Starting Your Own Business

I had been so busy these past weeks trying to figure out what kind of business I'm going to put up, where and how.

I had been to and from several locations. It's tiring especially when the distance you're travelling are miles away. There are so many things that have to be considered.

I'm hesitant at times and when things go wrong I wanted to just stop right there and then. But what makes me think twice are the lines I've read from the book "Think Rich Pinoy" by Dr. Larry Gamboa that says "Becoming rich and staying rich involve HARD WORK. But it's only difficult the first time and for a limited period of time. Then it becomes EASY".

Anyways, I'm going to post some of the things an aspiring entrepreneur should consider when starting his / her business and the things I'm learning along the way. (^_^).

What is Selling Price in Real Estate Investing

The selling price or the asking price is simply the price at which a property is offered for sale in the open market. It is based on the Fair Market Value (FMV) of the property.

Generally, the selling price is set slightly higher than the market value usually 1 to 3 percent above the market value. This is to give room for negotiations with the buyer. Be careful though with overpricing you home because this could mean fewer showings and less offers from potential buyers.

In selling your house, you'll want to establish your priority list: Are you more concerned with selling quickly or getting the most money possible? You'll also want to contemplate whether you think the agent's suggested price is reasonable and whether you'd pay that amount if you were a buyer.

Your agent, as well as friends, relatives, and neighbors, will help you point out your house's advantages and disadvantages that you may not have thought about because you're too close to the house and not as objective as others.

A third party will help you think of your house as a commodity—something with positive and negative selling points. At that point you can decide on a price that you deem competitive and in line what other houses in your area have sold for.

Source :

http://www.realtor.com

What is Fair market Value?

Fair market value (FMV) is an estimate of the market value 

of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market. 

The fair market value establishes a realistic price if the asset was sold in the existing market conditions. Once the fair market value is determined, an owner can establish a selling price or a recipient can obtain the appropriate cost basis for a donation or an inheritance. Without an accurate calculation of the fair market value, risk of loss or tax liability increases.

Source : 

http://smallbusiness.chron.com

What is Zonal Value?

I've met the words selling price or purchase price, zonal value and fair market value. Are these three terms similar? I'm confused about the difference of these three terms. There seems to be a thin line separating these three terms.

Let's start with the Zonal Value.

Zonal value is the amount set by the Bureau of Internal Revenue (BIR) with the assistance of realtors, and other knowledgeable persons in the area as the basis for computing taxes. Therefore, zonal values are purely for taxation purposes only. It has nothing to do with the true market value of the property. Zonal value is not an accurate basis when appraising a real property. When applying for a loan in a lending institution, and this especially true with commercial banks, their appraisers rely on the zonal valuation which is much lower than the market value.

Zonal valuation is fixed by the government and re-assessed from time to time. "Much lower" means only a third or even a quarter of the market value.

Zonal valuation is done in order to :

1. establish realistic values of real properties which can more or less approximate the present fair market values  of real properties  as basis for computing the capital gains tax, documentary stamp tax, estate tax of the donor’s tax due when the property is sold or transferred; 

2. have an efficient tax administration by minimizing the discretion both by the tax administrators and the taxpayers in the determination of the tax base.

The BIR assigned zonal values only to :

•  Land

•  Condominiums

•  Townhouses ownership of which are evidenced by a Condominium Certificate of Title (CCT)

•  For purposes of computing all internal revenue taxes (capital gains tax, creditable withholding tax, documentary stamp tax, estate and donor’s taxes, etc.) due on sales, exchange or other dispositions of real properties, the zonal value established shall apply provided the same is higher than :

(1) the fair market value as shown in the tax   

declaration, and

(2) the gross selling price / consideration as shown

in the duly notarized document of sale or

exchange of real properties.

Furthermore, the zonal value is not the only basis for computing the applicable taxes. The Fair Market Value (FMV) and gross selling price are also considered. Whichever is highest among the three will become the basis for the computation of applicable taxes.

If you want to know the zonal values of a particular property your eyeing, please click the link below. 

BIR Zonal Values

Sources : 

http://sassylawyer.com

http://picpa.com.ph

http://www.foreclosurephilippines.com

http://www.asianappraisal.com.ph

Seminar on Real Estate Investing : Think Rich Pinoy Workshop

One of the most important thing to do before entering a new venture is gaining enough knowledge about the new venture you want to enter to. One way to do this is attending relevant seminars.

This September 1, 2012, I'm going to attend the Think Rich Pinoy Workshop and I'm excited because I would be able to play the famous game of Robert Kiyosaki which is the CASHFLOW 101. I could only read about this game from books, articles and blogs. But because of this seminar, I would be able to play it first hand. I hope I would be able to get out from the rat race. (^_^).

Not only CASHFLOW 101 but there are a lot more blessings we could get from this seminar.

I'm sure I would learn so much from here.

If you're interested in this seminar and want to avail please click the link below. Only limited seats are available . They could only entertain 100 persons per batch.

THINK RICH PINOY WORKSHOP