Investment Support

New Or Used Construction Equipment – The Return On Investment Decision

It has always been a debate whether to buy new or used construction equipment. Smaller fleets prefer to buy used construction equipment as they attract less capital investments. Another reason for people to opt for used construction equipment is that they are sometimes as good as new and come at a very heavy discounted price as compared to that offered at the showrooms.

Moreover, Associated Equipment Distributors (AED) and TradeYard, Inc, have jointly announced an alliance that shall provide certified inspection of used construction equipment that can also be sold online. This has been done to boost the business-to-business sales via online medium. It gives better promotion to the sale of used construction equipment and buyers to be confident about their purchase. Usually buyers buy the used construction equipment only upon the preliminary inspection done by the technical agent from either the buyer or the seller side. Since a neutral and unbiased inspection report shall be available it would lead to increased sales and more profitable bargains to small investors. Small fleet owners usually opt for used construction equipment sold from earlier projects. Large construction companies that carry huge fleet of construction equipment can also strike a good bargain at onsite purchase of such certified used construction equipment.

There had always been a skeptical attitude towards the economies in the Indian sub-continent, Russia or Latin America. But over the past years these economies have shown a constant and steady growth. The demand to construct new projects or to renew the old ones has been always in demand. Since these countries are not as cash rich and affluent, they usually have constructors who have smaller fleet. Moreover, they also do not have enough capital to be invested in developing a large fleet. They are always on a look out for used construction equipments. Along with this these constructors take on projects in the neighboring countries and shifting heavy and used construction equipment is also not feasible. Thus sales of such equipments is constantly in demand

Apart from the projects in these countries, bigger companies take up their projects in the continent of Africa and also the Gulf countries. Thus they opt to buy used construction equipments available locally from the companies or constructors who wish dispose off their fleet. The used construction equipments are also on the sale due to the feasibility reasons that lie on the sellers side as well. The construction companies who have finished off their projects in foreign lands and take up projects in other countries, for such large companies it is more feasible to dispose off their used construction equipment and assemble a new fleet at the onsite location rather than carry them to the new land. This is due to the reason that various countries have different rules for export and import of heavy equipment required for infrastructure development.

Some countries impose heavy taxes and import duties to restrict import of used construction equipment. This is done to prevent the domestic markets and small construction companies with limited resources. Further, export of such used construction equipment requires various documentation procedure, inspections and other legal formalities. All such activities are not only tedious but also time consuming. These formalities also require lot of duty fulfillment at both the ends. Moreover clearance at the ports and damage caused in handling and shifiting these equipments is also very tedious job.

Thus construction companies prefer to buy new or used construction equipment locally. Only Large construction companies or companies who have strategic partnerships in the local market for a company prefer to import a part of their used construction equipment for their ongoing projects.

Condo Hotels in the Philippines: The Hottest Niche in the Philippine Investment Property market

Beth Collingz, PLC International Marketing Director for Pacific Concord Properties Incs Lancaster Brand of Condotels in the Philippines said When the unit owners are not using the condo hotel suite, the unit is put in the managed pool and rented out for them. The buyers have what is considered “hassle free” ownership. The condo hotel unit owners also benefit from having a professional onsite management company to handle to marketing, booking of their room and general expertise that they bring to the table. If a problem should arise with their condo hotel unit, the management company will take care of it instead of the owner having to worry about it. This makes the traditional landlord tenant issues a thing of the past.

The condo hotel buyer sees the benefit to owning a vacation property that also has the potential to produce income for them. The typical condo hotel produces higher levels of income than the traditional vacation home (and less headaches), making it all the more appealing to buyers said Collingz

Developments such as the Lancaster Suites Manila Tower I was sold out in less than 18 months and the building is set for completion Summer 2007. Condo hotels are different from traditional condos because they are sold “turn key”. Clients initially purchase the standard condo unit and then when the time comes for interior fit-out they can avail of the in house Condotel package of furnitures and furnishings for the unit. This means buyers do not have to worry about hiring a designer or contractor to come in to finish out the unit. Everything is included from linens, dishes, pillows etc

Leading the way in the Metro Manila condo hotel market is Pacific Concord Properties Lancaster Brand of condotel investments. Pricing for condo hotels can range anywhere from $43,000s up to $350,000 for Penthouse suites. Of course the pricing depends on location, views and types of finishes.

The Lancaster Suites Manila Tower I development has enjoyed great success for its clientele with property appreciation already reaching 100% for its initial buyers.
Lancaster The Atrium, the latest development by PCPI in Shaw Boulevard, Metro Manila, is currently on preconstruction selling and looks set to sell out within the next few months. Lancaster The Atrium offers clients the choice of Studio, One, Two and Three Bedroom suites that all have kitchen facilities as regular residential condo unit. In addition, Lancaster The Atrium, as with the Lancaster Suites Tower I, offers unit owners and guests an extensive range of services and amenities said Collingz

Times seem to be changing in “Land Investments Uk” after the Kent Land Scams, Sussex Land Scams and London Land Scams, owe to the initiatives taken by the people of Sussex Farmland, that now companies have started refunding to the dissatisfied customers, which means, that if you are unhappy with your investment in Land you will be refunded your investment amount. There was a time when people of Sussex Farmland were afraid of scamsters and they were making money while being in the broiler rooms. As the idea of an investment thrills the investors’ mind with lots of returns, scamster were chasing the concept to flourish their business.

Companies now offer Land at competitive prices and are ready to refund the full amount in case the customer is dissatisfied and doesn’t find it a good investment avenue.

Furthermore, as awareness is increasing with the “Land Investments UK” people are getting an idea what to buy and where to buy from, scamsters are basically getting chaffed away.

Government also seems to be in the process of taking this whole process into consideration as this concept has been brought up into the Parliament of UK.

But as the expansion of London continues the buying may not stop and land continues to provide an investment opportunity.

With any investment comes the importance of maintenance. As the CEO of a large company, I wanted to ensure the greatest length of use when installing my new company investment. After purchasing a multi-line digital phone system, I wanted my purchase to last for a lifetime. This would make the cost of the investment more sufficient to my future budgets.

My employees were extremely satisfied with the new installation. Their easy-to-use features allowed for a greater productivity level throughout the company. Customers were happier; employees were as well, which leads to my current state of happiness as well.

After purchasing this large system, it was suggested that close attention be made to the maintenance of the equipment. In order for the phones to remain 100%, they must be taken care of. My employees use the system all day, 7 days a week. It is essential for the phones to remain new and fresh.

By taking time on a daily basis to clean the phones with a cotton cloth and rubbing alcohol, employees can be assured that their health is secure. This is an effective way to remove the usual residue that backs up on a phone because of its constant use. This also will lead to greater success of the phones in the future.

Studies show that most of the germs that we pass along come from the telephone. This added cleanliness factor may result in less sick days being taken by your employees. This also adds to the overall success of your company.

By maintaining the phones, my large equipment investment could be lengthened. By taking a few moments to clean the phones, their continued satisfaction for customers, my employees and myself is guaranteed. This satisfaction ensured even greater success for my business and most importantly, satisfying the concerns of my customers.

Investment Capital – Putting Brand Capital And Human Capital Above Working Capital Or Physical Capital

When you start your own business, you commit to investing your time, talent and resources in the business to make it succeed. You authorize a spending plan; you ask the bank, your credit card company, friends, family, employees, to endow the business to follow your business plan and implement your marketing plan. There’s more to it. You need to determine where you can differentiate your company from the competition, so where should you invest the most resources? To garner the most flexibility, I suggest your investment priorities should be: Brand Capital, then Human Capital, followed by Working Capital with Physical Capital at the bottom of the list.

Brand Capital: Invest the most in your market and marketing to them. Up front this could simply be focusing on a small group of prospects. Do the economics to make them well satisfied customers. So much so, that they provide the testimonials or become the spokespersons for your future sales. Remember, the high value transfer of using relationships.

Human Capital: This is your team and their track record coming on board. Only hire stars, no matter what. Only employ experts in the key roles of your company. For other positions, look for great talent you can mold to your vision, and move around to meet the company’s needs.

In addition, build a stellar Board of Advisors or Board of Directors. A Board of Advisors usually will help you for free, whereas a Board of Directors is paid. The key is to engage thought leaders in your niche who become early adopters of your product or service and advocate for you to their significant networks.

Working Capital: Invest minimally here because there’s no added value to the company or the product. Tying up cash instead of using credit may actually slow your time to market. This could be a critical timing mistake if your competition is racing you to market.

Physical Capital: Invest minimally here because bricks and mortar don’t sell product. Yes, you need a roof and windows that don’t leak (I’ve worked with many startups in the old mills where workstation layout was based on the leaks and drips.). You don’t need to be a miser. And you need the equipment, technologies and conveniences that will make everyone highly productive. Cost- effectiveness should be weighed here too.

Whenever you are investing in your business, recognize that you cannot manage everything, but you can manage the value equation of each investment. Be sure the value to your business is outstanding, so you can win business with every sale.

Below are ten categories of real estate, and different ways to invest in them. The best one for you is something only you can decide, according to your particular needs. To help you do that, I list a couple good points and bad points for each type.

1. Renting single family homes. Good points: An easier way to get started, and good long term return on investment. Bad points: Being a landlord isn’t much fun, and you typically wait a long time for the big pay-off. You also lose all your income when a house is vacant.

2. Fixer-uppers. Good points: Fast return on your investment, and it can be more creative work. Bad points: More risk (many unpredictables), and you get taxed heavily on the gain.

3. Low income housing. Good points: Similar to any other rentals, but with higher cash flow. Bad points: Similar to any other rentals, but with more repairs and tenant problems.

4. Selling rent-to-own houses. Good points: If you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Bad points: Bookkeeping can be tricky, and most tenants don’t complete the purchase (this can be an advantage too, but it does mean more work for you).

5. Commercial properties. Good points: Multi-year triple-net leases mean little management and high returns. Bad points: A tough market to break into, and you can lose income on vacant storefronts for a year at a time.

6. Land, split and resold. Good points: Simpler than some real estate investments, with the possibility of great profits. Bad points: It can be a slow process, and you have expenses, but no cash flow while you wait.

7. Boarding houses. Good points: You’ll generate more cash flow renting a house by the room, especially in a college town. Bad points: You’ll generate more headaches renting a house by the room, especially in a college town.

8. Invest cash, sell with terms. Good points: A high rate of return is possible by paying cash to get a good price, and selling on easy terms to get a high price AND high interest. Bad points: You need a lot of cash, and you tie up your capital for a long time.

9. Invest, live in it, sell it. Good points: The tax law lets you fix it up, and sell it for a big tax-free profit after two years (if you live in it), then start the process again. Bad points: You may become attached to your investment, and you’ll have to move a lot.

10. Pure speculation. Good points: You can make large profits buying in the path of growth and holding until values rise, and it is a low-management investment. Bad points: Growth in value isn’t always predictable, you have expenses with no income while you’re waiting, and transaction costs can eat much of the profits.

There are many ways to invest in real estate. These ten are just to get you thinking about what is possible, and what type of investing suits your personality. Once you figure that out, you may want to look into other categories of real estate investment.

Cyprus as an investment is good news these days for capital appreciation. Since joining the European Union in May 2004 the island has opened up to investors and seen prices go up by 30% with high demand for apartments in the Southern part of the island. There is a company to help people to invest in Cyprus using either a UK SIPPS with assistance from the UK government. Advice is required from a financial advisor before this route is used. Use the services of a professional organisation like Living Cyprus.com find them at http://www.living-cyprus.com for free advice and property for sale in Cyprus. Take a look and enjoy.
Andrew Walters is an acknowledged expert on pensions and in particular can provide advice on the suitability of using a Self Invested Personal Pension Plan (SIPP) to fund the purchase of a property in Cyprus.This is an area that we have had a lot of interest in, but reliable advice and information is hard to come by and so a talk with Andrew is definitely to be recommended, if this is something that you have heard about and would like to find out more.

For starters, if this is a type of transaction that you have not heard of or had not previously considered, here is a brief guide provided to us by Andrew on this topic.

We would like to stress that in providing this information, we are not providing an opinion on this funding option nor should this guide be considered as an alternative to independent financial advice which may be sought in the UK via Andrew at EYFS Ltd or any other authorised firm in the UK.

SIPPS another funding option for you?

As I write this in November 2005, we are in one regime with the expectation of a new regime beginning in April 2006. This article is written from the current perspective but makes reference, where relevant, to the new regime which will be effective from April 2006.

This article is based upon my understanding of current and proposed legislation. It is not exhaustive nor should it be assumed that any particular funding option is going to be suitable for you based only on the reading of this article. No liability is accepted for any actual or consequential loss arising from the use of this article as the basis of making a financial commitment without also seeking independent financial advice as an individual.

What is a SIPP?

A SIPP is a Personal Pension Plan with a self investment option. Which means that in addition to the usual choice of insurance company funds you may be offered via your personal pension plan you may also invest in a wide range of assets of your own choosing such as : individual shares or probably of more interest in this context property.

Who can have one?

To some degree anyone who has pension monies in the UK, albeit if future funding is a requirement the definition changes to anyone who is eligible to take out a personal pension in the UK which is just about everybody who is resident in the UK!

What is often overlooked is that two or more individuals can, in the right circumstances team up to use their SIPP plans to buy a property or other asset together.

This does of course have implications, but could in the right circumstances increase your funding potential and enable you to spread the inherent investment risk across a number of people.

Why havent I heard about them before?

SIPPs have been around for more than ten years but have traditionally been the province of serious investors or advisers managing large funds on a discretionary basis.

They have previously had limited appeal to smaller investors as the additional charges can tend to dilute any potential gains for smaller investors provided by the increased investment horizon. This is not to conclude that they are terribly expensive just that the charging structure is more complex. Its a horse with a course!

The reason that most people will not have come across them is that whilst previously, property purchase has always been possible via a SIPP, it has always been limited to commercial property within strict guidelines (and in the UK) a property with any aspect of residentiality was specifically excluded.

Another tricky limitation was the exclusion of any purchases from yourself, anyone in your family or a connected 3rd party this was always a bind because most of the best investment opportunities that arose in my experience fell into this category!

The Government intends, according to its indications, to lift these significant barriers from April 2006 and from then on residential properties for occupation or let in the UK or abroad will be potential investments for a SIPP and the rules on purchases from connected persons is to be relaxed – hence the considerable interest!

How do they work?

Usually a SIPP is established on a deferred basis as an add on to a personal pension plan that is the personal pension plan is established with a view to self investment in the near or more distant future and as such starts out like any other personal pension plan.

[Stakeholder pensions have not embraced SIPP functions and so if your pension fund is currently in one of these plans and you wish to self invest, a transfer may be necessary. This should not be contemplated without taking independent financial advice.]

Self investment via a SIPP is made through a trustee (usually an employee of the insurance company or a scheme administrator).

In brief, you complete a form detailing the proposed investment and the trustee has to approve it. Normally, when buying authorised unit trusts, investment trusts or securities this just amounts to a rubber stamping procedure.

However, when something more individual is proposed like a property the trustee needs to satisfy himself that the proposed investment is allowable (within Inland Revenue rules) is permissible (within the scheme rules) and is suitable (satisfies the basic needs of an investment). In practice, this is usually quite straightforward since it only makes sense to propose investments that work at all of these levels.

Once the trustee is satisfied then the investment/purchase may proceed subject to all of the usual hurdles such as a valuation, conveyance of legal title, stamp duty etc.

If a scheme is already established, then a property transaction through a SIPP should not take significantly longer to complete. Where there is no SIPP established or the transaction is reliant on funds being transferred in from other schemes it is likely that the transaction may be significantly protracted and you would be well advised not to promise your vendor any completion dates that are too optimistic.

If the purchase is being made completely from existing funds the trustee will ensure that payment is made under your guidance. If the scheme needs to borrow money to fund part of the purchase which it may do then the trustee will need to apply for funds, this can usually be from a lender of your choosing. The point to note is that it is the SIPP that is borrowing the money and not you so the transaction must satisfy the lenders criteria in its own right.

SIPPs can currently borrow up to 3 times the scheme assets. For example, if the scheme has 100 000 in assets it may borrow (subject to approval) potentially another 300 000, which means that you could go shopping with 400 000!

Unfortunately, under current rules you cannot buy residential property and by April 2006 (when you can) the scheme borrowing facility is to be capped at a more realistic 50% of scheme assets. In the same scenario as above this would reduce your shopping capacity to 150 000.

Once completed the property becomes a scheme asset administered by the trustee. It is very important that you understand the implication of this. The property is not yours it belongs to the scheme. It can be sold but the proceeds return to the scheme for re-investment. You cannot sell the property and personally pocket any of the proceeds.

With all significant financial commitments you are well advised to take independent financial advice prior to commitment funds and this is definitely the case with this type of transaction.

Advantages

In the UK, these schemes are fantastically tax efficient.

Tax relief on new contributions to eligible investors at at least the basic rate and at their highest UK rate of tax if this 40%.

Virtually tax free growth on investments whilst within the scheme.

No capital gains tax upon disposal of assets and rents on leases / lets are paid into the plan tax free.

Any interest on scheme borrowings will usually be relieved too.

Normally no inheritance tax is payable on scheme assets either

But, perhaps the biggest advantage is that it introduces a source of funds your existing pension plans – to potentially enable you to buy your property (from April 2006) which have not previously been available to you.

Whats more, new substantially increased contribution limits mean that money can be accumulated faster in schemes than at present.

and Disadvantages?

The property is not your asset it cannot therefore be considered as collateral for any other borrowings, nor can you sell it and pocket the proceeds.

Future capital gains and rental income will be potentially taxable in Cyprus (but not the UK) exposure will vary depending on how you choose to hold the property and the figures involved. IHT doesnt exist in Cyprus though fortunately. It is not therefore likely to be the most tax efficient investment that you could hold in a UK pension but still could be worthwhile.

Your choice of property may prove to be a poor investment as a result of any of the following: low capital growth or even a slump in property values, Poor rental income

If you stay in the property or reside in the property you will be expected to pay the going rate but at least you are paying it back to your own pension!

At some point, unless any property subsequently becomes a relatively insignificant part of your pension fund, you will have to sell the property to derive an income as this is, it should be remembered, the primary purpose of any pension plan! It may not, therefore, be advisable that you purchase a property late in life that you intend to live in until your death via a SIPP.

How do I find out More?
Any IFA in the UK should know what a SIPP is, but few will know the intricacies of the plan and in particular how it can be suitably harnessed for the potential purchase of a property abroad. Using my links in Cyprus, I am making it my business to put together robust and reliable means to make this possible via developers and lawyers and so I believe that I may be well worthy of consideration for assisting you with this type of transaction back in the UK.

Over the years, we have seen several kinds of investment options that have conquered the market. HYIPs or High Yield Investment Programs are the latest ones.

Hyip investment is a highly profitable business proposition that allows you to generate maximum profits for minimum investments.

The percentage of interest that you earn on your investments also varies. While some companies offer you a stable 1 to 2% daily, there are other companies that offer you much higher rates. But with the increasing rates also come the ever increasing risks.

Now that you have read about the positive cash flow, it is important that you also keep in mind, that several of these companies are nothing but scams.

Choose wisely

There are several horror stories of people who looked for Hyip investment and invested in shady companies only to find that they had disappeared within weeks.

So before you invest any of your hard earned money in an HYIP, it is recommended that you seek the services of an experienced HYIP investor or consultant.

Even you can spot a scam after you spend some time in the market. Usually these companies have extremely high daily rate of interest.

How they work

The reasons why HYIPs are so popular is because you do not have to do any kind of work at all. The only thing that you do is invest your money and watch it grow.

The HYIP has a semi automatic or completely automatic script that allows you to withdraw your money just about anytime. As an investor, you should keep withdrawing the money frequently rather than compounding it to minimize your risk.

There are experienced investors who are making a lot of money with HYIPs and with time, you too will be there. However, a lot of newbies start their investment career with losses.

First a little story about buying investment property.

My wife and I stayed at a motel in Tucson for a week one winter. Our bill was for twice what it should have been, but since I already paid the correct amount in cash, I thought nothing of it. During our stay, we noticed that the lobby and swimming pool were unheated, and passed it off as frugality. A year later, however, when I read a news story about a new owner struggling to make the motel work, I realized what was really going on.

To prepare the motel for sale, the owner had been using the two most basic ways to inflate the appraised value: decrease expenses and increase reported income. Stopping repairs, turning down the heat, and quietly adding $100 in income to the books every day, might have increased the net income for the year by $45,000 more. With a .08 capitalization rate, that means the appraisal would come in $562,000 higher than it should have. Imagine the the poor guy who overpaid!

To avoid a mistake like this when buying investment property, you need to watch for tricks like these. You also need to understand the basics of appraising income property.

Valuation of income properties start with the capitalization rate, or “cap rate.” When investors in an area expect a return of 8% on assets, the cap rate is .08. The net income before debt service is divided by this to arrive at the value of a property. This is expleained further in another article, but the primary point to remember is that every dollar of extra income shown will increase the appraised value by $12.50 with a cap rate of .08 (Or, for example, by $10, if the cap rate is .10).

Avoid Dirty Tricks When Buying Investment Property

When sellers of income properties increase the net income by honest means, the property should sell for more. However, there are many dishonest ways, both legal and fraudulent, that are sometimes used. Sellers of houses may cover foundation cracks with plaster, but the tricks used by sellers of income properties aren’t about appearance. These tricks are about income and expenses.

One way income can be inflated, is by showing you the “pro forma,” or projected income, instead of the actual rents collected. Demand the actual figures, and check to see that none of the apartments listed as occupied are actually vacant. See if any of the income is from one time events, like the sale of something.

The income from vending machines is a gray area. Many smart investors subtract this from the net income before applying the cap rate, then add back the value of the machines themselves. For example, if laundry machines make $6,000, that would add $75,000 to the appraised value (.08 cap rate), if you included it. However, since they are easily replaceable, adding the $10,000 replacement cost instead makes more sense.

The other important tricks sellers play involve hiding expenses. These can include paying for repairs off the books, or just avoiding necessary repairs for a year. This can dramatically increase the net income, meaning you pay more for the property. It also means you have less income than expected, and deferred maintenance to catch up on.

Ask for an accounting of all expenditures. If a number in an expense category is suspicious, replace it with your own best guess. Then re-figure the net income.

Look at each of the following, verifying the figures as much as possible, and substituting your own guesses if they are too suspect: vacancy rates, advertising, cleaning, maintenance, repairs, management fees, supplies, taxes, insurance, utilities, commissions, legal fees and any other expenses. Do your homework, and avoid seller’s tricks when buying investment property.

When IRAs, 401(k)s, and Other Tax-sheltered Investments Dont Make Sense

Every year about this time, people start talking about and considering things like IRA contributions. Most of the time, tax-sheltered investments make great sense. The federal and state governments have designed their tax laws to encourage such savings. However, that said, there are three situations in which it may be a poor idea to use tax-sheltered investments:

You know youll need the money early

In this case, it may not be a good idea to lock away money you may need before retirement because there is usually a 10 percent early-withdrawal penalty paid on money retrieved from a retirement account before age 59 1/2. But you will also need money after you retire, so the What if I need the money? argument is more than a little weak. Yes, you may need the money before you retire, but you will absolutely need money after you retire.

You dont need to save any more for retirement

Using retirement planning vehicles, such as IRAs, may be a reasonable way to accumulate wealth. And the deferred taxes on your investment income do make your savings grow much more quickly. Nevertheless, if youve already saved enough money for retirement, its possible that you should consider other investment options as well as estate planning issues. This special case is beyond the scope of this book, but if it applies to you, I encourage you to consult a good personal financial plannerpreferably one who charges you an hourly fee, not one who earns a commission by selling you financial products you may not need.

Your tax rate will rise in retirement

The calculations get tricky, but if youre only a few years away from retirement and you believe income tax rates will be going up (perhaps to deal with the huge federal-budget deficit or because youll be paying a new state income tax), it may not make sense for you to save, say, 15 percent now but pay 45 percent later.