Buy to Let and teh Credit Crunch

For Buy to Let market, the last few months have been difficult for the landlords with the credit crunch came increase on arrears, lack of buy to let mortgages and tougher lender?s criteria. But it is not all bad news, the houses are cheaper to buy, the rents still increasing and rental demand at all time high.

Credit Crunch

Last year, we started to see the effects of too much borrowing and declining in house prices in USA. One year later, economies throughout the world started to collapse, financial institutions going into administration, Governments in the verge of bankruptcy, mortgage lending at very low levels, UK house prices coming down and a global recession.

It?s all bad news, no! The buy to let market is stronger than ever with the demand for rental properties being higher than ever, due to first time buyers not moving into the ladder and immigration from east European countries. Within a dreadful situation, we can always find good opportunities.

2009 New Year, New Hopes!

It will be into 2009 that we shall see some improvement on the lending, specially buy to let mortgages.

It?s been predicted the houses prices will still coming down but at much lower pace and probably in 2010 they may start coming up.

For the landlords it?s a time to consolidate and review their portfolio with great opportunities to invest if you are in strong position.

Buy to let Market

Between 2004 and 2006 the buy to let boomed, due to easily accessible buy to let mortgages and property prices growth. Now the buy to let mortgage diminish, tougher lenders? criteria, specially rental cover, and house prices are coming down.

Buy-to-let is no longer sizzling and many investors that started being a landlord in recent years are struggling as mortgage rates rise. Many could not change mortgages due to low or negative equity, so when the initial rate deal came to an end and they started to pay the Standard Variable rate of the Lender, the rent was not enough to cover the mortgage payments.

Within the most affected are those investors who bought properties at a suppose discount to sale straight away, looking for short term investment but when properties prices started to come down and the houses taking longer to sale, they run to serious problems.

The golden rule of buy to let investment is to look as a long-term investment, taking seriously. If the landlords invest wisely, look at long term, do the homework and stick to the tried and tested method of investing for rental returns rather than capital growth, they will be successful. Otherwise, the investor will probably run into serious problems.

Buy to let investment does not guaranteed success as any other investment but doing it well and it can be an excellent piggy bank for retirement.

I am leaving now some tips for all professional or first time landlords:

Do your homework

If you are a first time landlord look at pitfalls before you look at the benefits, buy to let investments are time consuming, therefore think if it is the right time to invest in buy to let or leave the money on a good savings account.

If you are already a seasoned landlord, do not stretch yourself, look first to consolidate and add strength to your portfolio, as if you are in stronger position your next investment will run smoothly. Location, Location, Location

It pays to choose carefully where your next buy to let property will be. This does not mean to buy on a cheaper or expensive location but rather the rental demand in the area. Look for clues like if is near a University or Hospital, very trendy area for professionals, excellent amenities and links, etc. Avoid all cost areas with oversupply of properties to let, look at properties and letting agents? websites and if a certain area has numerous properties to let, think if you want that kind of competition as you may have to negotiate the rent down to let the property.

Look at the figures

Before you buy, take a look at several properties, writing down the ones are of your interest. Look at the rental yields on them, see if the rental income covers at least 125% of the mortgage payments and if worth to spend around 25% on a deposit, this will help you to secure finance and a good rental yield. Many lenders restricted the Loan to values to 75% or less and rental cover to 120%-125%, you can still arrange products with less rental cover but think if you want to restrict your rental yield.

Your target tenant

Think who will be your tenant and imagine in his shoes? If you are student you like a place to be comfortable and clean, links to university, nothing luxurious. If you are a professional you will be looking at a modern and stylish interior but nothing too pretentious, and excellent links. If it is for a family rental, do not put any furniture in, leave as a blank canvas, normally over the years the family has a few belongings they want to take to the next property.

Look into your portfolio

Review your portfolio, see if the initial rate deals in any of the mortgaged properties ended and compare the rate you are or will be paying with the rates currently in the market. If you are better off with the lender?s Standard Variable rate, does not mean you stop looking for a better deal. Try to look once a month for new rates or ask to your adviser to keep an eye on the products.

See if there is any opportunity within your portfolio to get a higher rental income. Why not transform a house with 3 bedrooms, 1 dining and 1 living room into a 4 bedroom house with living/dining room; make a loft conversion/extension to get 1 or 2 more bedrooms; renting by the room, as by the room the rental income is normally higher (but must be on right area). The possibilities are immense to add value to your portfolio and increase your rental income without spending as much money as buying another property.

Look at other areas

Most Landlords invest where they live but most of the good opportunities are normally in other areas. Do not be afraid, as if you follow the golden rule, can be very time consuming investing areas away but can be worthwhile.

Ask for a discount

When you buy an investment property, you must not forget you enjoy the same benefits of a First time buyer - No chains, so you can move quickly. If you do not ask for a discount you will not have it.

Avoid Tenancy pitfalls

Put aside at least 2 months of rent, in case when your tenant move out or when you just bought a property will help towards the mortgage payments until you find a tenant.

Worth paying for a complete tenant check report, where the provider will get you a credit file of the prospective tenants, check their ID, get the references and they are not expensive. It is not guaranteed you will be good tenants but helps a lot. Also, you should consider a rent guaranteed insurance, where can cover for rent arrears, pay towards the legal costs to evict the tenants and damage made on the property. With this type of insurance you may request a lower deposit from the tenants to match the excess of the insurance, that may help to secure a tenancy quicker.

Shop around

Shop around for letting agents, ask a discount to traders: plumbers, furniture. The more you save the higher will be the return from the investment.

Super Mortgages

Buy to let Mortgages in UK | Buy to let Mortgages

Getting Best Auto Loan Rates with Low Interest in Washington

With US government's decision of bail-out to major players of auto makers due to the credit crisis, prices of many well-know new car models have gone down. Moreover, used vehicle prices have also fallen nearly by 6 percent as repossessed cars, trucks and S.U.V. s flood auction lots. Which has ultimately affected the auto financing industry with interest rates in Washington State and across US are at all time low. So at a time when it s difficult to lower your car loan rates as little as half a percentage you are at current, able to get two or three percentage lower while improving your credit history.

Available car loans rate in Washington as per sources for new cars are between 6.5 to 8.5 and 7.5 to 9 for used automobile.

Moreover, with E-commerce on its edge more and more people are turning to online auto financing rather than going to dealership where they get chance to match and compare different quotes through different lenders being at home. And if you are a resident of Washington, whether it is Seattle, Everett or any other part of the state and in the market for an automobile, there are various online financing and auto refinancing option available to ease your search and make your car buying experience convenient and hassle free even with bad credit, no credit or bankruptcy.

Buying a new or used car you want and going, to and fro at work on your own leisure can be a wonderful experience. However, getting the right interest rate is important, particularly for people with bad credit. Getting a Washington bad credit auto loan can be the best alternative for people with bad or poor credit to buy a car with limited income while repairing your credit as it allows the customer to choose the best rate from a number of financing sources easily by filling an online application form available on various car loan sites.

Washington auto loans offered in nearly all the area including Seattle, Bellevue, Bellingham, Bremerton, Olympia, Vancouver-Longview, Whidbey Island and so on by online automobile lenders give you opportunity to have lower rates on auto loan regardless of bad credit history with instant and guaranteed approval at your convenience. Whereby your personal information will be submitted within our network of qualified local lenders or financial institution across the state of Washington to get you flexible terms and best deal. Car and Auto Loans

Getting Online Auto Loans in Colorado

Auto dealers may be facing challenges selling car in Colorado due to credit crisis, however it is helping the borrowers to get auto loans at comparably lower rates while improving their credit.

That too with online car financing people are offered low interest auto loan which has proved beneficial especially for first time buyers or buyers with credit issues i.e. no credit, poor credit or bankruptcy to get approved for car loan.

It has also made easy for the people of Colorado to get their car financed instantly being at home with various financing options like

no down payment, no prepayment penalties or no application fees that are difficult to obtain with traditional method of car financing.

In brief, the online car financing has arrived as a boon for all the Americans while offering security of data and without any bias.

Online automobile lenders offers vehicle loans in Colorado for new or used car purchases from either dealership or private seller. Auto Loan approvals are quick and easy with our extensive network of auto financing specialists covering almost all the areas of Colorado including Arvada, Boulder, Colorado Springs, Cortez, Denver, Durango, Fort Collins-Loveland, Grand Junction-Montrose, Greeley, Lakewood, Westminster and many more. You can get guaranteed and instant approval auto loan financing for your car with low rates and even with bad credit or no credit. Car and Auto Loan

Online Accounting Services for New Business Setup

Every new business requires right accounting planning, proper functioning and monitoring. Failing to do so, no business can survive for longer in the market. Even a small mistake and lack of proper accounting planning can cause heavy financial loss to business. Although all these accounting tasks can be performed manually, but it is so costly that small business can t afford its prices, especially new businesses. So now a days many businesses are using online accounting services in place of manual accounting services.

Online accounting services not only save time and money but also give accurate results that assists in convenient functioning and monitoring of the business. However one cannot rely on manual accounting services to achieve 100% accurate results.

Online accounting services can easily handle all your accounting tasks, either day to day accounting activities or long term accounting planning and functions. It is easy to use any where and any time without any detailed technical knowledge. New business can easily save money, time and man power by using these online accounting services and find a better result than manual accounting services.

Online accounting services provide 24 x 7 technical supports online and if needed it provide technical trainers as well as accountants also to fulfill your all types of accounting needs.

Online accounting services can be used for all types of tax preparation and tax return also with complete accuracy. It also suggests the best tax saving plan for your business in compliance with financial policies. Thus by using online accounting services you can not only manage your business conveniently but also by saving valuable time, money and other resources, you can increase the productivity of your business.

Try Online accounting, online bookkeeping and tax preparation services absolutely free for one month and experience the most convenient outsourcing tax preparation and other accounting services online. Tax and Accounting

Outsourcing Accounting to US - Powerful Business Strategy

Thanks to the latest technology, you don t have to hire someone full-time or even part-time to stay in your office and handle all of your financial matters. Instead, you can use a reliable online accounting company to do this part of the work for you.

One of the biggest benefits of choosing this option is that you can have access to professional services from the convenience of your office via the Internet. Online accounting services allow you to have the assistance of professionals in the area that can help you but without charging you a small fortune. By outsourcing to a US accounting company, you ll be able to receive the same professional service you would expect but can do so more economically.

Important Services to Look For:-

When you are trying to locate a high quality company for your outsourced accounting services, make sure you pay attention to the details of what is offered. For example, online tax preparation could be a valuable service that could help your company save time and money because you won t have to do the taxes in-house, pay an expensive accountant to fill out the paperwork, or worry about being audited later one. You ll also want to look at the company s online bookkeeping services, such as handling your accounts receivable and payable or assisting with your payroll management.

You should also focus on US-based accounting services. While other countries may be able to provide good services, too, only a company based in the United States is going to fully understand the accounting needs your business faces. They ll also be familiar with tax laws and other financial requirements which may be unique to different countries.

Finding the Right Company:-

If you re looking for these types of services, you can hire a professional organization that can do all of this and more. This concern also provides professional trainers and accountants so that you could manage your business effectively and efficiently. Some professional concern offers free service for a limited period so that you could understand better that how these services are helpful for your business.

Get free online accounting, bookkeeping and tax preparation services absolutely free for one month at Ferrarabusiness.com, National leaders in the field of online accounting and outsource tax return services for conveniently managing businesses online. Bookkeeping

Banking - Back to the Basics

Few banks have yet emerged from the global banking crisis and the resultant recession unscathed, especially the top-tier. With interest rate cuts, sharp increases in unemployment, wage deflation across continents, further sharp falls in asset prices, the recession is showing no signs of recession in the near future.

All banks are today looking at reducing costs, be it IT budgets, Travel, Human Resources; in short from cap-ex to op-ex. The question is - Does this alone solve the challenges that are faced, if only they did!

If doing more with less was Bank s mantra in 2008 then 2009 is time to edit it a little "Doing Much more with Even less" is the key. Fighting and surviving the crisis while registering growth in troubled times is a bank s near-term vision.

Banking on the more dependable fee income and other sure and recurring revenues are some immediate steps in the right direction of tackling the challenge faced by the banks. While banks continue to center on fee based income the heat on increasing deposits should not be turned off. Balance based charging, balance offsetting and offering earnings credit to worthy customers should be the hymn.

No more efficiency gaps for banks, not any more seepage, no more taping over the cracks. Automating and centralizing pricing and billing and tackling the revenue leakage challenge, finding and retaining profitable customers is the enabler.

Expense reduction is the other foundation. Banks need to at this point in time consolidate redundant systems, streamline processes and automate for minimum manual intervention. The pricing patterns need to be re-looked at, taking into consideration behavioral influencers. Charging a high price for costly products/services like branch usage, other bank ATM usage and low price for less costly items on the menu like internet/mobile banking should help. Advanced costing models also need to be put in place. Outsourcing non-core activities need to be looked at with much more gravity.

As put by a leading analyst, business Intelligence will be the cornerstone of competitive success for financial institutions in 2009 - Understanding client expectations about products and channels and delivering on that promise will determine the leaders in financial services. Making sure that banks promise what they can deliver and delivering what they promise will be the key. For this a single customer view becomes imperative. Analysis of usage pattern, forecasting customer behavior, finding the optimal price for the customer/segment, better customer segmentation and offering personalized products/pricing should be the focus.

Needless to say 2009 will be the year of innovations, innovations especially in the arena of customer acquisition and retention Strategies. Investments need to focus on new customer acquisition, cross and up-selling, risk-based pricing and aggressively pushing web channels.

Some things go without saying, but are best when said, competition for instance. Competition to say the least will be heavy, not just from traditional players but from the non-traditional (In 2007, 47% of the top 100 non-financial services brands had in-house capabilities to provide financial services to customers this is expected to reach 90% in 2011!) ones too, scoring brownies while banks are in troubled times and reducing time-to-market.

As I mentioned before bank budgets cut are real and absolute, but scope for selected spending should not be cut, because that move could slash into the bone, resulting in more loss than gain in the long run. Spend on risk analytics (especially interconnected nature of risk), Centralized Pricing and Billing and MIS should be continued if not heightened as the demand for better intelligence and efficiency from within the enterprise and better customer experience and wallet share from outside the enterprise is going to be the tune the banks will need to play in 2009 and ahead.

Jebin George

Finance

Financial and Cost Statements

An indispensable part of any system of accounting is programmed of periodical statements and reports to inform management of the current financial position of the business and of the progress made by, and the costs incurred for, each process, department and division. The number of statements and reports and their characters differ according to the requirements of management of each business enterprise. The following statements and supporting cost reports are commonly prepared for the management; (1) balance sheet, (2) profit and loss statement or income statement supported by statement of cost of goods manufactured and sold.

Balance sheet is a statement of assets and liabilities which reveals the financial position of the business. A balance sheet prepared for a manufacturing enterprise is similar in form and contents to the balance sheet of concerns engaged in merchandising activities, with the exception that it requires three inventory accounts i.e., raw materials, work in process and finished goods. The income statement of a manufacturing company and a merchandising company reflects the basic difference in operations of these two types of enterprises.

The manufacturing company transforms raw material into finished goods through the use of labor and factory facilities (for example, a company manufacturing furniture from wood or timber). A merchandising company, such as a retail furniture store which buys finished furniture and sells it in the same form i.e., sells the goods it buys without changing the basic form. The income statement which is prepared by a merchandising concern needs no calculations of cost of goods manufactured. But the income statements prepared by the manufacturing concern requires the calculations for the cost of goods manufactured.

The income statement or condensed statement of profit and loss shows the profit or loss of the business, while the cost of goods manufactured and sold statement reveals the cost to make and sell. The cost of goods sold section of the income statement of a manufacturing business can be divided into five distinct parts:

(1) Direct materials section; it comprises of beginning inventory, purchases and purchases returns and allowances and ending inventory.

(2) Direct labor section; it includes the cost of employees whose work can be identified directly with the product manufactured.

(3) Factory overhead; it comprises of all those costs that assist in an indirect manner in the manufacturing of the product e.g., indirect materials, indirect labor, depreciation of plant and machinery, depreciation of building, rent of factory building, repairs and insurance of factory plant and machinery etc. It is to be noted that with regard to factory overhead recording, there may be three possibilities: (A) Only actual factory overhead incurred are given. (B) Only applied factory overhead are provided. (C) Both actual and applied factory overhead are given. When both actual and applied factory overhead are known then the difference is analyzed which is known as under or over applied factory overhead which is shown in the cost of goods sold or income statement. Under or Over Applied Factory Overhead is the difference of actual factory over head and applied factory overhead. I applied factory overhead are less than actual factory overhead, the variance is known as under applied factory overhead. On the other hand when applied factory overhead are more than the actual factory overhead, the variance is called over applied factory overhead. Under applied overhead are added while over applied overhead are deducted from cost of goods sold at normal.

(4) Work in process inventories; these represent the costs in process at the beginning and costs still in process at the end of the fiscal period.

(5) Finished goods inventories; These represent the cost of finished goods inventories present at the beginning and at the end of the fiscal period.

The income statement is based upon the sales or revenue, costs and expenses of manufacturing, selling or marketing, administrating, other income and expense items. The income statement is the complementary to the balance sheet.

Rashid Javed is an Asian author. He writes about financial and managerial accounting articles, financial statement analysis, and accounting ratios. Financial Education

Financial Statement Analysis

ll financial statements are essentially historically historical documents. They tell what has happened during a particular period of time. However most users of financial statements are concerned about what will happen in the future. Stockholders are concerned with future earnings and dividends. Creditors are concerned with the company's future ability to repay its debts. Managers are concerned with the company's ability to finance future expansion. Despite the fact that financial statements are historical documents, they can still provide valuable information bearing on all of these concerns.

Financial statement analysis involves careful selection of data from financial statements for the primary purpose of forecasting the financial health of the company. This is accomplished by examining trends in key financial data, comparing financial data across companies, and analyzing key financial ratios.

Managers are also widely concerned with the financial ratios. First the ratios provide indicators of how well the company and its business units are performing. Some of these ratios would ordinarily be used in a balanced scorecard approach. The specific ratios selected depend on the company s strategy. For example a company that wants to emphasize responsiveness to customers may closely monitor the inventory turnover ratio. Since managers must report to shareholders and may wish to raise funds from external sources, managers must pay attention to the financial ratios used by external inventories to evaluate the company's investment potential and creditworthiness.

Although financial statement analysis is a highly useful tool, it has two limitations. These two limitations involve the comparability of financial data between companies and the need to look beyond ratios. Comparison of one company with another can provide valuable clues about the financial health of an organization. Unfortunately, differences in accounting methods between companies sometime makes it difficult to compare the companies financial data. For example if one company values its inventories by the LIFO method and another firm by average cost method, then direct comparisons of financial data such as inventory valuations are and cost of goods sold between the two firms may be misleading. Some times enough data are presented in foot notes to the financial statements to restate data to a comparable basis. Otherwise, the analyst should keep in mind the lack of comparability of the data before drawing any definite conclusion. Nevertheless, even with this limitation in mind, comparisons of key ratios with other companies and with industry averages often suggest avenues for further investigation.

An inexperienced analyst may assume that ratios are sufficient in themselves as a basis for judgment about the future. Nothing could be further from the truth. Conclusions based on ratio analysis must be regarded as tentative. Ratios should not be viewed as an end, but rather they should be viewed as a starting point, as indicators of what to pursue in greater depth. They raise may questions, but they rarely answer any question by themselves. In addition to ratios, other sources of data should be analyzed in order to make judgments about the future of an organization. They analyst should look, for example, at industry trends, technological changes, changes in consumer tastes, changes in broad economic factors, and changes within the firm itself. A recent change in a key management position, for example, might provide a basis for optimism about the future, even though the past performance of the firm may have been mediocre.

Few figures appearing on financial statements have much significance standing by themselves. It is the relationship of one figure to another and the amount and direction of change over time that are important in financial statement analysis. How does the analyst key in on significant relationship? How does the analyst dig out the important trends and changes in a company? Three analytical techniques are widely used; dollar and percentage changes on statements, common-size statements, and financial ratios formulas.

Rashid Javed is an Asian author. He writes about financial statement analysis, and accounting ratios. Financial Education