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Empty storage unit with opened door. 3d rendering
Self-storage has gained much acclaim as a valuable commercial real estate investment in recent times.  This is partly due to the increasing storage and warehousing needs of individuals and businesses. Let us briefly explain what self-storage means in the world of real estate. Self-storage deals with renting out storage space to individuals or businesses, usually on a short-term basis. The storage facility can uphold household goods and equipment as well as inventory and archived records. If you are looking for a self-storage facility to purchase, it is essential to evaluate its gross potential or the value that it is likely to be worth in the market. Here, we list a few ways to calculate gross potential in a self-storage investment.

Get The Actual Figures

Here, the emphasis will be upon assessing the actual figures; figures relate to payment made for self-storage regarding utilities, maintenance, advertising and the actual revenue generated regarding rent from this real estate property.  Once you have the actual numbers, you can make the necessary calculations. Using estimates will not allow you to calculate gross potential in a self-storage on an accurate and factual basis. Once the various cost heads have been identified and actual figures have been acquired, you can calculate the gross and net profits that may be generated from the self-storage investment. This is one method to calculate gross potential in a self-storage, with help from the property owner. Property owners that fail to disclose such information make valuing a self-storage property a tedious job. However, you can get your hands on the information needed through industry journals and published annual reports of real estate companies.

Determine a Capitalization Rate

To calculate gross potential in a self-storage, identifying the capitalization rate is another significant step. Cap rate is a must in order to estimate a return on investment (ROI) and it may be lower in popular areas and locations where strong-profile tenants are common. For areas that are low in popularity, comprising mostly of older buildings and weak-profiled tenants, a higher cap rate may be fixed in order to cover for maintenance and repair services, as and when required. These factors can help you with deciding a cap rate in any given area; however, since the emphasis has been on actual figures and not forecasted ones, you may inquire a property owner for cap rate prevalent in a given area where the self-storage is located. Cap rate can also be calculated by using the net operating incomes and recent sale prices of comparable properties. The determined rate may then be used to calculate the current market value of the self-storage facility. The value calculation, in this case, is essentially how we can calculate gross potential in a self-storage property.

Now that you have both the operating income and cap rate, the value of the self-storage property may be calculated by putting the figures in the valuation formula. A few of the important aspects to keep in mind comprise of monthly cash flows, value appreciation over time,  tax advantages, tax breaks from depreciation and any and all significant expenses that are usually involved in a business. These expenses span from mortgage interest, insurance, advertising, bookkeeping, and management all the way to repairs and maintenance.

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About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Financial Growth, Plant on pile coins with cityscape background
Businesspersons and entrepreneurs have invested in properties in order to gain profits for a very long time. Properties that entrepreneurs invest in most often are residential plots, shopping malls, theme parks, and entertainment resorts.

In the millennial era, going to the mall is one of the most common activities enjoyed by people worldwide but, alongside, everyone needs a home to live in. Seen from a business perspective, there are many alternatives when investing in a property. The following is an introduction and a slight comparison between investing in small apartments and small strip malls. 

Investing in an Apartment Building

Investing in smaller apartments has many advantages attached to it. Primarily, it is a cheap thing to own as apartments have lower down payment rates and the ongoing costs are low. Smaller apartments, when compared to larger ones, are easy to manage and have a healthier rate as more rent can be derived from each unit.

A property that consists of more than four units requires a commercial loan when financing. Usually, a down payment of 25% is required. Although, if the investor is lucky, they may find various deals in which owners are privately selling a property and they hold onto the mortgage and take smaller down payments. However, a due payment attached to owner financing is due within a time limit of 10 years. Therefore, refinancing is required with a down payment of 25%.

The maintenance costs are another important aspect that must be considered when investing in a small apartment building. Small apartments usually do not require on-site repair employees compared to larger apartments that usually do.

The final things to consider when investing in small apartments are:

  • Decide whether the tenants will be affiliated to Section-8 or whether they will be non-Section
  • The location of the building

Investing in a Small Strip Mall

As long as people have to eat, they will head to the grocery store or the mall with food outlets. Therefore, investing in a small strip mall is still as valuable as ever before. Although a costly investment, the returns and popularity an investor gets is satisfactorily appealing.

The retail plazas that are found locally offer investment perks in the field of commercial property and real estate. There are advantages related to tax, mortar, brick, and land security. Retail stands out because it can possibly deliver both, the building of wealth and passive income, simultaneously. It is recommended that investors collect monthly payments of rent and wait for the value to increase.

Alongside, the latest research and forecasts show that the future is even brighter for the commercial real estate market in the US. For pessimistic investors, it is better to know that local retail properties are often the last things that become damaged or outdated. 

Wheter it is Uber, Airbnb or strategies related to city planning, everything is about local shopping these days. Therefore, it easily foreshadows the ever-increasing performance and returns of these properties.

Which is Better?

Whether you are investing in a small strip mall or a residential property, you need to take into account the amount of money that you are putting in. While investing in a small strip mall, you need to consider that you have to do more work comparatively in order to get sponsors and deal with organizations providing products. However, when investing in an apartment building, you will mostly get a fixed amount of money according to the residential value of that place. No matter what you invest in, make sure that you consider the following things:

  1. The location of the property
  2. The legal paperwork of the property
  3. The average rental value of the area
  4. Maintaining all the financial transactions in bookkeeping

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.


 

Man uses a paper fortune teller to make multiple decisions for his own portfolio, allocating assets and diversifying in a portfolio to minimize risk for optimal profits. Financial investment concept.
The straight path towards financial stability begins with you developing a budget and paying off high-interest debt along with sustaining emergency funds. Even when you set aside money from your monthly paycheck to go into a savings account which is going to earn interest, nevertheless, a piece of the monetary puzzle is still going to be missing. Real money is made when you invest it, however, the complexity can be highly intimidating. The following 6 tips for beginners can help you invest your money correctly and wisely.

1.  Set Specific Goals

If you want to make money in the long term, it is important that you set specific goals for yourself. For beginners, it is important that you think about the bigger picture rather than just making fast cash. For this purpose, it is important that you think about the volatile industries such as the stock market.

2.  Invest in a Financial Advisor

Even with huge resources like Google’s search engine and Amazon’s digital library, you might need extra coaching. Monetary advisors are not simply a superfluous expense. They may be able to help you in differentiating a sound investment option from simply a fad and they can give you personalized advice as well. Financial strategists, which are recommended, are avoiding TV for their stock market advice as most television critics offer only short-term information.

3.  Keep Costs Low

Even when you only have a small amount of money to begin with, there are numerous small investments which can build into a significant payoff. Whenever you are new to the field of investing, you should avoid spending large sums of money, even if it is available to you. When you keep your costs lows, you will have more funds later when you want to invest in a bigger opportunity.

4.  Diversify Your Portfolio

Investment portfolios may include real estate stocks as well. Along with this, mutual funds and retirement accounts are included as well. Every industry has its own beats which actually means that you are supposed to thoroughly investigate the housing markets and stock prices before you actually dip your toe in the water.  

5.  Do In-Depth Research

It is an understatement when we say that knowledge is power, especially when it comes to investments. Nevertheless, the complex financial jargon can sometimes be very overwhelming and complex. Therefore, it is important that you conduct in-depth research before deciding to invest somewhere. This research can make or break your investment, not to mention your bank account. Most of the time, investments lead to loss only because the investor had not really paid attention to completing their research.

6.  Consider Automation

There are numerous types of investments that can be done with automatic contributions. For instance, a 401(k) plan or even an IRA is a great way to investment your money. Low-cost finds are considered to be the best for automatic deposits.

Check out America's Best Bookkeepers


About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Large group of people in the shape of an arrow pointing up symbolizing direction , progress or growth.
Public investment is among the most important factors affecting economy, national progress, and living standards. It is ideally done by the government which includes both the federal state governments and local governments. Resources in the state are allocated to basic infrastructures like building roads, bridges, railway lines, airports, electricity provision to all near and far areas, investments in the health sector, provision of clean water pipelines, waste and garbage disposal units, and other such services.

Public investment is also made into other beneficial and productive investments and investment incentives. Basic and advanced research is supported and steps to minimize environmental hazards are taken publicly. Public investments are made in the education sector. Primary schools and higher education sectors are supported, scholarships are granted both to national and international students for higher studies and for research purposes. Not only is primary schooling and higher studies considered, job training is also given to produce individuals with higher efficiency thus leading to higher productivity.

Private organizations also take part in the provision of these services and physical infrastructure. However, the investments made by the private sector is much lower than by the States. A major reason for this is that the profits (both monetary and intangible) accessed from the public investments capital is not added just to those undertaking investments but also to a broad range of folks and businesses.

Measures for Attracting Public Investment

States and governments can follow the following principles in order to attract public investments both at the national and international level.

  1. Endorse learning about public investment at all levels of government.
  2. Reinforce capacities for public investment.
  3. Assess long-term effects of public investment. Risks of public investments should also be kept in mind. Monitor investments and their impacts that yield positive results as desired.
  4. Activate private sectors to expand sources of funding. It will also strengthen the capacities. Strengthening capacities mean more gains in the long run.
  5. Emphasize the proficiency of public officials and institutions who are designated in public investments sectors.
  6. Attention on consequences and promote wisdom from experiences. For this, there should be a vigilant check and balance on bookkeeping, records, and policies. Experiences in forms of gains, risks, or losses must be documented and evaluated for further strengthening of the system.
  7. Thorough and demanding framework conditions should be kept at all levels of government.
  8. Cultivate a monetary framework adjusted to the goals chased.
  9. Entail thorough and transparent fiscal management at all levels of government. Bookkeeping records must be thoroughly evaluated and followed up.
  10. Encourage clearness and strategically usage of the public procurement at all levels.
  11. Ensure quality and uniformity in controlling systems at all levels of government.
  12. Implement effective tools for co-ordination among national and sub-national levels of government.

Research in Public Investment

This is a very effective tool in finding the role and impact of public investment in long-term gains. There is economic growth, no doubt, but the actual measurement of how much efforts is needed in the public investment that can boost economic growth in a decade can be done through thorough research. Investments in public capital have weighty positive influences on private-sector output. When there is a constant result in a continuous research carried on public investment, it means that public capital suggests an upper rate of return than most systems of private capital.

Foreign Direct Investors

This should be encouraged to promote public investment capital. Investment incentives are given to private actors for investment in the public sector. For this, foreign investors can also be given incentives. It will attract foreign investors to act more in public investment that will eventually improve the economic growth of a nation/country in the long run.

Conclusion

Keeping your business planning, bookkeeping, and research up to date will allow you to compete with foreign investors for public investment on the national level.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Notebook with Toolls and Notes about Audit

What does it mean for a business to be “Audit-Ready”?

  • Financial reports and other reports are prepared
  • Files for audit work papers are prepared
  • Models for unit pricing are developed and reviewed
  • Establishment of  process for risk management and already conducting risk assessment
  • Issues of accounting, audit, and taxation strategies are prepared
  • Provision of values for financial reports
  • Provision of technical opinions for new standards and changes in accounting and financial reporting

AUDIT-READY BOOKKEEPING DEFINED:

Being ready for an audit requires skills and knowledge. A mixture of tax laws, accounting values, understanding of requirements for CRA audit, and an understanding of best categorization for an expense is required for bookkeeping to be audit-ready.

WHY IS IT NECESSARY TO HAVE AUDIT-READYBOOKKEEPING? 

GAAP (Generally Accepted Accounting Principle) is followed in a conventional system of accounting. The major drawback of this system is that it is not audit ready. Businesses are placed into an end turn at audit time. This is actually a crazy approach. CRA has an engraved and dehydrated audit process. Accounting should be done in a suitable mode which is audit ready. We have acknowledged that a restriction of bookkeeping software and simply the training of accountants is not how to have the books ready for an audit.

The most sensible method of bookkeeping is to make it ready for audit.  When bookkeeping reflects the exact figure of tax return which is under stable, justified by an auditor and owner, it shows that each and every step is transparent. A company that is not afraid of audit, because they are always ready for one, is known to be an honest and transparent organization. 

If records are well maintained and organized, then bookkeeping is simplier and is ready for an audit, tax time, and to provide feedback information to it’s owner.

STEPS IN AUDITING

Categorization of expenses:

The key step in audit ready bookkeeping is the categorization of expenses.

  • Direct expenses
  • Capital expenses which have lasting benefits

Organized documentations:

All source documents, slips, deposits, invoices, and records are well organized. Documents of all business dealings and transactions are gathered. This data provides justification to an auditor. All kinds of business events affect a business financially. A bookkeeper knows the relevant information and its financial effect on business transactions. A business is either worse off or better off as the result of its dealings. The bookkeeping procedures identify the financial and business aspect of the relevant information regarding each transaction.

Tracking number:

A tracking or item number is assigned to all financial transactions. This number is critical for an audit as it is used to trace the trail of all transactions.

Financial statements:

Business statements should justify expenses. At times, all expenses are not justifiable.  A few can actually be inappropriate and not allocated properly. These expenses results in loss and huge costs for the business. Auditors make assumptions of expenses and critically evaluate them. All of these steps are critical in maintaining up to date records, preparation, and management of accounting reports, government audits, tax returns, and audit ready bookkeeping.

Poor bookkeeping results in loss of money for the business and it’s owners.

An audit-ready business:

  • Enhances the  compliance of the business with internal revenue service regulations.
  • Enhances the credibility of company on public, investors, and other stockholders.
  • Prevents fraudulent cases and business losses by detecting discrepancies in early stages.
  • Improves accounting processes and internal controls.
  • All above advantages guarantee high-level investments to audit-ready businesses because it declares that it is transparent and safe for investment.
  • Investors know that they will not face losses or fraud in an audit-ready business.

Conclusion:

An audit-ready business attracts investors to make high-level investments because of the guaranteed profits and the minimized chance of loss and risk to their money.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.