Simple Property Investment Tips For You

Nowadays, there are lots of investments individuals can choose from. These investments can help individuals improve their lifestyle and profits. Therefore, it is important for individuals to properly choose their investment. This is needed since choosing the wrong investment may lead to serious financial problems that may also affect your future. Luckily, one of the best options is to invest in properties.Real estate experts state that property investment is really profitable. This is possible since investors can opt for different kinds of platforms, which can generate substantial finances. In addition, individuals can also opt for different types of properties that can cater to your needs. However, in order obtain the profits and benefits you need, there are certain factors you need to deal with. Listed below are simple property investment tips you need to know.PropertiesThere are lots of factors when choosing properties. These factors are essential to help you find the ideal property that can accommodate your needs. Some of the most common properties you can choose are residential or commercial properties. These two options can provide you the benefits you need. However, you need to carefully choose which property can cater to your needs.Property featuresAfter choosing the kind of property you need to invest in, you need to determine the features of the property. This is important since these features can help you obtain better finances. For one, size is important when choosing. Large properties tend to provide better profits due to its size. Location is another factor when choosing. Of course, properties situated in good locations are more expensive. As a property owner, you can take this opportunity in your advantage.TaxesSome individuals may think that property investment is all about profits. Little do they know, individuals also need to pay taxes. With this said, you need to be knowledgeable about your taxes. By knowing these taxes, you can properly maintain your profits. On the other hand, property owners can also benefit from these taxes since expenses like interests in your loan are tax deductible.Property conditionLastly, you also need to know the condition of the property. This is important in order for you to attract renters or buyers. In this way, you can easily obtain the profits you need. So, when it comes to property condition, you can opt for the services of an inspector. These experts can help you check house details and find areas where renovations or repairs must be done. Inspectors can also help you ensure that your properties are safe and secured.By knowing these simple tips, investors can sustain substantial profits that can help them improve their lifestyle and future. Click here for more.

New Jersey’s Tax Exempt Property

BRIEF HISTORYGenerally, prior to 1900 New Jersey local tax assessors seldom entered a complete list of tax exempt property located within their municipality on their tax rolls. Why should they, nobody would ever think about levying a property tax on governmental, educational, church or other property used for charitable purposes. It made little sense to those early property tax assessors to spend the resources to find, list and value such tax exempt property. Why, taxing government and other tax exempt property owners that served fundamentally public rather than private interests would be just taking publics money from one pocket and putting it in the other pocket, right?Tax exemption cases brought before the New Jersey Courts after 1900 show many questionable property tax exemption claims were filed by not for profit entities. Assessors found that tax exempt property owners organized for charitable and religious purposes leased their tax exempt property rights to other for profit businesses. At the same time other educational institutions went way beyond the charges set forth in their charter’s provisions by including under their tax exemption umbrella such questionable property uses as polo fields for the use of their students and other private polo teams. With increasing complaints about the abuses of tax exempt claims some local tax assessors began to assess certain questionable educational, charitable and church property owners for property that was not being used strictly for their chartered tax exempt purposes.Of course, these tax exempt property owners complained to their legislators in Trenton about the wrongs caused them by the local property tax assessor. Their government representatives in Trenton then started to provide some standards in the property tax law for the tax assessors to follow. So, for different uses of exempt property, presumably based on the worthiness to society of a particular property’s use, the law specified different standards. School buildings for example had to be actually used for their intended purpose, while buildings for the work of churches had to be actually and exclusively used for religious purposes, etc. Then County Boards of Taxation and the State Courts had to begin settling disputes over what those terms meant in actual application.Today, the property tax exemption battle continues. Should your church be able to build a large building to lease to a For Profit Day Care Center and with the rent money pay off the building’s mortgage? Does a private school need a golf course for golfers who are not students when school is out so as to defray the expense of the golf course? These are the questions that local tax assessors, the courts and the government in Trenton struggles with daily.GOLD MINE OR MINE FIELDPrior to the Cahill Tax Policy Commission in 1973 other Tax Commissions created by the Legislature had looked solely into the legal status of tax exempt property in New Jersey and took extensive testimony concerning perceived tax exempt property abuses. Nevertheless, little could be done legislatively at that time because there was no Statewide tabulation of Exempt Property values in New Jersey and therefore the fiscal tax impact locally of changes in the law could not be weighed by the State Government decision makers.To remedy that problem the Division of Taxation in 1971, at the request of the Cahill Tax Policy Commission took on the job of collecting over 100,000 exempt properties listed by Local Tax Assessors on their local Tax Exempt Lists. The submission of Governor Cahill’s Tax Policy Report to the legislature was delayed so that the Exempt Property Study could be completed because it was thought that such a list could contain the pot of gold needed to avert major new tax increases to pay for property tax relief. The study was finished and its results were reported in the ensuing Tax Policy Commission Report with recommendations that in large did not meet the political and social needs of the day for a new source of revenue for property tax relief.However, while no new revenue source for property tax relief was found because of the Exempt Property Study, the large concentrations of exempt property found in certain cities and towns lead to the adoption of a State Aid Program called the PILOT Program which stood for “payments in lieu of taxes.” In essence, the State made payments to municipalities at the effective municipal purpose tax rate for certain properties owned by the State. Those Sate Aid payments over the years were seldom fully funded according to the formula set forth in the law because the program had its pay out level reduced by a fixed percentage for many State Budget years. Then the PILOT program was incorporated into the COMPTRA State aid program which in effect locked up both the property values used to calculate its funding along with the local effective municipal purposes tax rates used in the formula at a static level. That COMPTRA program consolidated more than a dozen State aid programs along with the PILOT program into one State Budget line item.In 1985 the New Jersey Tax Assessment Study Commission looked into the Tax Exempt Property problem and determined that while exempt property owners paid a “ready and available fee” to their local water utility to use water up “on demand” and be billed for its usage those same exempt property owners did not pay their municipal governments for their public work departments or police departments to have those public servants and their equipment “ready and available” to meet the needs of the exempt property owners when required.The Commission made estimates as to the amount of revenue that could be raised Statewide if such taxing authority was given to municipal governments by the Sate and recommended that the Legislature adopt such a law. Of course the Legislature acted swiftly to draft a legislative resolution stating that the Legislature had no knowledge of and in no way supported such a user fee on churches and other not for profit charitable and educational institutions.LESSONS LEARNED AND THE FUTUREEncourage local tax assessors to remain vigilant in granting tax exemptions to only those property owners who meet the letter of the law. Do not attempt to impose user fees on tax exempt property during sunlight hours in Trenton. Partisan Legislative staff should remind their legislators that the clergy can speak from the pulpit on Sunday about the foolish and wrong headed user fee proposals of legislators who suggest imposing user fees on churches and the November elections falls on a Tuesday only two short days from the Sunday sermon.If history is any prediction of the future then New Jersey may see more State owned properties like the Garden State Art Center have its name leased out for a profit. Perhaps one day instead of the Atlantic City Expressway New Jersey will have the Trump Expressway or the Mack Truck Turnpike. It is even possible that one day New Jersey will sell its Sate House to a large corporation to raise needed revenues and then rent it back. Would that require more friendly Sate treatment of the corporate community, else eviction could ensue? Perhaps it really comes down to the public being vigilant watch dogs. Why not require the Division of Taxation to post on its web page a listing of Tax Exempt Property, by municipality, by ownership and by purpose? Property taxation is a battle, and the tax assessors in New Jersey need the support of the public to enforce the letter of the law.A New Jersey Governor one day may sign a law permitting the sale, lease, or granting of naming rights on State Owned Property to raise money for some worthwhile State purpose. Such revenue could be used to pay off State Debt so as to free up cash for property tax relief. The payment streams from such activities could become a new source of annual State revenue. Once the State government adopted this new funding mechanism my guess is that the local municipal and county governments would follow suit soon thereafter. If State and Local governments keep doing the same fiscal things over and over and hoping to find new sources of revenue they will never be able to fully serve their citizens.I also think it would be all right for the State to sell certain State owned property, so long as that sale did not jeopardize the future economic prosperity of the State or threaten the future safety of its people. For example, the sale of the New Jersey Turnpike or Garden State Parkway would leave the business and people in New Jersey who depend on those vital arteries at the mercy of a profit driven corporation. However, the sale and lease back of a State warehouse would free up cash to pay off State debt that is eating into the State’s ability to provide vital services and provide property tax relief. The State might even sell a State property and use part of the proceeds to invest in other property that holds the potential to increase substantially in value in the future. My point is that State asset and debt management needs a higher viability than it now receives.

Advanced Thinking Concepts for Investing in a Property Management Firm in Uganda

As the Ugandan economy continues developing, the property market will grow. Many of the property sector investors however will probably not have time to manage the properties themselves on a day to day basis. They will increasingly rely on property management firms.Before considering property management in Uganda as an investment option, the investor needs to however be aware of the following:THE CONS1. Legal hurdles. You should be aware that in Uganda, owing to the poor land tenure system, combined with administrative inefficiencies and corruption, property purchase and construction is often fraught with legal difficulties. It is not uncommon for individuals to obtain illegal planning permits for construction of properties in say gazetted zones like wetlands and forest reserves. Subsequently rectifying this irregularity has often resulted in long drawn out legal processes and the owner and thus the property manager often lose revenues during the non occupancy of the disputed property.2. Reputation.Property management firms like any other businesses need to exhibit a high degree of integrity for potential clients to handover the properties. In Uganda there have been some high-profile court cases involving property managers, including one of a leading property management firm whose managing director conned a potential purchaser of advance monies paid. There was a significant reputation loss. If you are considering investing in this sector, you should therefore ensure you maintain the high standards of professional ethics such as separating client and office monies as well as maintaining good accounting records, otherwise your reputation can easily be dented.3. The property market bubble.Whilst the global credit crisis continues depressing property values in places such as the USA and the UK, In Uganda this is not particularly being felt for a myriad of reasons. In the commercial sector, malls and shopping centres continue to spring up in the capital city Kampala and its suburbs to cater for the growing middle class and increasing population as a result of rural- urban migration which is currently estimated at 3%-5% per annum.In the residential sector owing to a general shortage of housing there is always demand for property and as such the property values continue to rise. The shortage of housing is primarily because just like many cities across sub Saharan Africa, rural-urban migration to Kampala has resulted in significant population growth not matched by construction and thus causing a shortage of housing, particularly for the low and middle level income earners.The main risk of the property bubble in Uganda would arise from political instability which would lead to collapse of the sector.4. CompetitionThe competition for property management in this sector is as follows:At the top end of the market are international property management firm affiliates like Knight Frank. In addition there are ISO certified companies like Amalgamated Property Consultants (APS) as well as large and reputable property management companies such as Crane Management services which is under the Ruparelia Group of companies.At the lower end of the market are property brokers who also double as property managers for their clients. These typically cater for low-income earners’ housing.In my model, I advocate that the property management investor will need to develop their niche as follows:1) A firm that is an affiliate or franchise holder of an international property management firm. In Uganda, as far as I know, international property management firms like CBRE and Colliers have no local representation except for Knight Frank. There is therefore an opportunity for the investor to ensure that their firm gets affiliation to these international firms. This will give them instant brand recognition and the perceived quality and reputation already associated with the international firms. In addition they will benefit from the referrals if clients of the international firm seek a local representative in Uganda. I can expect that this affiliation has contributed to the success of Knight Frank Uganda.2) A firm that has some brokers on its payroll. Brokers in Uganda tend to act independent of any firm, are semi illiterate and lack sufficient working capital to deal with potential clients.If the firm therefore guarantees them a daily allowance say of shs. 10,000 to cater for meals, transport and communication for their activities, they are likely to refer future business to the firm, particularly if they are unable to handle it themselves.THE PROSExcellent return on capital In my model I expect that the investment will be returned in about 6 months. The reason for this is manifold:a) The property manager’s advertising will emphasise property management as their core business. This is such that the firm can develop inside knowledge of the sector as well as establish itself as a reputable leader in the sector. When they have developed a good reputation, clients can then entrust them with property sales, which tend to be more lucrative than property management.The property management side is therefore in business terms called the “loss leader”.b) A significant part of the marketing budget will go to the brokers rather than traditional avenues of marketing like TV and newspaper advertisements. This is because the Ugandan real estate sector is highly informal and as such a significant portion of the illiterate/semi illiterate but wealthy persons will usually revert to the brokers who just like them are often illiterate/semi illiterate. It therefore becomes critical to have these brokers as a linkage to such clientele.In my model, I expect returns will be as below:Capital Investment(A): Shs 35, 149, 155Profit per year (B): Shs. 58,803,380Return on Investment/Capital (years to get capital back) (A/B): 0.6 yearsFINAL WORDThe basics you must get right before investing:1. Property management software. You must invest in good software to provide you with real-time client accounts and reporting. This will give the client the assurance as to your integrity. I cannot recommend a particular software but a Google search should yield one.2. Maintain a good contact data base. Property management requires liaison with several bodies including city council authorities, land authorities, utility suppliers, repairs and maintenance personnel, lawyers and brokers. I expect that a good property management software system will have a robust Database Management System at its heart. I will reiterate, include a good lawyer and accountant on this contact database.3. Become an affiliate of an international property management firm. If you cannot afford one with an international firm such as CBRE or Colliers then go for a locally reputable firm like APS.