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Louisville Real Estate | What Is ROI?

July 16, 2010 By Author Leave a Comment

When you invest your money, it’s very important to know where your money is going, and if you’ve made profit from the money that you have put in for a certain enterprise. Knowing your return of investment or ROI is essential in order to know the performance of a certain enterprise or Louisville real estate investment.

So, What Is ROI?
Basically, in terms of business, return means cash stream or income that you receive over a pre-defined period (such as one year, for example) from an investment that you have made. Investment, on the other hand is an amount of money that you put in for a certain purpose – like putting up a business, purchasing a house or hiring an employee. Your investment can either be money that comes directly from you or money that you have loaned out.

The return of investment is used to measure the performance of a certain investment, and can be used to compare various investments to see which among them is performing well. The ROI can be calculated by taking the net income of a certain investment and enterprise, and dividing it with the cost of the investment.

Thus, ROI is simply calculated as ROI = Net Income of Investment/ Cost of Investment, where the net income is the total income from the investment minus the cost of investment. ROI is usually in percentage. So a 50% ROI means that the return of investment is 50% of each dollar of investment. This means that what is returned to you is 50 cents per each dollar that you have invested. To get the percentage, you should multiply the initial answer by 100.

For example, if the net income is $5,000 and the cost of investment is $20,000 then the return of investment is 5000/20,000 or 0.25. To calculate the percentage you multiply 0.25 with 100, which would give you 25%.

How To Read An ROI?
A positive return of investment is always a good sign, since this means that the money you have put in is being returned back. A higher percentage is always better than a lower one since that means that the investment is more profitable. However, if the ROI is negative, then you should think about pushing forward with the business as it is a loss.

Does ROI Only Measure Money?
The ROI is very flexible as it can easily be manipulated. This means that the ROI can be measured by other things aside from money. As long as you can represent these items with money, then you can still calculate the ROI.

What Do You Do With Your ROI?
So, what do you use the ROI for? Basically, you can use the ROI to see if a certain enterprise is profitable. If you have more than one investment, you can use this to compare each one and see what business is doing well or not. This can also be useful in choosing what investment to terminate in case you need to do so.

You may find that a Denver Colorado real estate investment can assure a good ROI. One has to be careful though in the kind of property that they are investing in. You may hire a reputed real estate agent to help you find the best property that will earn you good returns. People in cities like Erie CO often seek professional help when investing in a real estate property.

Filed Under: Financial Management Tagged With: Louisville Real Estate, real estate investment, return of investment

Louisville Real Estate | Low FICO Score: Exactly What's It Gonna Cost Ya?

June 13, 2010 By Author Leave a Comment

Face it: If you have a FICO score below 600, it’s going to have an impact on your bank account. Let’s look at just how much cash is going to bleed through that hole in your credit report, and then we’ll talk about ways to boost your score.

You’re probably aware that there are three credit reporting agencies-Equifax, TransUnion, and Experian. Not all of them report, but all three agencies are valid credit-reporting bureaus respected by creditors.

You can get a free credit report three times a year using the three credit bureaus. Many people make the mistake of consulting all three agencies at once, and then they only have one report for the whole year. It’s important to check your report at intervals so that you always know if your credit is good, and also so that you know your report is correct.

Creditors offer to loan you money to help you buy a Louisville real estate property with strings attached-the interest you have to pay. And the amount of interest they can charge you depends on your credit score. If you’re credit score is 720, you’re sitting pretty. But what if it’s lower-like 600 or below?

If you borrow $150,000 for thirty years with a score of 720, you will have to pay $190,000 in interest. But if your score is 570, that same loan will cost you over $300,000 in interest!

What does that translate to in your monthly expenses? For a thirty-year fixed mortgage with an optimal credit score of 760 or over, you’ll get a lower interest rate. At this writing, that would probably be somewhere around 4.9%; your monthly payment for that $150,000 loan would be $759. For that same loan, with a credit score of 600, your interest would be over 6% and your payment would exceed $910. The difference is $151, multiplied by twelve months per year-and your credit score has cost you almost $2,000!

Visit MyFico.com for a calculator where you look at rates tied to your credit score for mortgages, auto loans, or home equity loans.

Who else looks at your credit report besides creditors? If you’re applying for a new job, the prospective employer will look at your credit report. If you have negative credit, they will consider that you are more likely to steal from the company or be an unreliable employee. If you’re looking for a new apartment, possible landlords will investigate your credit worthiness; they might turn you down based on your past record. Companies that you deal with on a regular basis such as your auto insurance company will offer you rates based on your credit report.

Your credit score goes up when your debt-to-credit line ratio goes down. That means you should owe little money compared to how much credit is offered to you. The best way to improve your credit score is to reduce the balances on your accounts. You should also have a varied mix of secured and unsecured loans. If you pay off a credit card, don’t close your account, because it shows that you have available credit that you aren’t using-good for your score.

If you have a low score and you can’t get any credit, but your parents’ scores are solid, ask them to add you as a user on their credit cards. You’ll benefit from their payment record with a boost to your score.

We hope this information helps you take control of your credit scores. It could be extremely helpful if you are considering buying real estate in Highlands Ranch CO or property in a city like Conifer CO.

Filed Under: Financial Management Tagged With: credit report information, credit score tips, Louisville Real Estate

Louisville Colorado Finance Tips | Your FICO Score: Read it and Weep?

June 11, 2010 By Author Leave a Comment

FICO stands for Fair Isaac Corporation, a company that was established way back in the Fifties to help companies with business management decisions. Mixed in with all its other advice was whether a company should do business based on credit. And through the years, it became best known for its FICO scores, which rate consumers on their credit worthiness-thus advising companies whether or not they should loan you money or sell you goods based on your signature.

In 2009, the company officially changed its name from Fair Isaac to FICO, which is what most people knew it as anyway. The website is Fico.com. Get your FICO score from its offshoot, MyFico.com, for two reasons. First, some agencies have begun reporting their own proprietary scores-Experian uses VantageScore-not the same as your FICO score.

And second, if you visit FreeCreditReport.com, you risk being signed up automatically for a service that charges a monthly fee unless you re-visit the site and opt out!

But wait, you’re asking-why will you pay to see your FICO score when everyone says you’re entitled to your free credit report every year? People have even told you that you can get three free credit reports in a year, as long as you space out your requests among the three credit bureaus! So why do you have to pay?

The free credit report that you get will display your entire credit report, but it will not include your actual FICO score. You must pay either Equifax or TransUnion to see the score that Fair Isaac has come up with for you. (Remember that Experian also provides a credit report, but its score is the VantageScore.)

Your FICO score takes into account several areas:

  • Your payment history. Keep in mind that high score achievers rarely have payments made 120 days or more late. And no matter what your score is, you’ll raise a flag if payments are even 60 days late. High score achievers who did pay late did so more than four years ago.
  • Your amount of debt. High score achievers have a 7% ratio of debt to available credit. That means that even if you are only using 25% of your available credit, you will score average in this category.
  • Length of credit history. High score achievers have credit histories of 19 years or longer.
    Amount of new credit. Prospective creditors like to see you using a mix of credit cards frequently but not abusing them. And most high score achievers hold open accounts that are between six and twelve years old.

What else can affect your FICO score? If you are looking at say, homes in Louisville CO and are shopping around for a loan with multiple vendors checking your credit, your score can drop. Keep in mind that if you make adjustments to your current accounts-for example, if the maker of your auto loan checks your credit to decide whether he can give you an extension-that query is not treated as a new one. And you will not harm your score by checking it yourself. Otherwise, a history of inquiries shows up as part of your credit account for two years, and multiple queries can drop your scores, one point per query.

Besides your FICO score, creditors also look at your length of time at your current job and past jobs, plus how long you’ve lived at your current address, whether you hold a mortgage, your income level, and other assets.

When buying real estate in Frederick CO you must first get your credit scores in order before you can get a loan. This is important because if your scores aren’t looking their best, you may not get the loan. This is also true in other cities like Denver CO just as it is anywhere else.

Filed Under: Financial Management Tagged With: credit report, credit score, Fair Isaac Corporation, Louisville Colorado real estate

Need Extra Money To Buy Real Estate in Louisville CO? Try These Five Tireless Tips!

June 10, 2010 By Author Leave a Comment

You’ve probably noticed signs that the economy is stirring, but these are days when we can all use some extra cash in our pockets. What are the best ways to earn extra money in your spare time?

  1. Pack more money into your paycheck. Review your current deductions, and decide if you can change anything that sends more of your paycheck home with you. For example, if you’ve had a long-standing payroll deduction for a charitable organization through your employer, this is the time to remember that charity begins at home! Eliminate it. If you are declaring zero deductions, maybe it’s time to bump that up a little bit. You’ll take more money home in your paycheck, but you’ll get less money at tax time, so ask your payroll staff to do a dry run so you know what your new net paycheck will be with the changes you’re requesting. Also, many people change their federal withholding but they forget about state withholding, so check that out as well. If you’re buying additional life or disability insurance from your employer-many companies offer them as supplemental benefits with the employee responsible for the entire premium-consider decreasing your benefit amounts, at least for this year.

  2. Take a look at three important insurance expenses-homeowner’s, auto, and private mortgage insurance. If you raise the deductible for the homeowner’s and auto insurances, you will lower your premium. And if you’re getting close to owning twenty percent equity in your home, ask your lender when you can discontinue the PMI. Don’t expect him to send you a notice automatically when you reach that level. While you’re on the subject of insurance, consider eliminating life insurance policies on your children. The chances are good that they will live to adulthood and you won’t need the policies, but that really is a personal decision for you and your spouse.

  3. Suppose you want to do more than fatten your paycheck-you really need to dig your way out of debt or jumpstart your savings for something special like buying a Louisville Colorado real estate property. To paraphrase money guru Dave Ramsey, the only way to earn more money is to go out and work for it. Avoid get-rich-quick schemes. How can you recognize them? Say no thanks to any company that wants you to lay out some cash in advance! If you need more cash right now, there’s nothing like blood, sweat, and tears to earn it. If you don’t have a saleable skill, then just take whatever work you can find-it’s all gravy for now. Know that you won’t have to do it forever; you can do it if you envision a deadline of just three or six months. The validation you’ll feel for making this decision will ultimately make you feel better and more energized, and the extra bucks will add up.

  4. While putting your energy to work for someone else is probably the quickest way to earn extra money, consider the ways you can market yourself. If you’re handy with a camera, photograph your friends’ children and start a portfolio. If you’re great at organizing things, download a project management spreadsheet from an internet resource like Bright Hub or DocStoc and put your energy into wedding planning. If your house is the place that everyone raves over during the holidays, offer decorating assistance. Establish a small business doing errands for the senior citizens who live in your neighborhood seniors’ apartment house-many of them would pay you a small fee to run errands for them, and once you have one customer the word will spread quickly among other building residents. Print up some business cards and brochures on your computer and leave them around, and ask friends to give them out as well.

  5. Clean out your attic and sell your white elephants on eBay. Many home-grown businesses evolve from eBay shipping and handling services. In fact, contact those customers of yours in the seniors’ apartment building, and offer to advertise their gently used stuff as well-for a small fee, of course. Let people know at work you’re ready to photograph and advertise their cast-offs.

Hope some of these tips help you make some extra dollars. You can also use them to make your budget if you are considering buying real estate in Fort Collins Colorado or maybe Lafayette Colorado.

Filed Under: Financial Management Tagged With: making extra money, real estate Louisville Colorado, tips for making extra cash