Archive for April, 2010
The Lost Art of Etiquette
Civility and courtesy in business are the proper way to behave and can also have their rewards. We have clients that are polite to our staff, and they leave a good impression. We also have clients that have been rude and arrogant towards our staff. Who do you think is recommended or called if there is a business opportunity?
We deal with a variety of professions including realtors, lawyers, accountants, appraisers, contractors, trades, etc. Our staff and their families, friends and contacts choose to deal with those people that are competent and polite. How many people around the coffee table can you reach by simply respecting the people that you are dealing with and treating them the way that you would like to be treated?
Here are some politeness tips:
#1 – When going into a meeting, turn off your cell phone or ask permission to leave it on.
#2 – Let people exit an elevator before you go in.
#3 – Thank the person that has just served or assisted you.
#4 – Don’t lie (this is a big one).
#5 – Forgive people when they make a mistake.
#6 – Seek a solution to the problem instead finding someone to blame.
#7 – Have a second party look at your e-mail before you press send. (There are many rude/bad e-mails that are out there forever.)
#8 – Be fair and reasonable when dealing with stressful situations. Let others know why the situation is urgent and that they can be part of the solution and not part of the problem. Most of us want to be of help.
#9 – Make the coffee if you empty the pot.
#10 – Use spell check (I have missed this one too often).
Rory Campbell
Reducing Portfolio Investment Risk
Investing in a Mortgage Investment Corporation (MIC) can be a good way of adding mortgages as an asset class to your current investment portfolio. Shares of a professionally managed MIC can offer investors access to diversification in the mortgage market that may not normally be available to them. Diversification is very important when seeking to lower portfolio investment risk.
In the mortgage industry, a client who elects to directly invest in a mortgage is commonly referred to as a ‘Private Investor’. A direct investment in the Canadian mortgage market requires, in addition to your money, your ongoing investment of personal time to administrate and manage the mortgage. For Private Investors it can sometimes be very difficult to find quality lending opportunities. Perhaps even more importantly, it can be difficult to truly understand the risks involved when faced with mortgage underwriting decisions. Understanding investment risk and pricing the risk correctly is key to successful mortgage investment. Sometimes the best decision is the mortgage you don’t invest in.
Another risk facing a Private Mortgage Investor is the loss of interest income during the period when a mortgage is paid out and the funds are sitting in cash waiting to be reinvested. By investing in shares of a MIC, this reinvestment risk can be reduced because your funds are always working.
Great Pacific Mortgage & Investments Ltd. offers investors the choice of three professionally managed Mortgage Investment Corporations which can help to add investment diversification to both large and small portfolios.
Paul Croy
Investing in Real Estate
There are several issues and considerations when investing in real estate.
#1- Residence
Purchasing a home tends to be the largest capital investment most people make. It also tends to be the best investment most people make.
Rents go up but mortgage payments remain constant. So with time, the cost of mortgaging remains constant while rents rise with inflation. (There are interest rate fluctuations both up and down but I am assuming a constant interest rate for this example.)
It may seem a long way off at the beginning, but mortgages do get paid off and any capital appreciation from your own house is non-taxable. Equity in property also provides the ability to access funds for other investment opportunities.
#2- Investment Properties
There are several types of investment properties:
A – Revenue Investment (Residential, Commercial, Industrial revenue properties)
I do not have a pension other than CPP so I need to plan for my retirement by creating an income stream that is indexed so that inflation doesn’t erode my standard of living. Buying a rental property can be an effective method to satisfy this goal.
When looking for revenue property to meet this goal, you need to consider how soon the property’s income will cover all of its expenses including debt servicing, management, maintenance, repairs and of course, the various taxes. This may mean that you will need to cover a shortfall at the beginning, but when you have reached the breakeven level time becomes your ally and the property will start paying you an indexed cash flow.
B – Speculative Investment
This investment is to attract a capital gain by selling a property for a higher price than you paid. This investment is quite popular when the market is increasing or expanding. An example of speculative investment would be buying a piece of land that is not yet developed but is in an area where development is approaching. When development does reach your property then there will be an increase in its value. This type of investment is higher risk than rental property (time is not your ally) but it does not require as much ongoing work and can be very lucrative. This investment is more interested in the market and not in revenue.
There are several investments that are part revenue and part speculative. One example is an underdeveloped property that does not have cash flow to pay all costs but can offset some of the costs.
Housing is something that we all need. It has proven to be a stable and manageable investment that one can control or at least influence. Talk to your realtor, lawyer, accountant, mortgage broker, neighbour etc. Everyone has something to say about real estate and some of them can give you good advice, but remember that it is your choice. Be bold and you should be rewarded.
Rory Campbell
