Don't Ignore Debt Collectors

Dealing with debt collectors is one of the most unpleasant aspects of being in financial difficulties. It's bad enough that you're having trouble making ends meet, trying to make it to the end of the month before your money runs out. That all by itself is one of the most stressful situations a person can go through, and it's ten times worse if you also have a family that's depending on you to take care of them. And in today's economy, there's the added stress of always wondering if you're going to be laid off in the coming months, and what you'll do if that happens. Add bill collectors calling you to this mix, and it's a truly desperate situation.

Dealing with debt collectors, however, is a fact of life that comes with being in debt. And as much as people despise them, these people are simply trying to make a living and feed their families just like the rest of us. They may seem like they're your personal enemies, but they're not. Don't take their collection efforts personally. And whatever you do, don't make the mistake millions of other have made, and simply bury your head in the sand and refuse to deal with the problem. That will only make the problem worse. Here are some other tips.

If they're calling you at work, tell them to stop. By law they have to, once you request it. Otherwise, as much as possible, try to be upfront with them, and try to work out some sort of reduced payment plan. They know you likely don't have the money to pay them in full, or you would've already. Do not write them a check that is going to bounce, as that will only multiply your troubles. Do not allow them to electronically debit your bank account; that's never a good idea. And use your best negotiation skills to work something out. Always remember, though - when dealing with debt collectors, the main thing is not to ignore them. You can wind up with a court judgment against you that's difficult to remove.

Effective Ways To Deal With Debt Collectors

When it comes to stressful experiences, very few are as nerve-wracking as being contacted by a debt collector. Debt collectors often pursue debts by calling, writing letters, and sometimes by making door step visits. With such intense levels of contact, many people report feeling as though their personal space has been violated, and often complain of high stress levels.

Your Legal Responsibilities To Lenders

Each time you borrow money, you enter into a legally binding agreement. The agreement states that you will repay what you borrowed, plus any interest stated in your contract. In the instance that you cannot meet your monthly repayments, it is always better to negotiate with your lenders rather than ignoring them. Contact them to let them know you are struggling, and ask to make a lower payment until your circumstances change. As it is in their best interest to get their money back, the majority will agree.

Your Rights When A Debt Collector Approaches You

If you cannot meet your monthly repayments and do not inform your lenders that you are struggling, they will assume that you have no intention of meeting your financial responsibilities with them. When this happens, they will initially make several attempts to contact you. If their attempts to contact you are ignored, they are legally entitled to pass your debt to a collections agency. When you are dealing with collectors, they are obligated to conduct their behavior in accordance with the Fair Debt Collection Practices Act. If the debt collectors contacting you do not behave according to the guidelines set out in this act, you can report them to a financial ombudsmen.

Debt Collectors' Legal Powers

It is important to distinguish between debt collectors and bailiffs, and know the difference between their legal powers. Debt collectors can only enter your home when you invite them in, and even then they cannot take your goods without your consent. In contrast, bailiffs can. They must not call you too late at night or early in the morning. They cannot contact you at work, and they should not inform others of your debt - such as family members. A debt collector can only visit you once you have given them permission to do so.

How To Deal With Nasty Debt Collectors

Occasionally, collectors will not act according to the Fair Debt Collection Practices Act. When this happens, you can make a complaint directly to their company. Sometimes it is the case that it is a rogue collector, rather than a company behaving in an untoward way. If complaining to the company does not change their approach, you can contact your local trading standards department. As a last resort, you can inform the financial ombudsmen of their behavior. Make sure you use this as a last resort, as they only deal with complaints that have been approached in the manner outline above.

Negotiating With Collectors

If you find that negotiating with collectors is too stressful, you can use a debt management company instead. For a one off and small monthly fee, debt management companies will negotiate with your creditors to secure a lower monthly payment and freeze interest.

Ultimately, the best way to deal with your collectors is to pay off the debts you owe. By ignoring the problem you will make it worse, and any attempt to repay and negotiate will always make it better.

Timing The Market

So you are getting ready to buy your next piece of real estate but you are not quite ready to pull the trigger. You already have your financials ready and you have a loan officer and Realtor on call but you are just not there yet.

The market is not right. Prices have not bottomed out in your view and this economy is in such terrible shape that the Fed has to lower interest rates yet again. So you wait until the perfect opportunity; you are timing the market.

Or so you think. Exactly, what are you timing? Are you timing the bottom of real estate valuations and if so, how do you do that? And are you waiting for interest rates to fall to their absolute lowest levels and if so, again, how do you do that?

You can track real estate prices by scanning local real estate data. You can have a Realtor provide you with statistics such as days-on-market, price per square foot and median home prices. Perhaps you have seen that homes are still taking a bit longer to sell than a year ago. And home prices are lower than they were. A bit.

But the data you are reviewing is old. It is historical. If you are of the opinion that you are waiting for another two or three percent drop in price then are you not concerned about prices going up as well? If you guess wrong, you will qualify for less with higher rates.

And what about rates? Sure, rates are at historic levels (again) but how much further can they drop? Two percent? One? What if rates decide to turn around on a dime? And they do, by the way. What if rates start to rise and real estate begins to rebound, what do you do?

In order to perfectly time a market you need to have a property in mind and a loan application approved, otherwise, the market is moving while you're looking for something to buy and rates are rising, damaging your own affordability index.

If you are wondering whether or not to take advantage of the current market, or not, consider this: assume whichever decision you made is the wrong one.

Which way would you rather be wrong? Taking advantage of today's market with low rates and affordable real estate, or guessing wrong and missing out on the deal of a lifetime?

Why You Need to Think About Selling Investment Property, Long Before You Buy Investment Property

Property Investment can be a very good way to secure an income for your retirement. Stories abound of people mortgaging their homes, taking out investment loans and buying investment property that has then doubled or trebled in price. This is not just a dream, it has and still does happen. However the other stories you rarely hear about are the ones where the property didn't increase in value, or really bad tenants made keeping the property unviable or another unrelated issued occurred that necessitated the selling of the property. These are all events than can and do occur.

That is not to say that investing in property is not a good option. It can be a very good option. But like everything else, it is what, when, how and where you buy, as well as what, when and how you sell that makes the difference.

One of the Gabor sisters, when asked her occupation famously replied

"I am a housekeeper darling! Every time I get divorced I keep the house." Said in jest, but not a bad sentiment nonetheless.

You see whilst you will hear many experts providing advice on what to buy and when to buy it, it is not always buying the property that makes you the money. It is when you sell it. And picking the right time to sell, the right selling strategy as well as the right agent or broker, is also key to making a profit.

All real estate should be looked upon as an investment, even your family home. Because although you will probably never entertain the thought of selling the family home, personal circumstances change and at the end of the day, we all generally have our price. I love my home, and it would take well above market value to get me to sell, but it's not a matter of whether I would, it's a matter of how much it would take. And I confess it would take a lot for me to sell, probably three to four times market value, but I would sell.

One of the keys to making money in property is to control when you buy and control when you sell. Easy you say. Well not so. Controlling when you buy is easy if you have liquid funds up front, however if you are dependent on a mortgage then you are at the mercy of the lending institutions, who will determine what they will loan and when they will loan.

Having said that even if you are dependent on a mortgage you still have reasonable control over when you buy. The other side of the coin is ensuring you have control over when you sell.

There are many reasons to ensure you control when you sell. Some governments have requirements for taxation on capital gains, and there can be varying taxation requirements of where you want to put the profit. However the most critical reason to determine when you sell is the state of the market.

Whilst there are many other indicators of when you should sell, this article is more about ensuring that you have structured your affairs so you can control when you sell. And that means either having a positively geared property, i.e. a property where the rent covers the mortgage and other out-goings, or having sufficient liquid funds or investment income to cover any shortfalls. This is about ensuring that you have the financial capacity to ride the bad times and afford to wait until the market turns for the better, to sell.

In short when buying investment property one of the considerations you must make is whether you want to be able to control when you sell the property. If you do, you will need to ensure you structure your affairs to ensure you have sufficient liquid funds to enable you to determine when you want to realise your investment.

Three Ways to Get Great Cashflow in Property Investment

People choose to invest in property in order to build a portfolio of cashflow that can be used as a pension or that can replace their current income. This gives them a fall back plan in an economic time that seems pretty uncertain. I personally consider this to be a great idea. Property is unlikely ever to reach a value of zero as it is a required part of daily living - having shelter. If you are buying for investment purposes, then property, in my opinion, cannot be beaten for great return.

Here are three ways to get great cashflow.

• Single residential lets

This is the most common strategy when considering property investment. Investors buy a property at a discounted price and then rent it out to a single family. The rent then covers the mortgage and more, giving them a profit. It is the least time-intensive method. It is also the least lucrative in the short term but, of course, you are in this for the long term, aren't you? If you have bought at the right price, in the long term you will not only have positive cashflow but you will also have capital gains.

To maximize the cash flow in this strategy, ensure the purchase price is appropriate for the rent that can be achieved on the property

• Multi-lets

Split a house into rooms or self contained units (flats) and rent them out on an individual basis. This is a great strategy for cash-flow but may involve slightly more management than the single let option. Of course, you can always leverage the experience of a local letting agent. This will further minimize the time you need to spend on the property.

In this strategy, a yield of 12% and above is usually easily obtained as long as the investor again has been careful about the purchase price and money spent on updating the property.

• Flipping Property or Buy-To-Sell

Another viable cash-flow strategy though most think of it as capital gains. Some investors make a steady income without holding a single property. You can sell to investors, estate agents, owner-occupiers, or put it in an auction. All you need is property at a great price (Hint - there is a lot around!)

These are 3 cash - flow strategies to consider.

In order to further improve your understanding of cashflow and the various methods available to maximise it in property, consider playing the cashflow game designed by Mr Kiyosaki, author of Rich Dad, Poor Dad. It is pretty surprising what playing a game like that can do for you.

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Unemployment - How Will It Affect The Real Estate Market?

It's easy to see how and why unemployment levels have an effect on the housing market and other sectors of the economy. To state the obvious, the people without an income and are not economically independent won't have the money available to buy products and meet monthly bill payments. Those without the available funds are likely to lose their house or not be able to purchase a house in the first place. This adds unoccupied homes to the housing inventory, which will contribute toward a reduction in house prices.

Despite numerous government projects to help stimulate the economy by helping home owners being instigated, a lender is extremely unlikely to negotiate on any loan repayments if the debtor cannot demonstrate how they could afford to pay in the future. This means that foreclosure is extremely likely and a high number of foreclosures are not at all good for the market.

Another, less direct way in which unemployment could have a negative impact on the housing market is through the effect that the unemployed have on the economy. The people without an income have less or no disposable cash to spend, which means that they purchase less from shops and other outlets. This in turn decreases the revenue that's taken by commerce which could result in redundancies or even business closure. This in turn means that there's even less money available on the market for things such as home purchase.

On a more localized level, increased crime rates are witnessed in a certain region having high unemployment levels. Any area with high crime rates is less attractive to prospective buyers and therefore the price of the housing is adjusted downwards to make amends for this lower demand.

Even the people who are employed might not be confident about their future in an economy that is seeing rising unemployment figures. Due to this they might choose to wait until a bad economy stabilizes and improves before making any massive purchases, houses included. Another factor could be that in a negative economy individuals expect house prices to decrease, and thus choose to wait until the market levels out so that they can get the best available price.

Those who do have jobs and a disposable income are more likely to maintain and invest in their houses. Home improvements like re-decorating and building extensions would always have a positive impact on the desirability of a home and nearly always push the price up relative to its location. With fewer individuals making such home improvements, or probably even seeing their houses fall into disrepair because of shortage of funds the overall attractiveness of homes, and therefore the amount that a buyer would be ready to pay for them would drop.

With unemployment levels so closely linked with the housing market, it's usually one thing that is looked at when economists try to forecast housing prospects, and a factor that individuals usually take into consideration before deciding on whether or not to go on with a purchase.