Vacation Home or Investment Property in Florida Pays for Itself
Right now there are plenty of opportunities to purchase some deals in the Florida real estate market. One of the best opportunities I have seen on the market lately is an auction on May 16th in Panama City Beach. The auction features 223 1, 2, and 3 bedroom condos and 24 townhomes in a single condo community. The condo fees are reasonable, the properties are practically brand new, and the amenities are great including a huge lagoon style pool, fitness center, parking garage and indoor basketball court.
With so many properties for sale in a single area, let alone a single community means that the properties will sell relatively cheaply. Thus, for very little initial payment you can get a practically maintenancefree vacation property or investment property. Rental rates for the Panama Beach area run around $750 a month for a 2 bedroom unit. Do the math. The condo fees for a 2 bedroom are $175 a month. Say another $150 a month for real estate taxes. This gives you fixed monthly expenses of $325 a month with the potential to earn $400 a month in profit.
With so many units being auctioned at once, I would doubt that the units will sell for more than $30,000 each. Even that seems a bit high. At an auction I attended in Orlando a few weeks ago there were 3 units for sale in the same building. Other people in the building were trying to sell their units, with the eact same floorplan and square footage, for up to $400,000. At the auction, the first property went for around $72,000. The next two were for $65,000. Right now the supply is greater than the demand so the prices are not going to get that high. While that is bad for the banks foreclosing on the properties it is great for the investors looking to purchase. Take the invseting plunge. This is a great market for it.
What You Need to Know Before Starting a Business
Many people who have been laid off due to the poor economy have decided to take this as an opportunity to follow their dreams and start their own business. While most Americans might not realize it, America runs on small business. Yes, we have the big boys like Wal-Mart, Ford, Bank of America and many others, however, the majority of Americans work at small businesses with less than 25 employees that makes less than $5 million dollars a year. I have personally worked for a few such businesses and have spent time working with others to help them get started.
There are many benefits from working for a small company. However, if the company isn’t run properly, be careful. The first thing that new business owners need to do is decide the type of business form.
If the business is going to be a corporation, LLC, or partnership you need to set up a separate business banking account to use for the business. This is extremely important but is often overlooked by small business owners just starting up. If you don’t maintain a separate account for business purposes, it will be difficult to maintain proper books for the business which will really hurt when tax time rolls around.
Owners also need to maintain proper accounting books for their business. This allows the owner to see where the money is going, which products are making money, and whether the business is actually making a profit. Just because a business is bringing in money doesn’t mean that it is actually making a profit. To have a successful business you need to know what is happening to your cash.
Exploring Individual Retirement Accounts
1. Who can contribute?
IRAs are a great way to save towards retirement. Taxpayers younger than 70 1/2 on December 31st are eligible to contribute to an IRA.
2. How much can I contribute?
If you do not have a retirement plan with your employer, you can put $5,000 a year in an IRA ($6,000 if you are 50 or older) into a traditional IRA as long as you make at least that amount of taxable income during the year. Contributions can be made for a taxable year any time from January 1st of that year to April 15th of the following year when taxes are due.
3. What’s the benefit to having an IRA?
IRAs are a great way to save towards retirement. Traditional IRAs allow people to save money with pretax dollars. Roth IRAs allow people to put money into an account with after tax dollars and the money grows tax free. That means that you won’t have to pay taxes on the interest that accrues on your investment. Another great benefit of an IRA is because it is a way to save for retirement the money in your IRA will be protected from bankruptcy.
4. When can I get my money out of the IRA?
Money put into an IRA generally can’t be taken out before you reach 59 1/2 years old without a penalty. However, there are a few instances where the IRS will kindly give you a pass to use the funds before reaching before reaching 59 1/2 without a penalty, these include:
* distributions for the cost of medical insurance while unemployed,
* distributions to buy a home for first time home buyers (this is limited to a distribution of $10,000),
*distributions to pay for a qualified higher education for your education, your children’s education, or your grandchildren’s education.
5. How do I get an IRA?
Talk to someone at your local bank or check out opening an account online through a trading company like Scottrade or Sharebuilder. The process is very simple and only takes a few minutes. Once you set up your IRA you can use the money deposited in the account to invest in stocks, bond, mutual funds or just leave it in your money market account to accrue interest.
Retiring a Millionaire
Americans like to spend, we like to live comfortably, but we also want to enjoy life and be able to retire someday. So how can we do both? Every once in a while you hear stories about a person who made around $30,000 a year and then when he died donated a million dollars to some charity. So how did he do that and can I do the same?
Yes, if you are saving. Many of these stories about surprising wealth at retirement are from people who started saving early in life and saved continuously. If you set aside some money each paycheck and invest it in the stock market or other investments and don’t touch the money until retirement you can live very comfortably.
The key to saving is to not spend money on things you don’t need. Yes that sounds obvious but have you ever stopped to consider what you are spending your money on and what you are actually getting for the money. Instead of spending $30 taking your wife or girlfriend out to a movie, you can spend $1 and rent a movie at the local RedBox at your McDonald’s or Wal-Mart and microwave your own popcorn or just watch a movie together on the television. You aren’t slumming but you also aren’t wasting money either.
Also, the earlier you can start saving for retirement, the better. The earlier money is put into a savings or investment account, the more time it has to increase through interest, dividends, and appreciation. True most 20 year olds are not thinking about retirement but when they reach 55 they will wish they had though about it more as a 20 something.