Fix and Flip: What To FixWritten by Steve Gillman
You've bought a house, a fixer-upper you can make some money on. What improvements and repairs should you make? First of all, you need to know this before you buy, as I explained in another article. Before and after you buy, though, you need to have some simple rules with which to start analyzing possible fixes.Return On Investment A young couple was very disappointed when I told them there house was worth $110,000. "We just put $40,000 into remodeling kitchen!" they told me. I looked at kitchen. It was nice. They had added $10,000 in value to house by spending $40,000. This is a classic example of a bad return on investment. With fixer-uppers, you have do things which give most "bang for buck." Aim for a three-to-one return on improvements. If you're going to resurface driveway for $1000, it better raise value of home by $3,000. Even when you're just guessing, keep this three-to-one formula in your head, if you want to invest safely. How To Fix A Fixer-Upper With things like new curtains, you can't really estimate increase in value. What you can do, though, is group together many small repairs and improvements you are considering, and imagine how house will look when you are done. Then you can estimate whether you will have increased value enough to justify cost. It often is in small details that you'll get best return on investment, so look at these first. A new mailbox, flowers on porch, a raked yard and trimmed trees - $30 total if you do work yourself - can make a big difference in first impression potential buyers have. First impressions are important.
| | Debt and financial optimism in the UK continue.Written by Richard Green
With £1.3 trillion pounds worth of debt in UK, Scotland’s Citizens Advice Bureau ( http://www.cas.org.uk/ ) has welcomed a new Bill to regulate lenders and protect borrowers from creating un-repayable levels of personal debt. Chief executive Kaliani Lyle said: "For years, Citizens Advice Bureaux have been dealing with case after case of ordinary people who have been enticed into unsustainable debt.” "The existing legislation - 1974 Consumer Credit Act - is simply too antiquated to deal with explosion in aggressively marketed credit that has taken place over past decade or so.” The Consumer Credit Act is set up to outlaw “extortionate” interest rates, however it has proved to be ineffective as it doesn’t actually define what is regarded as extortionate. This coincides with an investigation being carried out by banking watchdogs, into suspected mis-selling of personal loans and credit cards at bank branch levels. Following on from BBC’s Real Story programme which revealed banks are offering large staff bonuses to encourage sales of expensive loans, credit cards and other financial products. Staff at Lloyds TSB were shown to have encouraged customers to accept sums of money they could not afford to repay. Which? ( http://www.which.net/ ) said it believed it was time industry had a proper debate over sales incentive structures. The BBC also criticised expensive cost of bank’s payment protection insurance and how credit cards were pushed onto customers. Graeme Millar, of Scottish Consumer Council, said: “Consumers themselves need to act responsibly and ensure they are not asking for money they cannot afford to repay." Tougher codes of practice imposing stricter standards on way products are sold, and use of financial information qualified financial advisers and from comparison web sites like Moneynet ( http://www.moneynet.co.uk ) can help to gain consumers best deals, and reduce risks of mis-selling.
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