TIPS FOR HANDLING A WATER DAMAGE INSURANCE CLAIM

Water damage is said to be one of the highest causes of insurance claims; this may be because water can damage your home or business in many ways. Sources of water damage are limitless, ranging from pipe leaks to hurricanes; water damage can be precipitated from various causes. Because of this, most homeowners and businesses ensure their property for water damage. This way they can have little or no expenses to bear when their homes get damaged by water.

However, in time past, many individuals have had their insurance claims rejected by the insurance company. This has led some peoplejust fixing the problem out of pocket, with their own money.  This should not be the case! To avoid this happening to you, here are some tips on how to handle a water damage insurance claim:

  • Report the damage immediately:

Water damages the first thing to do immediately your home or business is to call the insurance company and inform them.  This is because many of these companies expect you to give them prompt notice. However if you begin to fix the house by yourself and putting things together, this will make the insurance company give you less than to deserve and not fully honor your insurance claim. In addition to this, it is essential that after you call them up, you try to prevent further damage as much as possible. If you do not do this and it is discovered by the company, it can also lead to them not paying you your full insurance claim.

  • Record the Damage:

It is essential that you record the extent of damage caused by the water, this way you will be able to answer the questions thrown by your insurance agents. You will not only answer the questions, but you will also back up your statements with evidence. You are expected to write down a list of damaged items and also take photographs of the damaged areas of the house. Do not take this process lightly; be as detailed as possible in doing all of this.  That way you have all the evidence you need in laying an insurance claim.

  • Find a temporary place to live in:

This tip is for those whose homes are severely damaged by water. If the home has become compromised to an extent where it does not support human life, then it’s probably a good ideadto look for another place to live in while you file your insurance claims.

  • Hire a Public adjuster:

A public adjuster is a professional who has adequate knowledge of insurance and insurance claims which can represent you so that you can get everything you deserve from the insurance company. They help you with their knowledge and expertise, so you do not end up at the losing end of your case. This is very important because insurance professionals are privvy to legal nuances that can leave the layman stumped.

 

Handling an insurance claim is not easy, especially a water damage insurance claim. With the tips provided above, you will be better prepared to navigate the waters and come out victorious.

 

Buying a hotel room for investment

Buying an apartment or a house to live in is one thing. Trying to make money on such investment is another issue.

In the 20th century, it became common practice to buy and sell individual hotel rooms. This way, developers could attract large numbers of investors, while the owners of hotel apartments could get high-yielding assets for affordable prices.

An investor can buy a hotel room on various conditions. After the purchase, the owner usually signs a contract with a managing company that takes care of the asset.

Payments are made either on fixed terms (if the company rents the room) or based on the hotel’s performance. The first option generates stable returns of about 4%, while the second offers higher returns (6-10%), but higher risks too. It is also possible to use the apartment for your own purposes.

So what are the advantages of buying hotel rooms for investment?

Relatively low entry threshold

An investor can purchase a hotel room for about $100,000 – $300,000 depending on the hotel’s rating, location, and the room’s size. Larger apartments may cost more, but they’re evidently cheaper than purchasing the whole building.Investors mostly choose 3 and 4 stars hotels, since they serve the widest groups of tourists.

Diversification capability

Since such assets cost less than the whole building, an investor can invest in a number of rooms in different hotels – not necessarily in one and the same location or even country. Just like you would want to put your money in different stocks to avoid simultaneous price drop.

No need to manage property by yourself

Since hotels are still managed by operators (even when they’re owned by other people or entities), investors don’t have to participate in their work. Such companies as Wyndham, Hilton, or Marriott are professional teams who know their business. Although some may feel uncomfortable with their asset being under someone else’s control, most investors who have no expertise in hotel management gladly accept these terms.

Where to buy a hotel room?

There are lots of resorts and business hubs offering hotel investment options, but not all such assets can be considered high-yielding. The option is worth considering if the following is true.

It’s a popular resort

There’s no point in buying a hotel room for investment if nobody stays in it. So the more tourists the destination attracts the better. 10-20 million visitors a year is a good result for a city.

It’s a popular business hub

Business travelers stay in hotels too, so one could capitalize on business hubs. Leisure tourists usually prevail, but there are several destinations attracting both categories of visitors such as Dubai in the Middle East.

Managed by renowned operators

If the city has hotels managed under popular brands, you can be sure that this destination has high potential. Otherwise such companies wouldn’t be here. Although it may be costlier, it’s always better to work with popular brands.

Infrastructure

Lastly, pay close attention to the local infrastructure that may attract visitors. Resorts must have beaches, restaurants, and entertainment options, while business hubs need developed MICE industry. Transportation is important in both cases.

 

 

What Is A Hard Money Loan And When Is It Used?

What’s the first thing that comes to your mind when you hear ‘hard money loan’? Did it make you apprehensive, suspicious or fearful? Would you be willing to apply for it if you are in need? Admittedly, the term earned a bad reputation because of some unscrupulous people who used it to take advantage of borrowers. However, it is not really bad and certainly not risky to apply for this type of loan if one needs money. If you are in need of money for whatever reason, you may apply for a hard money loan. However, it is better if will you understand what this type of loan really is before you apply for one.

What You Need To Know About Hard Money Loan

A hard money loan is actually just a short-term loan which requires real estate collateral. Private investors are the usual lenders of these types of loans. They are not usually given by traditional commercial lending institutions like banks and credit unions. The term of payments usually runs to at least 12 months. But it is not unusual for a hard money loan to be extended up to 5 years. The borrower is required to pay his installment on a monthly basis. He can choose to pay the interest only, or interest with some portions of the principal if the agreement is balloon term payment, meaning a major amount of the principal is to be paid at the term’s end.

Since hard money loan is secured by real estate, the amount of loan will be dependent on the value of the real estate to be mortgaged. It is not necessary that the property is already owned by the borrower. He can use a property that he is in the process of acquiring as collateral. Lenders of this type of loan are more interested in the value of the property more than the credit rating of the borrower. People who got disapproved by commercial banks and credit unions are the ones who usually resort to applying for hard money loan. As long as their equity in the property is sufficient enough, they could apply for a loan.

One can obtain a hard money loan faster than other types of loans, because it is not tied up with the credit rating of the borrower, and the requirements are flexible. However, there is a trade-off. It is more expensive than other loans. The usual interest rates are from 7 percent to 12 percent, plus additional charges of 1 percent to 10 percent once the loan amount is released. But this does not discourage investors from applying because the term of payment is only short, with an average of three years.

Who Usually Applies For A Hard Money Loan?

There are basically two types of borrowers who apply for hard money loans. They are:

1) Those who are rejected by commercial banks or credit unions

Borrowers who have low credit ratings, those who suffered from foreclosures of business, and those who have credit issues, and other similar financial shortcomings, are usually frowned upon by banks and credit unions. Banks also look at the current income of the borrower if it will justify the loan approval. If he has a healthy income, the bank might approve the loan. If not, the loan application will be rejected. Hard money lenders are not very particular about these issues. As long as the borrower owns sufficient equity on the property being collateralized, they will approve the loan.

2) Investors in real estate

Real estate investors apply for hard money loans because they can be quickly funded. Applying for a hard money loan and getting the loan proceeds usually take only about a couple of days compared to traditional bank loans which could take around 30 to 45 days. There are cases wherein hard money loans were approved within the day. Obtaining money from the lender at this fast clip is very advantageous to investors in real estate. For instance, if there are many bidders for a certain piece of prime property, a bidder can readily produce the money to pay for the land coming from the proceeds of a hard money loan.

Even If It Is Flexible, There Are Still Some Requirements

Although lenders of hard money loans are not as picky about their requirements, they would still require the borrower to prove that they are worthy risks. First, the borrower should be able to prove that he has the capital to pay for the interest on his loan. Second, he should be able to show that he has a logical plan by which he intends to pay off his loan. And third, he should be able to show that he has enough equity of the property that he is offering as his collateral. For as long as he can show his capability of doing these three things, the lender is willing to overlook all things that may jeopardize his loan application.

 

Finance And Accounting Outsourcing Trends

Outsourcing business operations is one of the new trends followed today by most of the companies. The Finance and Accounting outsourcing industry too has grown to a large extent today. Big, medium and small businesses resort to outsourcing accounting operations, because it saves them a lot of time and money. This is a process when a business hands over its finance operations to an external agency (team or individual). This external agency will take care of all the accounting operations, thereby releasing the burden of the businesses. These agencies charge a nominal fee for the finance and accounting services (preparing entries, finalization of accounts, getting audit compliance reports, year-end reporting, etc.) rendered. Some of the recent trends followed in this industry are as follows:

Robotic Process Automation (RPA)

One of the latest trends that are creating waves in the field of outsourced finance & accounting operations is Robotic Process Automation. As the name indicates, this process involves the use of technology to automate processes, improve their quality and eliminate all the unnecessary and repetitive processes involved in delivering the final result. Through this process, the agencies that take care of F&A operations of their clients, make use of computer software to bring about the speed, efficiency and accuracy in the way accounts are managed and presented.

Predictive & Prescriptive analytics

This is one of the most successful trends employed in the finance and accounting industry today. This method involves in providing a descriptive analysis, predictive analysis on how the future model would turn out to be and prescribing an optimum solution that suits the nature and operations of a particular business. When this trend is adopted by agencies who handle the F&A activities, businesses get an idea of their current situation, forecasts for future and apt F& A model to be adopted. The finance and accounting outsourcing agencies give a detailed report about this to the business for reasonable charges.

Hybrid pricing models

In the finance and accounting outsourcing industry, many agencies charge rates based on the hybrid pricing model. In this model, business owners need to pay the agencies that take care of their F&A activities, only for the exact services that have an impact on the business earnings. If you are a business owner, you can choose this model, because it is tailor-made for you with flexible pricing structure. Delegate only particular tasks to finance and accounting outsourcing companies and pay exactly for that.

Finance and Accounting Outsourcing Going Strong

Trends
Due to the growing economic instability and decline in profit margins in most industries around the world, the management strategies of companies are now solely focusing on increasing efficiency and on generating significant cost savings. Business process outsourcing as a strategic tool has been accepted as one of the most effective means to achieve these twin goals. Most companies now consider finance and accounting outsourcing as an important part of their outsourcing strategy. Some recent studies and surveys highlight the following:
• An independent survey estimated that Software and Services export revenues expected to grow over 16-17% to reach USD 62 billion by FY 11 with FAO being the second largest area of outsourcing
• The Finance and Accounting Outsourcing (FAO) market in 2010 is expected to resume a growth trajectory more similar to pre-recessionary levels, moving towards 20 percent and reach nearly US$3.7 million in annual contract volume (ACV)

Common Activities outsourced in Accounting
The most common activities in this area include:
• Record to Report (e.g., general accounting and reporting, forecasting and planning, banking)
• Procure to Pay (e.g., invoicing, travel and expense)
• Order to Cash (e.g., order processing, credit and collections)

Benefits
While cost reduction would remain the primary driver for finance and accounting outsourcing, a study suggests that global finance executives also appreciate the ability to gain sharper focus on core competencies. Thirty-two percent of the respondents said outsourcing was instrumental in increasing the business productivity of the finance staff and allowed their organizations to access best-of-breed talent and technology.

Some of the key benefits of outsourcing are as follows:

• Cost savings-Outsourcing reduces staffing costs by 30 to 70%, reducing the overall net processing costs by 20 to 50%. Good accounting firms are equipped with state-of-the-art infrastructure, innovative technology and professional expertise to handle custom projects in their branch of specialization. As a result, you are not only saved from making costly investment, but also get the benefit of professional expertise at a price most of the developed countries cannot offer
• Greater leverage-Buyers have access to supplier leverage gained from infrastructure sharing and process consolidation
• Improved reporting-Outsourcing could also improve service delivery, enhance process accuracy and increase the speed of reporting
• Achieve strategic business value- According to a recent study, half of the total respondents indicated that FAO is viewed as a tool to address both operational and strategic F&A needs

Buyers generally achieve the benefits they seek from their FAO implementation, particularly relative to reducing cost and using savings to fund F&A transformation efforts

The role of outsourcing in driving profitability has increased significantly in the current economic scenario. Organizations that adapt outsourcing will not only lower their operating costs but gain significant competitive advantage within their industry.

Trends of Outsourcing Finance and Accounting Services

Organizations are looking for effective finance and accounting trends, ways to reduce the operational costs and gain a competitive edge in the market today by outsourcing their processes.

2014 is expecting a growth of 56% in BPO service sales in the first three months of the financial year.

As per the research carried out by a self-regulating research firm, strong development is estimated in business process outsourcing. The global market shows an approximate opportunity rate of US $150 to $200 billion in the field of finance and accounting.

Back in 2010, the industries that largely shifted to finance and accounting outsourcing were retail, manufacturing, travel, financial services and logistics. These sectors accounted for roughly 70 to 75 percent of the total spending. Other industries exploring the scope since then include real estate/ property buying & selling firms, medical, banking and IT firms.

The finance & accounting solutions also takes into account payroll, accounts receivable and accounts payable outsourcing processes. Evolving development trends in this sector are financial planning and business analysis.

Reducing cost and enhancing business productivity has always been the focus of organizations operating in this field. Today, looking beyond mere cost reduction the emphasis is shifting on to create new revenue streams. Potential BPOs must make noteworthy advancements of performance metrics while dealing with large accounts of inefficiencies. Subsequently, this moderates financial risks and ensures compliance with the developing regulatory norms.

The outsourcing organisations who are up to elevate the finance function and meet client challenges, propose the best ever finance & accounting solutions to the industry. In the virtue of accelerating financial growth without putting an organisation into much of a risk, BPOs plan to give a sustainable development while enduring to capitalize on manpower and innovation.

Obtaining a better insight on business performance and maintenance, the shared service providers can lend a great support for preparing revenue growth plans. These outsourcing firms operate as a comprehensive partner supporting, managing and executing finance related functions covering the following:

General ledger
Accounts receivable
Accounts payable
Reporting & compliance
Budgeting & forecasting

Financial service providers drive a robust implementation of process enhancement mechanism that manages the monetary and regulatory risks, contributes in business growth while maintain the cost.

Such refined economic methodology not only helps businesses improve efficiency but, also drives value through upgraded key performance indicators such as profit recovery, DSO, etc.

Adding on to the business value, the service providers work towards bringing process improvement to an organisation leading to profits that are greater than their yearly convention value. Organisations benefit as enhancement in the map of accounts leading to decline in the month-end closing cycle by 10%. Firms gain up to 30% more business efficiency during their work tenure of outsourcing processes.

How the Finance and Accounting Process Is Transforming?

The chief financial officers and business owners, nowadays, look beyond cost reduction. Their focus is on developing new revenue streams for their business. They want to make a significant improvement in their performance metrics, while lowering down the inefficiencies. Consecutively, they look to address regulations and mitigate allied financial risks with the growing regulatory norms.

The financial and accounting organizations can elevate the business proficiency of any organization, thus, entrepreneurs seek to meet the following challenges.

Entrepreneurs want to:

• Accelerate revenue growth and reduce costs, without giving any risk to a business
• Acquire a greater understanding over the performance metrics and course of a business, requiring an adequate support for the growth of revenue plans
• Sustain a profitable growth and make a better investment in people and innovation

How service providers can help?

Service vendors operate as an extending arm or technology partner providing finance & accounting services and handling financial functions spanning across the following areas:

• Accounts Payable
• Accounts Receivable
• General ledger management
• Budgeting and forecasting
• Reporting and compliance

The third-party vendors help enterprises manage the fiscal and regulatory risks, drive robust business execution at the best cost and assist a business empire to accelerate growth. Service providers help entrepreneurs to explore new markets and find methods to maintain a stance in the existing market.

The outsourcing procedure not only helps an organization to improve competitiveness, but also, drive efficiency through enhanced KPIs (key performance indicators).

Outsourcing:

Offers financial centers of excellence: to drive best industry practice and benchmark finance and accounting processes.

Integrates technology as a value proposition: to help entrepreneurs reduce process timelines, accelerate process productivity, simplify processes, increase accuracy as well as maximize the value of the existing ERP or enterprise resource planning investment.

Manages risk and assures compliance and quality: to build secure and reliable operations with independent risk management, compliance, and quality assurance for your operations.

Enhances business model: to help entrepreneurs get the full mileage from outsourcing initiatives, reducing costs, enhancing control and reducing process cycle time.

A service provider implements best industry practices to enhance the overall financial and accounting functions. Reputed service vendors build the credentials of a process to support the varied financial needs of an organization, with the help of a large pool of dedicated accounts team.

Outsourcing is transforming the entire finance and accounting value chain, by working on process improvement and offering value addition to the businesses. Service providers offer end-to-end services, ranging from routine services to high-end integrations, which makes the financial stature of an organization robust. The comprehensive suite of outsourcing solutions also include, niche services such as credit referral, revenue assurance, financial settlement and rent disbursement.