Simple Housing Calculation on to Sell or to Rent-Out

Every coin has two sides. For every thought of buying there is one on the selling side.
The biggest dilema of every real estate / property investor has currently is to sell or to rent out.
With the current downtrending house price, a house investor might assess what price they entered the market and correlate it to the costs they are carrying on the house upkept.

Investors who bought 2 decades ago (in the 90s) and who are sharp enough to exit at the high price during 2006-2007 may have pocketed the profit and reinvest it at the current low. However, how many really are in that fortunate pool, really.

For people who bought at the high or close to the high in this decade are often considering is it worth it to keep the house if the equity is sinking.

Simple calculation to consider :

Selling price - Cost of Selling = SS (Sales Settlement)
Cost of Selling consists of broker fee unless (you use Sell By Owner) and also closing fee or any other legal fee.
One must live somewhere and having a bigger family will be another point in weighing decision on Buying versus Renting that is discussed in my previous entry.

Rental Revenue - Cost of Renting Out = ICF (Investor Cash Flow)
Cost of Renting Out includes property management fee, fixing and maintenance fee, property tax, mortgage payment and association fee.

Now to consider two numbers SS and ICF:
When you can have positive ICF then it is worth it to rent your current your home out. However, one must consider where you should live and if your SS can cover larger chunk to buy the home that you must live in, then you should choose selling your current home.

Simple Housing Calculation on to Buy or to Rent

For folks who are residing in American Continent, I hear your pain. With retail banking only paying a miniscule 1% on your heard earned money in any retail banking products such as saving, checking and money market plus a less than 2% in any of CD products, traditional savers and hardworkers are left to no choice except invest in other place.
Many families are traditionally being told by their parents generation to save and to eventually purchase home where they can put their family root.

The recent housing bust in US shattered many typical white-picket-fences American Dream. For people who enter the housing market prior to 2000, they might be on the last defense of their enter price. Whereas those who bought afterwards, particularly many who use ARMs mortgage financing in California, got their peak price of 2004-2006 popped out losing more than 30% by now off the house peak price.
Nonetheless, these days many younger generation especially generation X and Y who are in our 20s and 30s are starting to decide whether it is a wise decision to buy house right now or to rent.
Declining trends among new house sale in Q2 and Q3 2011 with sporadic price incline and stubborn high-price area such as in San Francisco Bay Area, Santa Monica and Culvert City in Los Angeles area, Hawaii and the Manhattan in NYC make us speculate when truly the bottom is or will be.

Simple calculation to compare between Buying and Renting:
(Buying Price - Downpayment) x flat mortgage interest rate / 12 = average monthly payment
Expenses that unavoidable such as utilities, home or condo association fee, property tax and home insurace, must be added on top of the mortgage payment ---> BC
Other factors that might be a deal breaker are:
- how far the commute from work or daily necessities (groceries, children healthcare, etc) to the rental home or to the bought home.
With gas price at this high in overall major cities, commuting time has become a major decision factor in buying house
- maintenance cost related to the condition and the age of the house. The older the house the more little unexpected things may happen and lead to higher maintenance cost such as wiring, plumbing, roofing, airconditioning / heating, and so on. However, if you score a foreclosed home or a short-sale house at lower than market value, it may cost you too to repair some damages left by the unhappy previous owners/ renters. This is another big dent to your wallet.

Now, we can compare the number derived from above calculation to this Renting Cost :
Rental Price + Security Deposit = RC
Expenses that related to renting is much less than buying a house or a condo / apartment. Usually heating , trash and garbage disposal, parking and water is already included. There is no association fee and no property tax to pay as the major advantage.

Simply, we now can compare BC and RC on month-to-month basis or yearly basis.

In a healthy economy where the housing price tends to go up, buyers are inclined to buy rather than rent because buyer can build equity.
In a trendless or declining economy, where jobs are uncertain and scarce, coupled by declining housing price, buyer prefers to become renter except in metropolitan areas where rental price keeps skyrocketing due to surplus demand.
In this case, one would be better off renting and saving more cash to pay larger chunk on the down payment when he / she decides to buy

Why Apple employees avoid getting in the elevator with Steve Jobs | VentureBeat

Why Apple employees avoid getting in the elevator with Steve Jobs | VentureBeat

Foreclosure Crisis Has No Easy Solution, But Some Ideas Will Not Work - ABC News

Foreclosure Crisis Has No Easy Solution, But Some Ideas Will Not Work - ABC News

How to Motivate

From my observation so far, I categorize human basic wants into 3 major desire. In order to motivate people, in the business-sense, we can apply the Pavlovian result base on each type of the human desire:
1. Money. The most practical and the most sought-after reward is money, nonetheless. It could be for personal reason or family reason or creative reason or business reason, human need money albeit hypocrisy
2. Power. The way we motivate a person / team who is yearning to be on the top rank must be designed leading to the high position this person wants. It could be the title that is being coveted. It could be territory that is being fought for
3. Fame. Make sure we broadcast this person's achievement so that his/ her work result is well-known. No sweat, with popular networking site we can help instant help to make something or someone famous. Youtube, Facebook, Twitter, and RenRen phenomenon will make a simple video on someone doing certain thing goes exponentially famous in an instant

Aside from those 3 major above, there are more abstract reasoning that we can cater business practice such as: acceptance, confirmation, companion and more...

How to Hold On to your Small Business Culture when becoming a Big Business

It is every entrepreneur's dream to grow the business he/she builds and grows it from baby stage to big business. However big business is identical to cold hard impersonal working environment that is commonly understood as treating employees as numbers and value staffs by productivity. 

The challenge is when successful entrepreneur is able to create the personal,caring, and friendly working environment as the company grows bigger in size. Remember the ultimate priority for any business is PROFIT. 

Steps taken to maintain and/or create small business culture must not forget the profit goal.

Points to remember:

1. Make sure everyone is welcomed. Everyone in the business is a family member. It is not an option to make sure the business runs like a family where every part of the family must work collaboratively hand-in-hand. Togetherness must flow naturally and not just because of forceful-bonding run by the Human Resource department.
2. Let individuals form their small groups base on their own interest or tendency to hang out. Then create bridge activity to celebrate milestone of company's milestone and also teamwork's milestone.
3. Have occasional Potluck Sharing or Friday Bagel & Donuts every week. The company can chip in the budget as well as the staff bring in something to share will create conversation and warm family atmosphere in the working environment. Food in general bring in people together in a relax conversation.
4. Encourage open door policy for all supervisor levels and manager levels. If there is problem to be solved, particularly person-to-person problem within the organization, let it be solved as quickly and as openly as possible without holding grudges or putting record on Personal Review or Human Resources record, unless it is beyond company policy or criminal acts.

How to Work with a Bossy Colleague

Bossy Co-Worker is another type of power-hunger corporate animal in the corporate jungle. Not necessary he/she is a bad person in nature. It could be that this person is extremely cautious and paranoid or even perfectionist; hoping that the outcome of what he/she is working on or the team output (where we are incidentally being put into the same place) is no less than outstanding or satisfactory. 
However, if indeed this colleague / co-worker is just bossy and want us to put him/her on the higher pedestal we can deal with him/ her in civilized manner. My suggestion :

1. Make sure we give him/her credit for his/her work. Thank him/her but not excessively.

2. Be genuine and don't suck him/her up by being pretentious.

3. Be inclusive in getting him/her on the same project we are working on and make him/her belongs to the team or even closer to us professionally in tackling the project

4. Respect whatever personal inclination or problem that he/she might be having but give honest feedback when his/ her bossy action has become unbearable

5. CC (via intra-company email) supervisor or subordinate in any related correspondence so that the focus is less on who is the hero but more on what result we have achieve

How to Control Display of Emotion in Corporate Life

Working in a corporate environment for the sake of working or ambitiously climbing the corporate ladder these days need a tactful ploy and finesse. Being too honest and too expressive in our own true opinion often leads to unwanted problem coming our way.
Controlling how we display emotion is the key to survive and battle in the corporate jungle.


Suggestions:
1. First and foremost, we must separate our private life and our corporate life into two different mind compartments
2. Be professional. Tackle and solve professional matters in the work environment; don't bring it home or to family members
3. In working environment, keep reminding ourselves that we must put 'our best effort'. Be truthful and helpful to others yet be strong to our principles
4. Be cool and level-headed at all time. Any career-related or work-problem arise at a professional setting, try to solve it in unemotional manner. Use rationale and facts rather than emotion or feeling
5. Stay calm in any argumentation or negotiation. Try to understand other's bargaining position and strive for calm mind at all time