An alternative to petroleum diesel, palm oil is abundantly available and cheap.

                                            It can be manufactured domestically and is bio-degradable, capable of being

                                            broken down into many useful fractions. Its emissions are non-potent.

                                            Funds & Venture Capital Investing:

                                            EnergyHedgeFundCenter, Green Century Funds (environmentally responsible

                                            mutual funds); New Energy Fund LP (globally sustainable energy equity hedge

                                             fund); New Alternative Funds (socially responsible mutual fund); Winslow

                                            Green Growth Fund ( environmentally responsible investing; aggressive growth

                                            equity, above average performance with long-term capital appreciation)

                                            Disclaimer:

                                           The above serve as a rough guide to mineral oil alternative energy sources with

                                           many still in their development stages. However, all are worthy of more detailed

                                            investigation as profitable investing strategies. It is advised that you seek qualified,

                                            professional, licensed, legal advise prior to investing.

                                       Author signature: Intrinsic Lifestyles:Investing education for wealth creation. Expert
                                                                   proven investing strategies for generating cashflow and to make money.
                                                                   Free dvds etc. Visit www.intrinsiclifestyles.com

                                       You may re-print this article provided that you include the disclaimer and author
                                        signature as above  
                                           

Weathering the Storm…….Strategies for a slowing propertyinvesting market.

 With a current deceleration in the residential property boom, many home owners / investors could be lulled into a sense of impending doom, and hasty decisions on selling their properties. However, history has demonstrated that such real estate declines are cyclic, property value following a 7-12year cycle (dependent upon location). Rental income typically follows a 7yr cycle.

Behind the falling real estate values are such economic factors as declines in foreign reserves and commodity prices. (Incidentally, there tends to be an inverse relationship between the property and stock market.i.e. as real estate value increases, interest rates tend to increase and share price reduction tends to follow, hence reinforcing the advantage of property and stock market portfolios running in symbiosis).

So, rather than attempt to cash in on the last shred of profit in the real estate market with a quick, un-timely sale, we should be focusing our efforts on ‘riding out the storm’, rather hold and value add/ maximise cash flow. Following the slump in property profits are interest rate reductions, which then lead to rising shares prices and then higher overseas reserves, and rising real estate values.

Simple Value Adding Strategies:

We can add value to our existing properties by relatively simple measures e.g. refresh the interior paintwork, change door handles, and modernise the lighting (choose energy efficient designs), switches and electric outlets. This can be a good rent puller as it results is cheaper utility bills for tenants). It is worth considering replacing appliances with 5 star energy ratings for this purpose.

Window dressings can be renewed with more durable blinds, which also impart a classier look to the property. Added security of window locks not only increases a property’s value but makes for cheaper insurance.

Kitchens and bathrooms are the renovation kings for value adding / rent pulling. However, complete renovations can be expensive, are often un-warranted.

When ‘value-adding’, care must be taken in distinguishing between capital improvements and wear and tear / maintenance necessity (important tax deduction issues if an investment property). Simple assignments could include merely replacing the taps and sink plugs, modernising the light fittings, switches and sockets (as discussed above), and replacing the cupboard doors and handles rather than a complete cabinetry update. Bench-tops could be replaced if suffering heavy wear and tear. Tiles may be refreshed simply by cleaning and re-grouting. The biggest expense would be purchasing modern, new appliances, but most may be purchased on 12month interest free credit, thereby delaying the need for increased finance. Once the property has been re-valued, the extra equity can then be used to pay off the outstanding account.

Bathrooms follow similar principles to kitchens; a total refit can be avoided simply by renewing the hose, rose and shower curtain/screen, replacing towel rails with modern featured designs. An exhaust fan is an essential investment in bathrooms. Toilets can under-go make-overs by replacing the seat & lid, plus the cistern (dual flush for water conservation), and by replacing toilet roll holders with trendier ones.

Of equal importance for increased value is the street appeal of the property. Yard maintenance is an absolute! Whilst water features can impart a trendy look, they can also be subject to considerable maintenance issues. I would advise that such be kept as small features. The façade can be refreshed by painting eaves and roof of an old property. Rendering does increase the overall appeal, but can be pricey. Similar issues also apply for adding an extension to your property. Although, if an investment property, this may still be worthy of consideration if this opens up your rental attraction & return. Again, even if your principal place of residence, it may prove far more economical to add to existing rooms rather than endure the legal & real estate costs associated with buying and selling your property at a bottle-neck in the residential market.

Such improvements may be financed through Renovation Loans, redraw on existing loan facilities (Line of  Credit Accounts), or through other means such as credit cards, savings or joint ventures. Once the property has been re-valued, the loan can then be increased to pay off the cost of the project; a cheaper alternative to buy/ sell in a falling market. Many fittings and fixtures are deemed by the tax office as depreciable, hence a depreciation schedule is a must for investment properties. In fact investment properties can be let out furnished for increased rental income and appeal ,and serve as a larger depreciation schedule for tax purposes. These can be financed as above or through interest-free credit deals (or both!).

We advise that prior to any renovation project, you do your own due diligence and research. Further, you can often ascertain who the valuer is for the particular financial institution, and seek his advice prior to embarking on complex projects. However, you should always have a portfolio of your own research and comparative analysis of recent sales of similar property in the area to hand as evidence and justification for the valuer upon his appraisal. 

The above serve as guide-lines only. It is essential that council/shire approval is sought for any major renovation. Accountant advice must also be sought prior to value-adding, as certain improvements are not considered tax-deductible. However, with the increase in valuation (done by a professional valuer), there follows an increase in equity which can be used (not subject to capital gains tax as a sales profit would be), and the interest rates on the loan may be subject to a tax deduction.

Disclaimer: We advise that you seek qualified, licenced, legal advice prior to investing.

Author signature: Intrinsic Lifestyles: Investing education for wealth creation. Proven expert strategies for generating cashflow and to make money. Free dvds etc. Visit www.intrinsiclifestyles.com


You may re-print any of the content in this article provided that you include the disclaimer and author signature