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Renting A House? Here Are 7 Things You Should Consider

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Most millennials want to have their apartments, either to be independent, live close to places of work or discover themselves (goals and capabilities) outside the influence of their families.

Before you decide to rent or move into an apartment, be ready to do the work. Do not be desperate. There are a lot of background checks to avoid financial or non-financial issues in the future – and you need to go through that process very carefully.

Do not leave the things that matter to you in the hands of your agent.

Here are some points to consider when trying to rent a house:

Research the Area

You have to explore the area before you move in.

Is it near the market? Is it near the hospital? Can you easily access the bus stop? Does it get flooded during the raining season? Is it safe? Is close enough to work? Is the environment conducive? Is dirt dumped close to the building? etc.

As I said earlier, it is up to you to do all the research you can before signing or making payments. You can speak to few individuals in the neighborhood to get more information on what you need.

You should start your apartment search way early to avoid making decisions in a haste.

It costs more than you think: Understand the Contract

Before accepting to pay any rental fee. You need to go through the contract to understand the exact amount you would pay in your first year of moving in and in subsequent years.

An agent might tell you a rent fee is $10,000 per annum, but then, you find yourself paying more than that in the first year. This might leave you financially down because it wasn’t planned for. Fees might include:

  • House Rent
  • Agency Fee
  • ”Omo onile” fee
  • Security fee
  • Waste fee
  • Legal fee
  • Administration fees etc.

Another thing you have to sort is the rent increase issue. Will there be subsequent increase in the rent? You have to get clarity on this from the agent or landlord.

In the event of justifiable rent increase, you have the right to know early enough to prepare for it.

Check the Price Guide for your Area

This is really important, to avoid being cheated on. Houses in specific areas have similar costs of rent, provided they are offering you the same services.

Beware of Hidden Cost

There may turn out to be some extra hidden costs that the landlords and letting agents will not inform you about. These costs are then passed onto you.

This happens a lot and it is very rampant when renting houses in Lagos. You find yourself having to pay accumulated electricity, water or waste fees that you knew nothing about.

Bills, Bills, Bills 

Renting a house or home comes with a lot of responsibilities. So it is not just about renting the house, but you have to understand how you can sustain yourself through out the rent period. Renting houses comes with a lot of monthly or quarterly bills you have to pay. You have to plan yourself financially to deal with bills events. You might be faced with:

  • Gas bills,
  • Electricity bills,
  • Water bills,
  • Fuel Bills e.g generator
  • Waste bills,
  • Security bills,
  • Miscellaneous bills e.g house repairs, electronics repairs etc.

Shared Apartment: Know your Room/House mates

If you decide to rent an apartment with someone else to save cost, that is absolutely fine. But it could either be a really wonderful experience or a total disaster. Knowing your roommates also entails talking to them before both of you decide to share costs. You must:

  • Talk about how to split the bills
  • Respect each others differences
  • Condone each others bad habits etc.

This article originally appeared on Piggybank.ng. Follow them on Facebook , Twitter , and Instagram

Personal Finance

Securing Credit? Importance Of A Personal Financial Statement

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If you, as an individual, are a salaried employee but now wish to start a business, then your personal financial statement will be the key to avail credit. You may not be entitled for a loan for business, as the eligibility criteria here underlines history and financial position of an existing business. Since, the business in question would be a start-up; you will have to depend on personal finances for the time being, as a means to fund the venture. It is however recommended to keep personal and business finances separate, in the long-run.

When providing monetary support to a new business, it is important for the fund-provider to understand your financial position, which is well-represented by your personal finance statement.

What Does a Personal Financial Statement Contain?

A personal financial statement reflects your financial health. It is a spreadsheet or a document that gives a breakdown of all assets, liabilities, and fiscal details.

  • This document also contains general information such as your name, address, etc.
  • The assets are detailed on the right side, while the liabilities are listed at the left side of the sheet.
  • Liabilities include credit card balance, a personal loan, mortgage, unpaid tax, and more.
  • Assets include amount of balance in bank accounts, trading accounts, retirement account balances, and similar information.
  • If you are married, then you can apply for a joint personal financial statement, which shows details of all debt incurred and owned assets, of both the involved persons.

What is excluded from a Personal Balance Sheet?

There are a few things, which personal financial statements do not show.

  • Business-related liabilities and assets do not surface in a personal financial statement.
  • This spreadsheet also excludes leases and rentals since the rented or leased assets are not under your ownership.
  • A personal balance sheet will exclude personal property such as household goods, furniture, and more, which cannot be sold off to repay a loan.
  • However, property that has significant value such as antiques, jewelry, etc, can be included, if the asset value of these items are verified for appraisal by a certified agency.

Analysis of Net Worth, Possibility of Availing Credit, and More

A personal financial statement thus basically shows your net worth, which is assets minus liabilities, and it holds a great value, when it comes to seeking loans.

  • Net worth translates as what you will have in cash if you sell off all the self-owned assets to repay debts.
  • If the financial statement shows debts as greater than assets, then your net worth will is a negative.
  • For instance, if the sum of your utility and credit bills, auto loan bills, mortgage bills, etc. sum up to be more than the cash of all the investments and real estate property you own, then your net worth is negative.
  • If the net worth shows as negative, you can file for bankruptcy protection to resolve some of the debts. It may prevent creditors from collecting outstanding debt by posing any financial threat or stress on you.
  • However, certain liabilities cannot be discharged, and these include alimony, taxes, child support, and more.

Thus, personal financial statements have a great impact, when it comes to securing funds to run a new business. The document allows banks/NBFCs to assess your financial situation so that they can take an informed credit decision. If your financial health is not up to the expectation, you may be given an option to provide a personal guarantee, pledge an asset, or co-apply for the loan.

How to Fund Your Start-up Business?

You can either apply for a property loan or a soft loan to arrange capital for the venture, or opt for a small cash loan or a short-term loan, until the business attains enough vintage and financial history, to shift to a business loan suited for only business purposes. Thus, by comparing personal financial statements over a time, you can track your financial health and monitor it closely to improve the same. You should keep a check on this document regularly, especially if you intend to avail credit for business needs.

What is a Business Financial Statement?

A financial statement of your company will list liabilities and assets specific to the business alone. It will depict the net worth of the company, and leave out your personal financial details. The financial statements of an organization, include income statements, profit and loss statements, proof of revenue generation over a specific time period, expenses and debts incurred, cash flow statements (indicated the amount of cash the business has), shareholder equity statements (indicate the performance of the company’s stock).

Thus, a personal and business finance statement are different from each other in lot many ways, though they serve the same purpose, which is to denote the financial position of an entity, be it an individual or a company. An organization’s financial statement comes in use when applying for a traditional business loan, which is the best way to finance your start-up initiative, after it attains at least 3-years vintage.

If you wish to secure a loan for your start-up business, do not hesitate to take support of your personal finance for the moment. And to avail monetary support via this route, you need to keep a regular check on your personal financial statement.

This article originally appeared on ValueWalk. Follow ValueWalk on Twitter, Instagram and Facebook.

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Personal Finance

Video: A “How To” On Being Financially Responsible

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Let’s start the new year right by following these steps to being financially responsible and clinching the formula to build wealth.
 
Some of the philosophies presented in this video come from Robert Kiyosaki, the author of Rich Dad Poor Dad Why do they not teach this in schools?

 

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Personal Finance

How To Invest Your Way To Your First $1M (In 8 Steps)

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While being a millionaire most certainly offers a sense of privilege and extravagance, it also provides comfort.

Despite the idea that many of life’s luxuries can cost you your bank (plus a large chunk of your future earnings), achieving comfortable wealth is possible—if you’ve got a solid investment plan you’ll follow religiously.

Here are eight investment strategies to work your way to your first million dollars.

1. Say No To Fees (Of Any Sort!)

Investing comes packed with hidden and some obvious fees – broker fees, distributor fees, exit and entry fees, maintenance fees, and a string of other service-based fees. If you can manage your own investments and money, you can save hundreds of thousands in fees over the lifetime of your investment.

2.  Don’t Try To Time The Market

This can be one of the biggest blunders one can make—simply because it’s impossible, speculative and you’re gambling with your savings. While there are indicators that show market trends, this does not promise that your investment will most certainly move up or down.

3. Think Long Term And Diversify

If you put all your investments into one asset class, your investment will tank the minute the asset class goes into free fall. How do you beat this? Plan and diversify your investment – it could be debt, treasury bills, equity, real estate, startups, business ideas – anything, as long as you think long-term. This can pay off in the long run.

4. Think Like An Owner

When you buy your stocks or make your investments, think and act like it’s yours – you’ll be doubly careful to make the right checks and invest smart. When you invest in solid, robust companies with this in mind, the returns would also be equally strong. Good companies can pay you high dividends that can up your total income.

5. Invest In Yourself First

Be it education or investing for your retirement, put yourself first and then try to budget for the other frills in life.

6. Borrow If You Can, Don’t Buy

With a growing shared economy, you now have plenty to choose from – co-working spaces, ride-hailing and ride-sharing services, shared rentals and accommodation, and the list goes on. Here’s where you can really cut costs – be it while running your business or as a regular looking to channel the savings elsewhere.

7. Set Goals (And Stick To Them)

Make sure you start saving as early as possible and invest it – even a dollar can compound over time. As time goes, set bigger goals and get excited about them! Once bonuses and income increases come your way, bump up your investments – it can soon touch a quarter of a million.

8. Max Out Early

Your 401K can be one of your biggest retirement funds and maxing out your annual contribution by the end of June can be a great way to boost your retirement savings. How does this help? It gives your money an additional six months to compound.

 

 

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