Monthly Archives: April 2013

Eight Steps to Reducing Credit Card Debt

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Carrying credit card debt is very costly, not only because you have to pay all of the interest charges, but also because your future income is committed to paying for your past purchases. Reducing your credit card debt allows you to keep more of your income, in addition to increasing your credit score and making it easier for you to borrow at low interest rates when you need to in the future.

  1. Stop Using Cards

    • Nothing you do to pay down your credit card balances will help if you are adding more charges to the card each month than you pay off. Take your credit cards out of your wallet and commit to use only debit cards, checks and cash for purchases. If you cannot afford something right now, don’t buy it.

    Lower Interest Rates

    • Call each of your credit card companies and ask for a lower interest rate. Getting a lower rate causes more of your monthly payment to go toward actually paying down your balance instead of paying finance charges. Often companies will lower your rate by at least a percent or two if you ask, especially if you mention you’re considering transferring the balance to a card with a lower rate.

    Automate Minimum Payments

    • Late fees cost you money that you could be using to reduce your debt. To avoid getting hit with fees, set up automatic minimum payments from your checking account to each of your credit cards each month. This also saves you time because you don’t have to make each of your payments individually.

    Trim Your Spending

    • You will reduce your credit card balances faster if you pay more than the minimum each month. To do this, cut your spending in other areas of your budget. Choose a luxury item and commit to give it up and use all of that money for paying off debt. Options include unnecessary clothing purchases, lattes, eating out at restaurants, premium cable, alcohol, books, movies or going to live entertainment events.

    Make Extra Payments

    • Every month, make an extra payment on the credit card with the highest interest rate. The larger the extra payment, the faster you will pay off that credit card. Applying the payment to the card with the highest interest rate maximizes your efforts because you are reducing the amount of interest you pay each month.

    Use Windfalls

    • When you get a windfall, such as a bonus at work, tax refund or cash gift, apply that as an extra payment on your credit card. You probably weren’t expecting the money anyway, so you aren’t really losing anything. If you can’t bear to part with it, keep a small percentage, maybe 10 percent, and use it to buy yourself something that will keep you motivated.

    Track Your Progress

    • Help yourself see what you have accomplished by keeping track of your dwindling balances on the credit cards. Make a log and list your total amount of remaining debt each month or each quarter, depending on how frequently you need to see progress. This can help motivate you to continue.

    Race a Friend

    • Trimming your budget and paying money you don’t have to on your credit cards is a lot more fun when you do it with a friend. If you are competitive-minded, make it a game to see who can put more of his income toward paying off debt or who can get out of debt first. Check in regularly to report progress and maybe share some of the best strategies you have found.

      Do what I do… pay cash!

      By: Kristen May – eHow Contributor

The Top 10 Reasons To Hire A Residential Property Management Company

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Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many Owners, the logical solution is to hire a Residential Property Management company to oversee their rental property. But is this the right decision for you? Here are the top 10 reasons to consider why you should hire a residential property management company and how the benefits far outweigh the costs.

1) Rent Collection: A professional residential property management company (“PM’s”) have systems and strategies to improve rent collection and on-time rent payments. This allows you to ensure swift and consistent rent collection. Quick and consistent rent collection is absolutely critical in this real estate market where good cash flow can mean the difference between success and failure as a real estate investor.

2) Local Knowledge of Rental Rates: PM’s have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow.

3) Tenant Screening: A PM requires a detailed written application from each adult with photo identification. Additionally, PM’s will run criminal, social security and public notice (bankruptcy or judgments) searches to determine if the application is accurate. PM’s will also call past and present employers, landlords and other references. PM’s have set requirements and standards for accepting or declining an applicant and thereby ensuring you comply with fair housing rules and other local and state regulations.

4) Marketing Expertise: PM’s have years of experience in how to best market your properties so they are rented in the quickest time possible. PM’s use both offline and online marketing to maximize your properties’ exposure and find qualified tenants quicker. Most PM’s utilizes 10, 20 or even 30 different techniques to rent a property quickly which reduces your carrying cost of a vacant property.

5) Property Law and Regulations: PM’s have extensive and up-to-date knowledge of property laws and regulations and will assist you in making sure you are in compliance with your local, state and federal rules and regulations. These rules and regulations include complying with fair housing regulations, the Americans with Disabilities Act and other applicable local, state and federal laws. Avoiding one law suit will more than pay for any PM’s fees many times over.

6) Tested and Reliable Professionals: residential property management company’s will already have vetted numerous vendors, suppliers and contractors to make sure they provided good quality work at reasonable prices. Failure to properly vet these professionals can be a costly mistake. Many Owners overlook this function because they do not know how to do it or because it is a time consuming and laborious process.

7) Inspection Reports: PM’s perform property inspections before, during and after a tenancy. Additionally, most PM’s will perform routine property inspections at least every 180 days. Your PM should be responsible for preparing frequent written inspection reports for each of your properties. Faults in your property that are found quickly can be resolved before they become expensive items of disrepair.

8) Financial Records and Security Deposit Escrows: PM’s will provide detailed income and expenses reports as well as cash statements every month saving you the bookkeeping headache. Additionally, PM’s will also manage your security deposit escrow funds and make sure you are in compliance with local and state regulations. PM’s will provide end-of-year tax reports for your accountant or financial advisor.

9) Emergency Calls and Shield You From Tenants: A residential property management company will shield you from emergency maintenance calls and tenant headaches. Imagine never having to deal with late night “my toilet is overflowing” call.

10) Low Costs: A PM should only be charging around 6% to 10% of the monthly rent collected. Assuming a monthly rental rate of $1200 per month that is a fee of $72 to $120 per month. This is less than $4 per day! Can you possible do all these things for less than $4 per day?

11) Bonus Reason! FREE TIME: A good residential property management company will free up your time for doing deals that make money. I mean serious money as opposed to dealing with non-money producing activities like tenant and property management.

by: Mike Lautensack