January 14, 2017, 11:43 am

6 Traps to Avoid For First-Time Property Investors

by: The Financial Blogger    Category: Properties

Investing in property is an expensive and complex process, so it’s important to get it right first time. As your experience and knowledge grows, so the rules become more like “guidelines” to consider, but for the first-time investor it’s critical to maximise your odds of the success.

What follows are some of the more common mistakes made by inexperienced real estate investors, in order to help your first experience of buying investment property a successful and enjoyable one…

Lack of Research

Knowledge, as they say, is power. Never is this more true than when stumping up for your very first property investment. In general, it’s better to carry out thorough, detailed research on any area, market or property type before you push the button.

Better to miss a few good deals along the way, and approach your very first purchase with confidence, than to find yourself saddled with a dud that is haemorrhaging money and nobody wants to buy off you.

But what should your research entail? Here some smart ideas to get you thinking…

Property Prices – How much are properties in your target area worth? What factors are affecting these prices, what can be done to increase the value of a property and what is the ceiling on rents?

Each area will typically have these market limitations – your goal should be to educate yourself enough that you can spot a well-priced property, you can quickly identify effective ways to increase the properties value, and you have a fair understanding of how much rental income you can expect.

Marrying these elements together ensures you go into a purchase with your eyes open, confident that you’re buying a property that stacks up financially.

Local Audience – Who is renting properties in your target area? Are these young professionals or families, for example? Investigate other rental properties, asking yourself what these potential tenants may like to see in a property.

Also, consider the specific location; will your tenants need access to transport routes, for example, and are those trendy bars down the road a good thing or a bad one?

Predicted Market Conditions – The property market is never static. Areas rise and fall in popularity. New employers and urban regeneration can rapidly turn a less-appealing place into a property hotspot. Just as importantly, interest rates can (and do) go up. While it is impossible to predict the future with any degree of certainty, it does make sense to run a number of models to see how you could be affected.

Investing Close to Home

While investing close to where you live may cut down on the research necessary, it’s important to realize that rental yields can vary massively across the country. In the UK, for example, 2016 saw a 2.2% drop in London property, while investment properties in Manchester offer far better rates averaging 6.2%.

The same pattern plays out in each country, at various scales. Even within a single city the yields can vary dramatically from one area to another. So while doing your research don’t just limit yourself to the area in which you live. Instead, be willing to think “outside the box”, using local agents if necessary, to source and manage properties wherever your returns are likely to be greatest.

Not Considering Interest Rates

Just as each area experiences oscillations in property prices, so too do interest rates. While these rates have been held at a historically low rate for the last few years, this is unlikely to last much longer.

Sadly, as interest rates rise, so too do the costs of variable-rate mortgages, leading to home-owners getting squeezed. It’s all too easy in the good times to stretch yourself too thinly, only to have a nasty surprise as rates rise.

Do your calculations so that you are confident you can weather interest rate changes without discomfort, and hold onto your investment property for the long term.

Failing to Calculate Running Costs

No property is free to run. While your tenants may pay all the utilities, as well as their rent, you also have a range of ongoing costs. From managing agents fees, to routine maintenance and taxes, the income you enjoy is unlikely to be 100% profit. Also, don’t make the mistake of assuming that your rental property will be tenanted every month of the year; tenants move out and it can take some time to find a suitable replacement.

When investigating your first property investment, therefore, don’t just consider your finances in terms of rental income minus mortgage payments. Instead, take a more intelligent and nuanced approach to your business plan, and only take action if you’re confident it still produces reliable, positive cashflow.

Ignoring Inspection Reports

You might think it was foolhardy to buy a property without not only an inspection but also a thorough surveyors report. Yet all the same, every year investors get stung for their lack of research.

Arguably even worse are those who request the necessary surveys, then largely dismiss the findings. All too often, this ends in tears, as the buyer is obliged to fork out large sums of money to return the property to a suitable state.

This is arguably the easiest mistake of all to avoid. Seek the qualified guidance of a professional before purchase, and discuss indepth any potential issues that they have highlighted.

Poor Financing

Since the financial collapse of 2008, banks have slowly tightened up their financing options for landlords. There are now fewer choices than ever before, and it’s all too easy to end up paying far more than you need.

From deposits to interest rates, from paperwork requirements to insurance, each lender is different. So don’t jump at the first offer you get, but instead shop around in order to find the very best deal possible. Sometimes an unprofitable deal can suddenly become financially viable with the right financing. Of course, in contrast, the opposite is also true.


It’s worth re-iterating here that many investors – both large and small – have made considerable sums of money from property. Whether the choice is flipping a property in cosmetic distress, or buying to rent out, everyone from teachers to train drivers are preparing for the future by growing their savings through property.

This article, therefore, is not intended as a source of scare-mongering. It’s also not intended to knock property as an investment vehicle in any way. Instead, the goal here is to better prepare you for selecting the right investment from the outset – and helping you leapfrog over less experienced investors.

With a little time and effort, anyone can become a successful property speculator. All you need is the grit and motivation to get started.

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December 27, 2016, 2:03 pm

Factors To Consider Before Taking A Guarantor Loan

by: The Financial Blogger    Category: Banks and You

As the best alternative to other loan types, a Guarantor loan may help you achieve your financial goals or get out of a financial mess whenever you want. It has been used by many people to achieve either of these purposes.

However, there are some important factors you must consider before you fill out a Guarantor Loan application form. Consider these few factors:

  • Do you have a justifiable reason for taking the loan? While this may seem needless, taking a loan for what you want rather than what you need is a good recipe for a financial mess. If what you want to take the loan for is not a necessity, you should consider other alternatives. For instance, do you want to take the loan for something important like buying a house or for a luxury such as going on vacation?
  • What effect will it have on your monthly expenses? This is a pertinent question of a good importance if the purpose of taking the loan is for frivolities such as taking an expensive cruise around the world. If what is left after paying your monthly bills is insufficient to take care of your monthly repayment, you should consider a better alternative.
  • How will it affect your credit score? The status of your credit score is of significant meaning to you. It will determine your eligibility for future loans or otherwise. That emphasizes the importance of considering the possible impact of taking this loan on your credit score. If you can pay without hitches, your credit score will be impacted positively. If you fail in your repayment for some reasons, your credit score will take the hit.
  • Are there any hidden charges? If there are hidden charges you are unaware of while taking the loan, you may have to spend more than you actually plan for. The extra hidden charge may stretch your budget beyond your ability to keep up with your monthly repayment. If you want to prevent ignorantly taking a loan with hidden charges, carry out a good background check on the lender.
  • Check the APR. Different lenders implement different Annual Percentage Rate. The APR is sometimes considered by some people to be very high. Since you want to take a loan without collateral, you should expect this high APR. Think about it. Can you really afford the high APR without impacting your budget and domestic expenses negatively?
  • How will it affect your relationship with your guarantor? Remember, your guarantor is either a member of your family or a close associate with mutual trust. Think of the possible consequences of failure to make your repayment as at when due on that cherished relationship.

Many people went into taking a Guarantor Loan without enough information to help them make the right decision. Here are the possible questions and useful tips that will play an influential role in deciding whether to go for this type of loan or not. Whatever you decide, work towards prompt payment to save your guarantor the embarrassment of making involuntary loan repayment for you.

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December 19, 2016, 5:00 am

Micro-apartments: the hottest new trend sweeping the German real estate market

by: The Financial Blogger    Category: Properties


Three takeaways:

  • Students, commuters and soaring numbers of singles ensure that insatiable demand for micro-apartments is here to stay
  • Tenants love the low rent, high quality and customizability of micro-apartments
  • With 100% occupancy rates practically guaranteed, micro-apartments are an attractive option for risk-averse investors


Micro-apartment fever has taken Germany by storm.


As the name implies, micro-apartments are small flats – typically between 20 and 30 sq. m each – that contain only the bare essentials, i.e. a sleeping space, a bathroom with a shower and a kitchenette. Most micro-apartment buildings contain self-storage units, laundry facilities and communal lounge areas to accommodate for the lack of space in each flat.

Despite their Spartan conditions, micro-apartments have proven incredibly popular among a certain demographic in Germany – so much so that developers are scrambling to expand the market.

German newspaper Frankfurter Allgemeine Zeitung reported there are presently about 25,000 micro-apartments in the country, and several thousands more are set to be built by the end of 2018. The projects will receive state support: the federal government plans to invest €120M in the micro-apartment market expansion.


Where is the demand for micro-apartments coming from?

The German micro-apartment market targets over 30 million people, including students, singles and tenants whose primary places of residence are far from the big cities they work in.

In recent years, one-bedroom flats have proliferated; between 2011 and 2014, their growth rate was double that of the country’s total apartment growth rate.

The increased popularity of small residential properties is likely attributable to a notable uptick in one-person households over the past several decades.

In 1961, flats occupied by one tenant accounted for 21% of all German households; by 2012, that figure had nearly doubled, reaching 41%. This trend is attributable to a declining birthrate, decreased marriage rates and a general increase in the popularity of living alone.

Though micro-apartments traditionally targeted students and commuters who only live in the city on weeknights, their target demographic has expanded to include singles of all age groups who wish to reduce their monthly rental costs.

Due to their minuscule size, micro-apartments in large German cities rent for an average of €400 per month. For comparison, according to cost of living database Numbeo, a one-bedroom apartment in the center of Berlin typically rents for nearly €700 a month, and the same in Munich typically goes for nearly €1,000.

Because of their relative affordability, micro-apartments are very popular among prospective tenants from all walks of life.

They are particularly appealing among tenants looking to rent on a short- to medium-term basis.

In Germany, tenants traditionally face considerable obstacles when trying to rent for anything less than the long term – such as the obligation to pay a security deposit equal to three months’ rent and heightened credit history scrutiny. To the contrary, micro-apartments tend to cater to short- to medium-term renters.

They also boast a plethora of comforts that are tougher to find in standard apartments. Most are newly built and fully furnished and equipped. What’s more, a range of apps now exist that enable tenants not only to choose their apartments, but to outfit them with a custom selection of dishware, home appliances and furniture – all from their mobile phones.

Micro-apartments also offer creature comforts that hotels and other types of short-term rentals lack, such as private kitchens and bathrooms.

For all of these reasons, demand for micro-apartments is high across Germany, and is only expected to soar further in the future, particularly in such cities as Berlin, Hamburg, Munich and Frankfurt, whose populations are growing at rates of some 1-2% each year.


Why investors and developers love micro-apartments

Micro-apartments aren’t just a smash among tenants; more and more property investors and developers are flocking toward the trend.

More than 50% of Tranio.com’s clients have expressed an interest in

Micro-apartments in major Germany cities sell for as little as €100,000. As German banks offer non-residents up to 50% LTV loans at 2% p.a., foreign investors can pay just €50,000 upfront to cash in on this trend.

Financial institutions are offering such low interest rates for micro-apartments because they have observed their growing popularity and relative liquidity.

Micro-apartment owners also take comfort in relatively high turnover rates. Though rental terms vary broadly, a typical micro-apartment lease runs for a period of three to six months. This minimizes the eviction-related risks typically associated with standard apartments and long-term or perpetual rental contracts.

Furthermore, high-demand and low rental rates all but guarantee 100% occupancy, minimizing the risk that the owner will lose rental income during lengthy vacancy periods.

The short-term nature of micro-apartment lease agreements also empowers owners to increase rent in order to keep up with market demand.

Traditional landlords often face significant limitations in this regard. For instance, local regulations in Berlin prevent landlords with long-term tenants from raising rates by more than 10% above the average rental price in a given district, or in general by my more than 20% over the course of any three-year period.

And for foreign investors, as well as local investors that don’t wish to actively manage their rentals, the German market boasts numerous property management companies that can resolve all tenant-related, administrative, payment, insurance and maintenance issues. Some such companies even offer renovation services.

This option enables owners to reap all the benefits of a rental property without having to take on the grunt work traditionally associated with being a landlord.

Developers also have a great deal to gain from micro-apartments as they can sell them at higher prices per sq. m. than they can larger flats. This boils down to a basic tenet of the property market: the smaller the flat, the higher the price per square meter.

New developments tend to sell out well before they hit the market. Investors purchasing micro-apartments in 2016 will likely have to wait until 2017 or 2018 for their purchases to materialize.

In short, everyone has something to gain on the German micro-apartment market: tenants get inexpensive and quality accommodations, investors can earn solid yields with a low market entry threshold, and developers can earn excellent revenue per square meter.

By: George Kachmazov, managing partner at Tranio.com


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December 13, 2016, 2:46 pm

Satisfy Your Adventurous Side with a Renegade Museum Tour of the de Young

by: The Financial Blogger    Category: Uncategorized

Do you crave adventure? Love storytelling and all the juicy gossip that comes with it? Then a Museum Hack tour of the de Young in San Francisco could be right up your alley. Museum Hack is a museum tour company that hosts the most untraditional and unique museum experiences in the Bay Area.

Museum Hack leads renegade museum tours in museums across the country (New York City, Chicago, San Francisco, and Washington D.C). The tours are far from traditional, as they encourage selfies, games and FUN.  They’re designed to help people who hate museums explore art in a unique way. This is the most fun you’ll have in a museum EVER.

Held in the de Young (aka “San Francisco’s Attic”), Museum Hack digs up salacious gossip about the art and artifacts and keeps you entertained with games and selfies.

Un-Highlights Tour: Because the de Young is home to so much awesome art and architecture (really, the observation tower is to die for), stuff can be overlooked or missed on a museum visit. The Un-Highlights tour is all about discovering unique stories about the art and artists in a fast-paced, group-oriented way.

Badass Bitches Tour: Unfortunately, female artists are seriously underrepresented in museums across the nation. But thanks to Museum Hack, you’ll discover the coolest lady artists and subjects with this feminist-inspired tour. Celebrate women artists with adventure, gossip and leave feeling ready to take on the patriarchy.

Beta Tours: These tours are what Museum Hack uses to test new tour guides and put interesting but new ideas into practice. The most recent Beta Tour at the de Young was a murder mystery where guests had to solve clues to find the killer!

VIP Tour: This premium museum experience for dates or group outings is complete with wine. All the Museum Hack sass is packed into this exciting museum adventure.

Highlights of a Museum Hack Tour in San Francisco

  • JUICY gossip about art that isn’t always highlighted
  • Hangout with people who are full of passion and energy, and LOVE museums
  • Selfies with the art to take home!

If you are looking for an awesome company team building activity in San Francisco, keep Museum Hack in mind! They transform their awesome museum adventures into team building masterpieces that staff actually love.  By injecting ways to promote team bonding and team spirit into their well-loved renegade museum tours, Museum Hack has created the ultimate team building experience.  You can even customize your team building experience to focus on your company values, goals, and history.

Designed for people who don’t like museums, Museum Hack’s tours are perfect for everyone! Tourist or local, art lover or not, get yourself on a Museum Hack tour ASAP if you want some serious fun!


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October 31, 2016, 8:40 am

Stay Protected And Profit In Uncertain Markets With XTrade

by: The Financial Blogger    Category: Investment, Market and Risk

If you’ve ever been to a financial advisor you’ll know that there’s no easy way to build serious wealth through investing. It takes an enormous amount of research and there are no shortcuts. At least, that’s what your conservative financial advisor will tell you.


He’ll say you need to ‘save’ as much as possible and keep your money in a safe place – like the bank – even though doing these things pay you no income. Saving is great, but what if there was another way?


Trading pairs through online brokers such as XTrade offers you a way to invest and grow your wealth yourself.



Strangely enough this way of building wealth still involves banks. No, not saving in the banks, but following what they trade. Banks account for a large chunk of the forex market. If they aren’t working, then the volume of transactions being carried out is greatly reduced. Many traders on XTrade and other leading platforms can attest to seeing a null period when the banks aren’t trading. This can lead to either really static markets or on worse still, erratic markets that can send any trader into a downwards spiral. Banks tend to trade the Forex markets at least once a day for balance sheet reasons and can also trade a number of times throughout the day for speculation reasons. They need a certain amount of each currency to meet the demand of their customers, both personal and business, that will need to buy foreign currency from the bank or exchange their foreign currency for their local currency.



Keep your money safe while trading pairs

Online platforms such as XTrade should have good reviews by their traders. To ensure successful pair trading, you need to choose shares that generally move together but are showing an abnormal deviation in share prices. And to profit from this deviation, you need to get the weighting right.


By this, I simply mean that you want to place the same monetary amount on each trade.

This will protect you and will isolate the move you’re looking for.


This is just one strategy showing how you can use CFDs and single stock futures to profit in the fast paced world of trading.


Maintain a diversified investment interest

Consider going between trading pairs and CFD’s. By selecting a mix of trades that invests in a variety of markets, you are minimizing risk of a single big loss. Online trading platforms such as XTrade offer you a wide variety of markets to trade in – all from one single trading account.


Keep it together

Whilst learning to deal with the common trading psychological pitfalls such as fear and greed are very important, the real key to trading success is learning to be comfortable with uncertainty. No matter how great any trade or setup may look, a trader must learn to accept that every outcome is uncertain. Whilst a trader may have a trading edge that does not mean they will win every trade and learning to deal with the uncertainty of when the winners will come and when the losers will come is the key to profitability overall.


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