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All About an Investment Property’s Depreciation

DepreciationDepreciation is one of the most talked about topics when it comes to investment property. This is no surprise as every investor and owner will want to make sure that the value of their assets are preserved or at least used to their maximum capacity.

This is why today we’re giving you a little rundown on the basics of asset depreciation. It never hurts to learn a thing or two about how these assets are accounted for. Knowledge is power after all, right?

There are many ways to define and explain depreciation and here are a few of them.

  • It refers to the amount or percentage by which something decreases in value over time.
  • It is a decrease in the value of a fixed asset with the passage of time due in particular to wear and tear.
  • It is that portion of an asset which is expected to be used for a long period of time but is not meant to last forever that is reported as an expense in the income statement and is a deductible item for tax purposes.

There are a number of methods by which an investment property is to be depreciated. Each alternative has its pros and cons and is beneficial given specific circumstances. It is best to talk to your accountant when about these.

  • Straight Line– Considered to be the simplest and widely used method, this charges an equal amount of depreciation expense for every period. It is simply calculated as the book value less salvage value all over the remaining useful life.
  • Units of Production– This charges an equal expense for each unit rendered by the asset. It is best used for assets that are not in continuous use and when the property’s value is more closely related to the number of units it produces than the number of years it is in use.
  • Sum of the Years Digits– This is an accelerated depreciation technique that is based on the assumption that a property is generally more productive when it is new and its productivity decreases as it ages. It is computed by multiplying the asset’s depreciable cost by a series of fractions based on the sum of the asset’s useful life digits.
  • Double Declining Balance– Another of the two types of accelerated methods; this calculates a depreciation expense in the first years of a property investment’s life and then it gradually decreases in the succeeding years. It is used for when the functionality of the asset is consumed in rapid rates during its initial useful years and/or when there is intent to recognize more expense today so as to use it for deferring income taxes.

Maintenance and Repair Tips for Your Investment Property

investment property maintenanceOwning an investment property is serious business. There’s a lot of responsibility that goes with it and that includes repairs and maintenance.

Upkeep says a lot in terms of how long an asset shall remain functional, how sturdy it stays through the years and how financially valuable it becomes. With that said, the following tips would surely come in handy. Take a look.

Prior to a purchase, have ongoing costs estimated. – When looking around for a property investment, it is important to have a chartered surveyor gauge and estimate the ongoing costs needed in it. This shall give you an idea as to how much the upkeep will require of you. Some assets may seem affordable at the upfront but have staggering repair and maintenance costs so in the long run they become very expensive and burdensome.

Always check the condition of your roof. – It’s a huge project on its own plus it can be very pricey so you won’t want to end up having to replace it sometime soon. This is why a regular inspection should be done at least monthly to address immediate repairs and avoid the problem from getting worse. The winter months could be particularly harsh.

Pay attention to your pipes. – Plumbing is important because it keeps the water where it should be. Busted pipes can make you end up with an indoor pool of sorts. That’s not only a huge mess to clean but it also poses risks to your furniture. Address any leaks immediately.

Keep moisture at bay. – Rain, plumbing leaks and any other type of moisture and humidity spell trouble as they can cause cracks to your walls, rotting of wooden floors and other dilemmas. How do you do this? Clean out your gutters to ensure that rain water or snow does not accumulate in. Seal your bathroom caulk to prevent moisture from entering your walls. Check the caulking on your windows and doors as well.

Invest in warranties. – When buying equipment and furniture, invest in the purchase warranties. Repair costs can be expensive in the long run but with such a prepaid spending, it gives you more leeway and less financial headaches in case something goes bust.

Build relationships with your professionals. – Chances are you are going to hire the same people to work on your investment property’s repairs and maintenance. This makes it a good idea to build a relationship with such parties and companies. This way, you get first dibs on discounts and you also get to have people who know your property best.

Moving into that Newly Bought Residential Investment for Sale?

residential-investmentsMoving house isn’t as easy as it sounds. As much as we would like to think it is, it simply doesn’t work that way. So what can you do then? Will it be forever tough or can you some things to make everything run smoother? Yes you can and that is by doing a few certain tasks before the moving day itself. Here are a few tips and reminders as you move into that newly bought residential investment for sale!

  • Call for help. – This can be family and friends or the professional movers themselves. You have to call them up early on and not when the moving date is nearing. The earlier you do this then the better. Remember that your time isn’t the only thing that matters here.
  • Buy and gather all the necessary supplies and tools. – You have to pack your belongings and you cannot do that without the things to do it with. Make an inventory and assessment of your items so you know how much and what kind of supplies and tools you will need.
  • Make a packing schedule. – This makes it easier to track and determine the tasks to be done in terms of the packing. In all areas of the relocation, this is the most time consuming and labour intensive. By putting a schedule and assigning people to it, you will be able to course through it more systematically.
  • Take note of utilities. – Be sure that once you move out, the utilities at your old place have been cut so you won’t be paying for services that you don’t even use or need anymore. At the same time see to it that you’ve already had the said utilities up and running at the new home even before you move in.
  • Change you postal address. – Do this early on so there won’t be any mix-ups and lost mails and packages in the future. Just to be sure you might want to ask your neighbour or the new owners of the place for a little favour in case there are still post sent there.
  • Know your new town. – Familiarize yourself with the city and with the community you live in. Know where certain establishments are located and familiarize with roads and transportation routes.

You see, work doesn’t end as you buy that awesome residential investment for sale. There’s more to do, moving included but hey these are exciting times ahead! No ned to pout now.

How to Market an Investment Property for Sale

investment property for saleWhether it’s your line of business or you’re simply disposing off an idle piece of asset, marketing an investment property for sale is crucial to success. Think about it. Regardless of how valuable and aptly endowed a certain asset is, no buyer will consider it if they didn’t know that it was up for grabs in the first place. You have to put the word out there and you need to do it right. Effective marketing can get you a deal even more than you initially expected. To give you a few ideas on how to achieve such feat, read up!

Place a noticeable sign up front.

This method is the least costly and all you will ever need are items that you may already have or is only one ride away from the supply store. Place a “For Sale” sign on the property’s windows and hammer down a larger board outside for more pedestrians and commuters to see. It’s simple but it’s one way of getting the announcement ball rolling.

Take advantage of online presence.

If you have a website, a blog or social media accounts for your business then it would make sense if you advertise using these media as well. Never underestimate the power of viral internet content. Plus, if you already own these accounts then it will cost you less to none to achieve this.

Use traditional print and media.

Even in the digital age, people still fancy their morning papers and magazines. Take this as an opportunity to advertise the sale of your retail space. If you have the budget for it, you can also go for television and radio ads but considering the fact that these two can be hefty, it is mostly taken only by huge firms and real estate companies.

Employ word of mouth.

Talk about it and mention to people that you have a retail property for sale. It can be a friend, relatives, colleagues, business partners, suppliers, customers or even establishments adjacent to and beside the asset you are selling. Not only is word of mouth the oldest and most powerful form of advertising, it’s also free. It is also the strategic tool that makes social media a powerful means to spread news and awareness.

Get a professional to do it.

If you want a pro to handle it or if you simply do not have the time to focus on the task, getting a professional agent to put your investment property for sale will be your best option.

Reminders When Participating in Property Auctions Online

property auctionWith the advent of technology and the internet, we are given more ways to do and achieve our goals. Real estate investments for one have found a new avenue to showcase and sell off valuable assets to interested buyers with a few clicks of a button in a system we call as property auctions online.

As its name suggests, it is a transaction that primarily but not entirely and exclusively occurs in cyberspace. Just like any other property auction, it is an accelerated marketing process that involves the competitive bidding among a group of interested parties over an asset or a group thereof. The highest bidder is awarded with the sale. It should be noted however that said bidder must comply and fulfill the requirements and procedures otherwise he or she forfeits the property.

But just like any other trading event, property auctions online are no easy matter. It takes skill, knowledge, experience and even some luck. To help you along, we’ve got some tips to share. Take a look.

Always come with a plan on hand. A strategy is necessary with any acquisition especially if it is something as competitive as a bidding war. It not only helps with winning a particular property but more so on choosing which assets to bid on.

Prepare financing beforehand. Auctions are pretty demanding when it comes to fulfilling requirements. Some sites would in fact require a security deposit to ensure sincerity of participants in the bidding process. This is after all not just for play. Also, an upfront down payment may be required. Financing, as we know, can take time so be sure to tap resources ahead of schedule.

Research and do your homework. Just because the auction is held online doesn’t mean that one no longer has to visit and check on the assets being sold off. Brochures and listings are likely to be made available on the site before the auction day itself. This is the perfect time to research and assess the assets. Visit them and check thoroughly to avoid wrong investments.

Set a limit and stick to it. One of the common fallouts when it comes to property auctions online is that the bidders tend to overspend and overbid on an asset; sometimes, even more than they are capable of. This is a huge mistake as it is not only financially taxing may also hurt the return on investment in the future.

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Commercial Investment Property for Sale in the UK

uk real estateWhen it comes to real estate investments, many would suggest that it would be best to put your money in a commercial investment property for sale in the UK. Just like you, we’ve been curious and we have been asking why. Luckily, experts have come to our aid and answered our queries. Below is what they have imparted to us.

  • First, the UK is a big economy.

With London considered to be one of the three world economy command centers in the world, the UK is a founding member of both the North Atlantic Treaty Organization and the United Nations as well as a member of the G8, a governmental political forum of leading advanced economies in the world. It is thought to be both politically and economically stable.

  • Second, its tourism is one of the world’s best.

The United Kingdom boasts of a very promising tourism industry with millions of tourists flocking the country each year. It is home to landmarks such as the Tower of London, Kew Gardens, Palace of Westminster, Saint Margaret’s Church, Westminster Abbey, Buckingham Palace, London Eye, Madame Tussaud’s, Tower Bridge, Trafalgar Square, Piccadilly Circus, British Museum, The Shard, Tate Modern, National Gallery and the British Library.

  • Third, it is a potluck of people.

The United Kingdom has a steady growing population and is a potluck of various cultures and races. There are jobs in the country. It is one of the leading financial centers in the world and is home to various renowned and celebrated educational institutions. This makes way for the rise in the demand for certain good and services or businesses per se. This, together with the country’s booming tourism sector and the UK economy brings us to the next item on our list.

  • Lastly, businesses flock the area.

A lot of businesses open up shop in the UK because of its potential. Tourism and economy are two major factors that attract both people and entrepreneurs. As an investor of a commercial property, this is very good news to you as it basically heightens the demand for commercial spaces either for sale or for lease. Since land does not exactly multiply and with the demand on the rise, the appreciation potential of a commercial investment property for sale in the UK grows well and is able to provide for good returns.

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