renters may b happier as a result.
Acoustics
Buildings with reduced sound levels are good qualities to have when managing a commercial property. It appeals to your renters and adds value to your property. Sound levels can be reduced if the building has been designed with adequate sound attenuation in the form of sound traps ductwork, vibration isolation on mechanical equipment, and the treatment of partitions above the ceiling line to isolate noise from one space to the adjacent space (Commercial Real Estate, Edited by Jack Corgan).
Signs
Address the sign issue as soon as possible. To your tenants, signage issues can be deal breakers or deal makers.
Cleaning
Cleaning specifications should be made clear and very definitive. The lease cleaning provision can only result in a better relationship with the tenant, allows you to provide the service, if you desire.
Power
The type of electrical system in your building is very important. It is useful to know how comparable buildings are charging for electricity. Is it a fix amount per square foot? Is it metered directly by the local utility? Or is it sub metered by you as the landlord? The most beneficial rate would be the average cost paid by the landlord, because this provides the benefit of the decreased cost of bulk purchasing.
Life Safety
More and more tenants are concerned with fire hazards in office buildings. All buildings, as a minimum, should meet the local code requirement. Exceeding these requirements proves only beneficial to you and your tenant. Developing an emergency evacuation plan doesn’t hurt you either.
Exterior Appearance
Curb appeal is the basic requirement to attracting tenants, and paying attention to the landscape, exterior finishes, parking lot, lighting, and whatever else is exterior to your commercial property are critical.
Renovations
You may want to add in the agreement about renovations your tenants may want to implement during their term. Whether you as the landlord will contribute or not contribute. Renovations can add value to your property, and you may want to add that in their lease agreement.
Restrictive Covenant
You may want to the restrictive covenant clause depending on what type of commercial building you own. This will appeal to your tenants because it prevents competitors with similar businesses opening nearby.
Property Management Companies
If you decide to go this route in managing your commercial property, you can visit http://www.allpropertymanagement.com to determine which property management company will best suit your needs.
Conclusion
There is an abundant of books out there that talks more in detail about managing commercial real estate, if you would like to get more information. Feel free to e-mail us at support@hachefinancial.com if you have any questions.
Posted by http://www.hachefinancial.com
Financing Commercial Real Estate
Once you determine the town/ are you want to buy commercial real estate in, and then your next step is to find a commercial building you feel that is ideal. After you’ve done that and you want to make an offer on that commercial property, and the seller accepts. Get excited, your day went just the way you wanted it to go, and you have already been pre-qualified for the commercial property you want to purchase. Rewind, back up, this is a perfectly realistic example, but before you begin your search for commercial real estate, it serves to your advantage to have an idea of some of the requirements when purchasing real estate.
Commercial Real Estate is Not Residential Real Estate
What this means is your credit score is not the main picture here. In purchasing residential real estate you want your credit to be as high as it can be, because your credit determines your interest rate, your monthly mortgage payment, and the amount of money you put down. In commercial real estate, lenders are not worried about your credit. They are more worried about your financial credentials in the respect of how much money you can put down. This leads to our next tip.
Banks Will Usually not Finance More Than %75 of the Appraised Value of the Property
Regardless of credit score, that is the general rule that lenders follow. Does this mean you have to come in with the %25? Not necessarily. A portion of it can come from you and the other portion can be done through seller financing (visit http://www.hachefinancial.com/articles.php?a_id=11 for more information on seller financing). For instance, let’s say the bank approved you %75 of the appraised value, and you can put down %15. The bank will not have a problem if the seller is willing finance the %10. If the seller is willing to finance the entire %25, then you may have a deal. But I must point out that deals like that are rare.
The Commercial Property Must Show Sufficient Debt-Repayment Ability
What lenders like to see is the ability that %75 of your gross income from your commercial property can pay the mortgage of your loan (Principle, Interest, Taxes, and Insurance). This information is determined by appraisers or you can ask the seller of the commercial property you wish to purchase.
Conclusion
I can go into lending guidelines and finance programs for commercial real estate, but that will be too lengthy and boring. For more information on commercial real estate you can e-mail us at support@hachefinancial.com or you can visit http://www.loanuniverse.com/realestate.html for some articles regarding commercial real estate. Realtors are definitely a good source of information regarding commercial real estate. We look forward to any questions and comments you may have. Thank you
posted by http://www.hachefinancial.com
Commercial Real Estate is Not Residential Real Estate
What this means is your credit score is not the main picture here. In purchasing residential real estate you want your credit to be as high as it can be, because your credit determines your interest rate, your monthly mortgage payment, and the amount of money you put down. In commercial real estate, lenders are not worried about your credit. They are more worried about your financial credentials in the respect of how much money you can put down. This leads to our next tip.
Banks Will Usually not Finance More Than %75 of the Appraised Value of the Property
Regardless of credit score, that is the general rule that lenders follow. Does this mean you have to come in with the %25? Not necessarily. A portion of it can come from you and the other portion can be done through seller financing (visit http://www.hachefinancial.com/articles.php?a_id=11 for more information on seller financing). For instance, let’s say the bank approved you %75 of the appraised value, and you can put down %15. The bank will not have a problem if the seller is willing finance the %10. If the seller is willing to finance the entire %25, then you may have a deal. But I must point out that deals like that are rare.
The Commercial Property Must Show Sufficient Debt-Repayment Ability
What lenders like to see is the ability that %75 of your gross income from your commercial property can pay the mortgage of your loan (Principle, Interest, Taxes, and Insurance). This information is determined by appraisers or you can ask the seller of the commercial property you wish to purchase.
Conclusion
I can go into lending guidelines and finance programs for commercial real estate, but that will be too lengthy and boring. For more information on commercial real estate you can e-mail us at support@hachefinancial.com or you can visit http://www.loanuniverse.com/realestate.html for some articles regarding commercial real estate. Realtors are definitely a good source of information regarding commercial real estate. We look forward to any questions and comments you may have. Thank you
posted by http://www.hachefinancial.com
Searching For Commercial Real Estate
So you want to invest in commercial real estate? Not a bad choice if I may add. Whether it is you want to develop commercial real estate or buy commercial real estate. This article will provide some helpful tips to aid you with your search.
Metropolitan Area
Some developers or investors in commercial real estate typically work in their hometown or pretty close to it for reasons of familiarity. In some cases, individuals are even searching out of their hometowns for opportunities in commercial real estate. Some things to look for in developing or investing in commercial real estate are
1. Cities whose need for commercial real estate or housing has not been satisfied. Cities with availability of land are typically great cities to choose. Sometimes these cities have a much higher percentage of residential homes than commercial properties and can show great potential in purchasing commercial real estate or developing. Going about this may involve you driving around the town to get a better idea of the town’s surroundings. Sometimes even asking locals can prove to be helpful. But most of you will probably choose going to the city and obtaining public information about plans and future construction(s) to see what the city has planned for the future.
2. Target metro areas with good mid- to long term growth potential. Some examples are:
· Checking the demographics to see the cities diversified employment base for high growth potential
· Strong economic growth locally in the past five years or even a year if you choose
· No signs of overbuilding
Going to the city, talking to a Title Representative to get the demographics, and checking the census will be good ways of finding out information on the town you would like to invest in. Whether it be developing or purchasing in commercial real estate.
The Next Step
After you complete steps 1 & 2 to determine which town you want to develop or purchase in. The next step would be to decide what type of commercial property will give you the best return on your hard earned dollars. In my previous article, “Investing in Commercial Real Estate” I used an example of my friend who invested in a 30 unit apartment complex in Tennessee. The reason why he decided to purchase a 30 unit apartment complex was because he took the time to visit the city and discovered that a few shopping centers were going to be built in a 5 mile radius, and one of the locals in town told him about a military base that will soon be in town. In addition, he checked with a title rep to learn about the demographics and discovered that the median income is about $58,000 a year. With the impending construction of shopping centers and no immediate plans on building homes he felt that purchasing the 30 unit apartment complex will give him the best return on his money.
You may also want to consider this scenario. If there are numerous amounts of homes and not enough commercial properties to accommodate the city, then perhaps purchasing a commercial property or developing one may be your best option. What to develop or buy will be entirely up to you. You may decide to build, or buy office space, shopping centers, or warehouse(s). But check with the city, talk to locals, get in contact with a title rep and drive around town to see what potential is there, because you don’t want to invest in a restaurant if the town is saturated with restaurants, you probably don’t want to develop or buy an apartment complex if the towns median income is above $100,000. Do your homework, weigh your options and then you can best decide on what you want to do from there.
Conclusion
If you are deciding to develop or purchase commercial real estate, now is the time to do it whether it be a good economy or a declining economy. There is always a need for businesses. I hope you view this article as helpful. I know there is an abundance of information regarding commercial real estate. They’re some great books that talk about investing in commercial real estate. All comments are welcomed. Thank you for your time.
Posted by http://www.hachefinancial.com/
Metropolitan Area
Some developers or investors in commercial real estate typically work in their hometown or pretty close to it for reasons of familiarity. In some cases, individuals are even searching out of their hometowns for opportunities in commercial real estate. Some things to look for in developing or investing in commercial real estate are
1. Cities whose need for commercial real estate or housing has not been satisfied. Cities with availability of land are typically great cities to choose. Sometimes these cities have a much higher percentage of residential homes than commercial properties and can show great potential in purchasing commercial real estate or developing. Going about this may involve you driving around the town to get a better idea of the town’s surroundings. Sometimes even asking locals can prove to be helpful. But most of you will probably choose going to the city and obtaining public information about plans and future construction(s) to see what the city has planned for the future.
2. Target metro areas with good mid- to long term growth potential. Some examples are:
· Checking the demographics to see the cities diversified employment base for high growth potential
· Strong economic growth locally in the past five years or even a year if you choose
· No signs of overbuilding
Going to the city, talking to a Title Representative to get the demographics, and checking the census will be good ways of finding out information on the town you would like to invest in. Whether it be developing or purchasing in commercial real estate.
The Next Step
After you complete steps 1 & 2 to determine which town you want to develop or purchase in. The next step would be to decide what type of commercial property will give you the best return on your hard earned dollars. In my previous article, “Investing in Commercial Real Estate” I used an example of my friend who invested in a 30 unit apartment complex in Tennessee. The reason why he decided to purchase a 30 unit apartment complex was because he took the time to visit the city and discovered that a few shopping centers were going to be built in a 5 mile radius, and one of the locals in town told him about a military base that will soon be in town. In addition, he checked with a title rep to learn about the demographics and discovered that the median income is about $58,000 a year. With the impending construction of shopping centers and no immediate plans on building homes he felt that purchasing the 30 unit apartment complex will give him the best return on his money.
You may also want to consider this scenario. If there are numerous amounts of homes and not enough commercial properties to accommodate the city, then perhaps purchasing a commercial property or developing one may be your best option. What to develop or buy will be entirely up to you. You may decide to build, or buy office space, shopping centers, or warehouse(s). But check with the city, talk to locals, get in contact with a title rep and drive around town to see what potential is there, because you don’t want to invest in a restaurant if the town is saturated with restaurants, you probably don’t want to develop or buy an apartment complex if the towns median income is above $100,000. Do your homework, weigh your options and then you can best decide on what you want to do from there.
Conclusion
If you are deciding to develop or purchase commercial real estate, now is the time to do it whether it be a good economy or a declining economy. There is always a need for businesses. I hope you view this article as helpful. I know there is an abundance of information regarding commercial real estate. They’re some great books that talk about investing in commercial real estate. All comments are welcomed. Thank you for your time.
Posted by http://www.hachefinancial.com/
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