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How to Buy an Investment Property – Yahoo Finance

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how to buy an investment property
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For conservative investors, the stock market holds huge risk. If that’s you, maybe you stick to high-yield savings accounts or low-cost index funds or ETFs. However, investors willing to take a bigger risk may invest in properties. Here’s how to buy investment property and potentially increase passive income.” data-reactid=”31″>For conservative investors, the stock market holds huge risk. If that’s you, maybe you stick to high-yield savings accounts or low-cost index funds or ETFs. However, investors willing to take a bigger risk may invest in properties. Here’s how to buy investment property and potentially increase passive income.

 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How to Buy Investment Property: Types

” data-reactid=”33″>How to Buy Investment Property: Types

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There are many different types of investment properties. You could invest in commercial real estate, rental properties and real estate investment trusts. Consider uses including:” data-reactid=”34″>There are many different types of investment properties. You could invest in commercial real estate, rental properties and real estate investment trusts. Consider uses including:

  • Buying and renting: You could buy a single-family home as a second home and rent it out. You could also buy a multi-unit property and rent out individual units. In either case, you’re responsible for maintenance, repairs, collecting deposits, and handling background checks for tenants. If you buy the property in a desirable location, you could earn enough in rent payments to cover your mortgage and more. But you could also spend more time than you realize managing your new property.
  • House-flipping: This involves buying a home, often distressed and cheap, fixing it up and selling it for a profit. Many real estate investors are house-flippers. But if you pay too much, your renovations take too long to complete, or you incur an unexpected expense, you could end up losing money.
  • Real estate investment trusts (REITs): If you can’t scoop up individual properties, you might want to consider REITs. These companies own many properties that bring in an income. As a result, they let people invest in many different properties. Different REITs focus on different sectors, like apartments, healthcare facilities, and business complexes. Investors without a lot of experience or capital can still put money into REITs.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How to Buy Investment Property: Funding” data-reactid=”39″>How to Buy Investment Property: Funding

how to buy an investment property

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Most investment properties require hefty capital. When buying a home to live in for the foreseeable future, you can find loans requiring a 3.5% down payment or less. When you buy an investment property, traditional financing and conventional loans require a 20% down payment.” data-reactid=”60″>Most investment properties require hefty capital. When buying a home to live in for the foreseeable future, you can find loans requiring a 3.5% down payment or less. When you buy an investment property, traditional financing and conventional loans require a 20% down payment.

You’ll also want to budget for the right project. For instance, if you’re planning to flip a house, estimate how long it’ll take to complete renovations and repairs. Also, figure out how much it’ll cost. Consider covering a few extra months of expenses beyond your original timeline. Over-estimating your time and money in case unexpected expenses can be wise. If a repair takes longer than you thought or if a pipe breaks during renovations, it wont sink your budget.

If you’re planning to buy your space for rentals, make sure you have enough money to finance unexpected repairs involving tenants. For instance, if a washing machine breaks or there’s a leak, a contingency fund can help fix it.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="How to Buy Investment Property: Credit” data-reactid=”63″>How to Buy Investment Property: Credit

If you want to build up your buying power, a solid credit score can get you there. A very good or excellent FICO score typically starts around 740.

If you don’t have stellar credit, you can still take out a loan for investment property. However, it could mean higher interest rates or different loan terms than you’d like. Cleaning up your credit may secure better loan terms. Consider making all minimum payments on time every month. Try to lower your credit use to 30% or less, though under 10% is ideal.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If possible, pay off any outstanding debt that inflates your debt-to-income ratio. The lower your DTI, the better you’ll look to lenders.” data-reactid=”66″>If possible, pay off any outstanding debt that inflates your debt-to-income ratio. The lower your DTI, the better you’ll look to lenders.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Consider Potential Loss” data-reactid=”67″>Consider Potential Loss

The reward for investing in properties could be lucrative. Some investors that start real estate investing as a side-hustle make it a full-time job. In 2017, the average return on house-flipping was nearly 50%. Compared to high-yield savings accounts bringing in less than 2% APY, that’s a big difference in return on investment.

However,  you may lose money. money. You might buy a home for more than you originally planned. Also, you. may put more money into renovations that take took longer to complete. Or your property could sit on the market for six months to a year. Each of those scenarios loses money. The longer your home stays up for sale, the more you’re paying in monthly mortgage payments, insurance and other related costs. Even with big reward comes potential loss. It’s important to keep that in mind, and in your budget, as you consider investment properties.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investment Property Tips

” data-reactid=”70″>Investment Property Tips

how to buy an investment property
  • Before considering how to buy investment property, make sure your finances are lined up. Your credit score should be high, DTI should be low and funding should be secure before you even start browsing properties. You might need to enlist the help of a financial specialist to make sure you’re on the right track. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • If you’re figuring out how to buy investment property to rent out, you’re also taking on a new gig as a landlord. You might feel good about collecting rent checks every month, but be prepared to handle the unexpected. If you’re not managing the property yourself, you’ll have to hire someone to do it for you. If you are managing it yourself, you might need to devote more time and resources than you originally planned. With renovations, building codes, inspections and ongoing maintenance, being a landlord could be your new full-time job. Before you buy your new property, make sure you’re ready for it.

Photo credit: ©iStock.com/Natee Meepian, ©iStock.com/Natee Meepian, ©iStock.com/Pattanaphong Khuankaew

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The post How to Buy an Investment Property appeared first on SmartAsset Blog.” data-reactid=”95″>The post How to Buy an Investment Property appeared first on SmartAsset Blog.

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Ouch. Investment banking revenue hasn't been this weak since 2008 – CNN

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HSBC announced plans last week to slash about 35,000 jobs to combat crumbling profits. Deutsche Bank (DB) cut 18,000 jobs last summer as Germany’s biggest bank tries to rebuild itself. And Morgan Stanley (MS) trimmed its workforce by 1,500 late last year.
Even big bank bosses are on the chopping block. The CEOs of Credit Suisse, UBS (UBS) and HSBC (HBCYF) have all stepped down for various reasons within the past six months. And Barclays CEO Jes Staley is being investigated by regulators over his ties to disgraced financier Jeffrey Epstein.
Meanwhile, Morgan Stanley is spending $13 billion to acquire online broker E-Trade (ETFC) in a bid to make its business model less volatile.
The turmoil reflects the severe financial pressure on investment banks broadly as they cope with muted volatility, IPO busts and technological disruptions to the way markets work.
Revenue at the top 12 global investment banks fell 3% in 2019 to the weakest level since the chaos of the 2008 financial crisis, according to Coalition, a business intelligence provider. Revenue is down for the fourth year out of the past five.
“Investment banks are being forced to rethink their entire business,” said Ian Winer, a Wall Street veteran who currently serves as an advisory board member at hedge fund Bellator Asset Management. “There just aren’t many ways for them to make money in the traditional way.”
That’s why they are doing some serious belt-tightening. Headcount at leading investment banks dropped by 6% last year, the fifth-straight year of declines, according to Coalition.
“The quickest way to cut costs are personnel. It’s like shoot first and ask questions later,” said Winer.
US government fines Wells Fargo $3 billion for its 'staggering' fake-accounts scandal
Last year was supposed to be a blockbuster one for the IPO market, one of the industry’s bread-and-butter moneymakers. However, that didn’t pan out. IPO activity slowed down after the disappointing first-half debuts of Uber (UBER) and Lyft (LYFT) and then the implosion of WeWork and its mega IPO.
Companies raised about $194 billion through IPOs around the world in 2019, according to Dealogic. That’s not too shabby, but still down nearly 8% from the year before. And it’s well below the recent peak of $264 billion in 2014.
“The IPO market collapsed after WeWork,” said Gerard Cassidy, a banking analyst at RBC Capital.
Some companies like Slack (WORK), Spotify (SPOT) and iHeartMedia (IHRT) have decided to go public through direct listings, bypassing the expensive fees they would owe investment banks altogether. Others like Richard Branson’s Virgin Galactic (SPCE) went public through a merger with a special purpose acquisition corporation.

Muted volatility — until now at least

Another problem for investment banks is that up until very recently, financial markets have behaved very calmly. Extremely low interest rates from central banks around the world has suppressed market volatility. That, in turn, limits the fees that big banks haul in when large hedge fund clients trade with a frenzy. And it lowers demand for the complex equity-trading instruments that sophisticated clients buy from investment banks during times of market turmoil.
Even Monday’s 1,000-point plunge on the Dow only lifted the VIX (VIX) volatility index to 24. That’s still relatively calm by market freakout standards.
“People just aren’t trading as much. It’s harder for banks to make money,” said Winer.
Of course, some investment banks are doing just fine, particularly outside of the largest firms. For instance, Stifel (SF), which caters to middle market firms, reported a 16% jump in investment banking revenue last year.
Bigger picture, finance is clearly under pressure from structural changes to the industry that is hurting market revenue at investment banks.
Although fixed income revenue rose last year at leading investment banks, the firms suffered a 10% decline in equities revenue, according to the Coalition report. And headcount in the equities business also fell by 10%.

The rise of the robots

RBC’s Cassidy partially blames the “electronification” of the business. As robots replace humans in trading, large institutional investors are demanding lower fees for executing trades.
“The days of thousands of traders on the New York Stock Exchange are gone. It’s all been replaced by robots,” said Cassidy.
Robots are also replacing stock pickers. Investors have ditched expensive active managers in favor of dirt-cheap ETFs and other passive investment vehicles. That long-running trend is forcing active investment firms to find ways to cut costs, including by demanding cheaper transaction costs from the major investment banks executing their trades.
The ETF boom is also spurring consolidation. Last week, Franklin Templeton parent Franklin Resources reached a $4.5 billion deal to acquire rival Legg Mason (INFR).
Morgan Stanley is buying E-Trade for $13 billionMorgan Stanley is buying E-Trade for $13 billion
At the same time, the online brokerage industry has been turned on its head by the rise of Robinhood and free trading. Discount brokers slashed their trading fees to zero and Charles Schwab (SCHW) and TD Ameritrade (AMTD) are joining forces. This free trading phenomenon is putting additional pressure on investment banks to cut their transaction costs.
“I don’t know how you compete against that,” said Winer.
All of these headaches help explain Goldman Sachs’s decision to build a consumer banking giant called Marcus and Morgan Stanley’s takeover of E-Trade. After the E-Trade deal is finalized, Morgan Stanley will generate 57% of its pre-tax profits from wealth and investment management. That’s up from just 26% a decade ago.
Wall Street firms are diversifying away from the volatile markets business in favor of more stable Main Street ones.
“The whole game has changed,” said Winer.

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Europe's top firms must double low-carbon investment – study – Financial Post

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LONDON — Europe’s top companies need to more than double their current level of spending on low-carbon projects to meet the European Commission’s flagship goal of ‘climate neutrality’ by 2050, according to a report released on Tuesday.

The major study of 882 publicly-traded companies across multiple sectors by climate research provider CDP and consultancy Oliver Wyman showed they spent 124 billion euros ($134.1 billion) on capital investment and research and development in 2019.

That amounted to around 12% of total investment. To be on track to meet the goal of net-zero emissions by 2050 however, that figure needs to jump to 25%, said CDP Europe’s Managing Director Steven Tebbe.

The biggest areas for new investment were electric vehicle technologies, with spend of some 43 billion euros, renewable energy, at 16 billion euros, and energy grid infrastructure, at 15 billion euros, the report said.

“Some European companies are making bold new low-carbon investments to roll out renewables, build greener infrastructure, buy electric vehicles and make manufacturing more energy-efficient,” Tebbe said.

“But there is a huge opportunity to do more, and we need to see more action across the board.”

While doubling capex spend was “a big ask,” Tebbe said the costs of inaction were higher still. The companies assessed account for around three-quarters of the EU’s total emissions and the same amount of its stock market capitalisation.

“To help fill this investment gap, there’s a serious need for policymakers and investors to help companies finance the breakthrough technologies of the future,” he added.

CDP, which works with companies and investors to help them manage their climate risk, is largely backed by funding from philanthropic and government grants.

European policymakers are aiming to reduce emissions targets to 50%-55% below 1990 levels by 2030 and to achieve climate neutrality by 2050 as part of a 1 trillion euro ($1.1 trillion) European Green Deal.

In a bid to achieve its goal, the EU last week opened a public consultation on how companies report the social and environmental impact of their activities, amid concern the current rules on corporate sustainability disclosures are not tough enough.

($1 = 0.9246 euros) (Reporting by Simon Jessop; Editing by Jan Harvey)

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Money Hunter: A Smart Investment – Montreal Alouettes

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He was born Monshadrik Hunter, but in the football world, everyone calls him Money. And he may be one of the smartest investments our Alouettes have made since the free-agent market opened earlier this month. On February 12, Money officially joined the Montreal crew after spending two years with the Edmonton Eskimos. The defensive back recorded 59 tackles, two interceptions and one sack in 2019 – his first season as a starter in the CFL – and, being only 24-years old, he surely still has much more to bring to the table.

Following Into a Hall of Famer’s Footsteps

As he hit Free Agency, Money knew one thing: he’d be good wherever Barron Miles was. As a matter of fact, Barron played an important role in persuading Money to come to Montreal, just like he largely contributed to his protege’s evolution as a pro.

Last year, I started watching more film and working on game plans. Having Barron there really helped me understand the game better and dissect it,” says the DB. “He taught me how to study the game and I knew I’d be comfortable playing for him again.

Adding Some Bite to the Defence

According to GM Danny Maciocia, our recruit has what it takes to be a serious candidate at the strongside linebacker position. So far in his professional career, Money has seen playing time at safety and halfback. Fulfilling the role of SAM would take him back to his high school years, but he’s ready and willing to do whatever it takes to help his team. Plus, everyone agrees: Money’s versatility is one of his best assets. He has the ability to stop the run game, to get to the quarterback if needed or to drop back into coverage.

He can perform at multiple positions,” Barron Miles explains. “He’s going to add a little bite to the secondary. He’s long, fast and rangy. Now that he’s in his third season, the game will be slower for him and he can only get better.

It takes a special kind of relentlessness to be able to hit literally everybody on the field. Think of Patrick Levels in 2019. Those who appreciated his fire will certainly learn to love Money’s bite. Standing at 6’1, he has the potential to become a serious threat if he continues to focus on his technique.

I love playing this game more than anything. So much so, that I’ve been working on controlling my passion,” he admits. “Some people will say I can be a hothead. I know I don’t play calm, but I just have to constantly put that energy into my technique.

While he may be known for his intensity on the field, Money spends most of his off-time relaxing at home with his four (soon to be five) year-old daughter, Miya. As a matter of fact, the little cutie, who was born on April Fool’s Day, will be moving with him to Montreal this summer. Her presence, he says, helps him stay levelled. Something he will want to be coming into the 2020 season.

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