Investment Tips

How Do Ship Owners Make Money? Business Insider

Published

2 years ago

August 8, 2022

moneyvests

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How Do Ship Owners Make Money?

If you are thinking of purchasing a cargo ship, you will need to determine the type of trading you will engage in. After conducting market research, you can calculate the total capacity of a ship.

Whether a few large ships are needed or a large number of smaller ships can be profitable, is determined by economic examinations.

In the free market, the freight rate is the rate paid by ships. In return, a ship owner can earn a profit by selling or leasing its freight.

Cargo ship owner pays entire vessel operating expense

In many cases, cargo ship owners are responsible for the whole cost of running a cargo vessel, including insurance and other expenses.

However, there are ways for cargo owners to protect their rights and manage costs. Here are some tips to consider.

1. Make sure cargo is insured. Make sure the cargo is insured before the vessel departs. Otherwise, it may lead to delays and loss of cargo. Also, consider posting security at the discharging port.

Some special purpose shipowners employ their ships exclusively for one particular purpose, such as carrying oil and gas.

Other special-purpose shipowners own fleets of vessels designed for hauling iron ore, cars, or other bulk materials.

These owners are responsible for their entire vessel operating expense, and their lack of flexibility can increase the cost of industrial operations.

This trend has decreased in recent years. However, shipowners of these special-purpose vessels are still a significant portion of the industry.

Fortunately, there are ways to minimize the impact of sacrificial losses. The level of sacrificial loss is unknown at the end of the voyage.

Typically, ship owners will request that cargo owners provide security for their contributions. Such security can be in the form of cargo insurance policies.

Additionally, the cargo owner’s contribution is based on a percentage of the commercial invoice value, which can range from one to 100 percent. In most cases, the cargo owner’s contribution is guaranteed as long as the owner has adequate marine cargo insurance coverage.

Another option for compensation is a voyage charter. Under a voyage charter, the ship owner hires the vessel for a specific period of time.

The charterer has full operational control of the vessel during the time period and pays the fuel, port charges, cargo handling costs, and other expenses. It also pays the charterer’s crew and insurance costs. In return, the cargo ship owner pays for any delays that occur in loading and discharging ports.

Timing the purchase and sale of ships

There are many ways to profit from ship markets, and timing the purchase and sale of ships is one of the most lucrative ways.

In recent years, markets have been strong, and investors expected higher earnings and stronger cash slow streams. In just a few years, ship values have tripled and doubled.

If you know how to time the market, you can double or triple your profits. Here are four examples of how to time the purchase and sale of a ship.

The first thing you need to do is understand the markets. A good idea is to focus on the market for tankers and bulkers. Both tankers and capesizes are selling at reasonable prices, so the timing of the purchase and sale is crucial.

In today’s market, it may be a bad idea to borrow money from a credit fund or another asset. It’s like playing with fire. It’s better to invest in assets that are likely to go up in value over time. Investing in these assets requires a good plan.

Ship markets feature specific characteristics and function as a market for ship owners and asset players.

The asset players focus on the rise and fall of ship values, and enter the market to profit from these price variations. This increases liquidity in the market and improves the allocation of vessels.

This process can make or break a ship owner’s profits. Just remember that there are risks involved. However, this is no reason to give up just yet.

During the market correction in 2008, assets fell precipitously. Many buyers hoped to acquire vessels at distressed prices, but few actually sold them. In contrast, in the boom years of 2012-2015, the price of newbuilding vessels increased dramatically.

Shipbuilders shared their windfalls with international buyers. By timing the purchase and sale of ships, shipowners can benefit from this favorable market environment.

Purchasing a cargo ship from a shipbreaking yard

Many ships are sold to scrap-dealers, who then bring them to their final destination.

Many of these scrap-dealers have links to South Asian shipbreaking yards and are therefore aware of the vessel’s future fate. T

hey purchase the ship as-is and will manage the crew for its last voyage and any necessary paperwork once it arrives at the yard. But is scrapping the vessel profitable?

The answer to that question is an emphatic yes.

If a ship is over 25 years old, it will start accruing legal problems, including unpaid claims and liens. This is when the outer anchorage of the delivery port becomes a battleground between ship owners and creditors.

Innocent cash buyers will become embroiled in these battles, which will result in a difficult life for them.

But cash buyers will pay top dollar to the shipowner and will also bear the financial responsibility for any administrative work following delivery.

A cargo ship in a shipbreaking yard will require extensive repairs and refurbishment before it can be put into service. However, if your budget is tight, you may consider purchasing a secondhand cargo ship from a shipbreaking yard.

There are shipowners who are willing to sell their ships at a fraction of their original price, if you are looking for a bargain.

Many of these ships contain hazardous materials that are banned in developed countries. Asbestos, for example, is used on old ships. These toxins are lethal, so removing them is costly.

These hazardous chemicals also require expensive insurance. While buying a cargo ship from a shipbreaking yard is a good investment strategy for many ship owners, it is not for the environmentally conscious.

Recycling is another way to save money. Many ocean carriers have increased shipping costs dramatically since the pandemic began.

Since January 2020, rates between the U.S. and Asia have risen more than 1,000 percent.

These carriers also charge “detention and demurrage” fees, which is when they’re stuck in a port and can’t move their cargo. This means that scrap metal prices have soared.

Laying up ships when market conditions are poor

If you’ve ever wondered how ship owners make money by laying up ships during a poor shipping market, you are not alone. The situation in the shipping industry is not unique in most parts of the world.

For instance, in the 1980s, more than 400 ships were parked at the Greek port of Eleusis Bay.

This location is an excellent choice for laying up ships when the market is in bad shape, because there is usually a shortage of cargo.

In the early 1920s, shipping rates rose sharply, but they soon sank. As a result, owners took part cargoes on board and slowed down their ships to cut fuel costs.

They also used a large percentage of their fleet to store oil, which soaked up some of the oversupply. However, the crisis was only short lived.

By the beginning of the 1980s, the market was again profitable, and the number of mothballed ships made the crisis visible to non-specialists. The problem was exacerbated by the fact that the supply of oil and gas tankers had reached an all-time high.

Conclusion

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Real Estate

Are UK Homeowners Still Wanting To Move?

Published

1 year ago

August 16, 2023

moneyvests

Are UK homeowners still wanting to move?

Press Release

Date: 19.07.2023

New Open Property Group research looks into where UK homeowners are moving to, and if there is a pattern between homeowners moving out of the city and into the countryside.

Out of 1.25 million homeowners surveyed:

357,244 stated that they ‘want to move’
251,705 stated that they ‘are moving soon’
242,711 stated that they ‘are settling in’
206,694 stated that they ‘just moved’
187,001 stated that they ‘are moving now’

Are homeowners still moving to the countryside since the surge in remote-working and the ever-growing desire for more green-space?

When surveyed, 39% of homeowners specified that wildlife and nature were “more important than ever” to their well-being, and 45% of adults are spending more time outside than they did pre-pandemic.

Despite this, recent data shows that people moving to sparse or remote villages actually dropped by 28%. Adding to this, from 2017 to 2023, the number of homeowners looking to move to remote or sparse settlements actually decreased by 13%

Open Property Group Managing Director, Jason Harris-Cohen said:

“The UK’s property market is undergoing another reset,” says Jason. “There is a definite shift in home moving activity, with the West of the country surging in popularity.

Historically, better value for money has been found outside of London, the South East and the big five cities, and I think that’s what is driving home movers towards Wales and the West coast.”

“The desire for affordability in a cost of living crisis is being compounded by the current relationship between inflation, the Bank of England base rate and mortgage rates.

The rates attached to new home loans, remortgages and additional finance are seriously squeezing buyers’ budgets but there is still a strong desire to move – people are just having to moderate where they look and what they buy.”

“Semi-rural and rural locations will continue to be cheaper places to buy than urban and inner city areas. This will be especially so in the coming months as more people return to offices for work and potentially relocate to reduce commuting times – aspects that will cause metropolitan house prices to rebound .

While the statistics show the trend for rural living has actually declined over the last six years – we may see a surge as purchasers pursue well priced properties.

We’ll also see borrowers taking out mortgages over 30 years – or even enquire about interest-only mortgages – to negate the effects of higher repayment rates.”

“Of course, there will be a large contingent of homeowners who are biding their time before they move – the 357,244 who have indicated they ‘want to move’. This group will be waiting for mortgage rates to fall and house prices to drop before they progress their plans.

In the meantime, they may choose to improve their properties – enhancing their living environment for the present and adding value at the same time. It’s not unimaginable that these delayed movers will fuel a property peak in late 2024/early 2025.”

For more information please visit www.openpropertygroup.com

About Open Property Group

Open Property Group are a professional house buying company who help people sell their properties quickly. They buy all types of properties (including vacant or let), throughout England and Wales.

Open Property Group specialise in buy to let property purchasing which suit landlords who want to cash in property quickly without disrupting the tenants.

Homeowners benefit from selling their house fast, with a completion date fixed to the owners’ requirements. By selling directly, you pay no agent fees, ‎and can plan ahead with certainty. We also pay your agreed legal costs too.

UK 2023 Homemover Behaviour - Open Property Group [Infographic]

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Real Estate

How to Get the Best Market Value for Your Tenanted Property

Published

2 years ago

May 24, 2023

moneyvests

Table of Contents

How to Get the Best Market Value for Your Tenanted Property

Selling a tenanted property can be a smart move for buy-to-let investors looking to maximize their returns. By selling with tenants in place, landlords can attract a broader pool of potential buyers, maintain rental income during the sales process, and potentially achieve a higher market value for their property.

If you’re considering selling your tenanted property, here are some key strategies to help you get the best market value:

1. Showcase a Well-Maintained Property

First impressions matter, so it’s essential to present your tenanted property in the best possible light. Ensure that the property is well-maintained and in good condition.

Conduct a thorough inspection to identify any necessary repairs or improvements and address them before listing the property.

A well-presented property will attract more potential buyers and create a positive perception of its value.

2. Highlight the Rental Income Potential

One of the advantages of selling a tenanted property is the potential for immediate rental income for the buyer. Emphasize the property’s rental income history and highlight its attractiveness as an investment opportunity.

Provide potential buyers with detailed information about the rental agreement, current rental income, and any potential for rental growth. This will appeal to investors looking for income-generating properties and can positively impact the market value.

3. Offer Flexible Viewing Options

Allowing potential buyers to view the property at convenient times can help generate more interest and potentially lead to higher offers.

Coordinate with your tenants to establish a viewing schedule that accommodates both their needs and the prospective buyers.

Flexibility in arranging viewings demonstrates your commitment to a smooth sales process and encourages serious buyers to consider the property seriously.

4. Provide Detailed Documentation

To reassure potential buyers and help them make informed decisions, provide comprehensive documentation about the property. This includes the tenancy agreement, inventory reports, gas and electrical safety certificates, and any relevant building permissions or certifications.

Transparency and thoroughness in providing documentation will build trust and confidence in the property, potentially leading to higher offers.

5. Consider Selling to an Investor

When selling a tenanted property, consider targeting investors specifically. Investors are often more inclined to purchase tenanted properties as they recognize the benefits of an immediate rental income stream.

Approach local property investment companies or work with an estate agent experienced in selling to investors. By targeting the right buyer pool, you increase the likelihood of receiving offers closer to or even above the market value.

6. Seek Professional Advice

Selling a tenanted property can be complex, so it’s advisable to seek professional advice from an experienced estate agent or property consultant. They can guide you through the sales process, help you determine the optimal pricing strategy, and market your property effectively to attract potential buyers.

Their expertise and knowledge of the local market can be instrumental in achieving the best market value for your tenanted property.

In conclusion, selling a tenanted property can be a lucrative opportunity for buy-to-let investors to maximize their returns.

By showcasing a well-maintained property, highlighting the rental income potential, offering flexible viewing options, providing detailed documentation, targeting investors, and seeking professional advice, you can increase your chances of achieving the best market value.

Remember, a well-informed and strategic approach is key to successfully selling your tenanted property and reaping the rewards of your investment.

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Real Estate

The Top 15 Benefits of Living in a Detached House

Published

2 years ago

April 27, 2023

moneyvests

Table of Contents

The Top Benefits of Living in a Detached House: Why It’s the Ultimate Dream Home

Living in a detached house can be the epitome of comfort, privacy, and independence. It’s a dream for many homeowners, and there’s no denying that it comes with a myriad of benefits.

Today, we’ll delve into the Top 15 Benefits of Living in a Detached House and why it could be the perfect choice for you. Let’s explore!

1. Privacy and Freedom Galore

One of the most significant benefits of living in a detached house is the unparalleled privacy it offers. With no shared walls or neighbors in close proximity, you can enjoy the peace and quiet without worrying about disturbing others or being disturbed yourself.

2. Personalize Your Space

Detached houses provide the ultimate canvas for you to customize your living space to your heart’s content. From landscaping and gardening to renovations and extensions, you have the freedom to create the perfect environment for you and your family.

3. No Shared Maintenance Responsibilities

Say goodbye to shared maintenance costs and responsibilities.
Enjoy total control over your property’s upkeep.
Make decisions that directly impact your home without consulting others.

4. Potential for Future Expansion

Detached homes offer the possibility of expanding your living space in the future. As your family grows or your needs change, you can add rooms, a garage, or even a backyard oasis, all without affecting neighboring properties.

5. Higher Resale Value

Detached houses typically have a higher resale value than other types of properties, making them a solid investment for your future. As demand for detached homes continues to rise, you can be confident that your property’s value will appreciate over time.

6. The Joy of Outdoor Living

Make the most of your outdoor space with a detached house.
Host barbecues, garden parties, or simply enjoy a quiet evening under the stars.
Build a play area for your children, a vegetable garden, or a relaxing retreat.

7. Reduced Noise Pollution

With no shared walls or ceilings, detached houses offer a quieter living experience. You’ll no longer have to deal with noisy neighbors or be concerned about your own noise levels impacting others.

8. Foster a Sense of Community

Detached homes often foster a stronger sense of community, as residents have more opportunities to interact and engage with their neighbors. This leads to lasting friendships and an enhanced sense of belonging.

In conclusion, living in a detached house comes with a multitude of benefits that cater to various lifestyles and preferences.

From increased privacy and freedom to personalization and future expansion potential, a detached house can be the ideal home for those seeking the perfect balance of comfort, convenience, and community.

9. Safety and Security

Another advantage of living in a detached house is the increased safety and security it provides. You can install your own security system and take measures to protect your property without having to coordinate with neighbors or a homeowners’ association.

10. Architectural Variety

Detached homes come in a wide array of architectural styles and designs, offering more opportunities for you to find a home that suits your tastes and preferences. From charming cottages to modern masterpieces, the choices are endless.

11. More Space for Hobbies and Interests

A detached house often comes with extra rooms and outdoor spaces that can be used for various hobbies and interests. Whether you’re a fitness enthusiast, an artist, or a budding chef, having more space allows you to pursue your passions without feeling cramped or restricted.

12. Better Energy Efficiency

With no shared walls, detached houses can be more energy-efficient than other property types. Proper insulation and modern construction methods help reduce energy consumption and keep your home comfortable year-round.

13. A Sense of Accomplishment

For many people, owning a detached house represents the ultimate symbol of success and accomplishment. It’s a tangible reminder of your hard work and perseverance, making it an even more enjoyable place to call home.

14. Long-term Stability

Detached homes often provide a sense of long-term stability for families. When you invest in a detached house, you’re creating a foundation for your family’s future, allowing you to create lasting memories in a space that truly feels like your own.

15. Pet-Friendly Environment

For pet owners, a detached house offers the ideal environment for their furry friends. With a spacious yard and no shared walls, your pets can enjoy the freedom to roam and play without disturbing neighbors or posing any restrictions.

In summary, the benefits of living in a detached house are vast and varied, catering to a wide range of needs and desires.

From privacy and personalization to long-term stability and pet-friendly living, a detached home offers a unique and fulfilling living experience that’s hard to match.

So if you’re considering investing in a detached house, rest assured that you’ll be making a decision that will enhance your life in countless ways.

What are some pros of living in a detached house?

Here are some pros of living in a detached house:

More privacy: You have more privacy since there are no shared walls with your neighbors.
More control over your own property: You also have more control over your own property since you are not subject to the rules and regulations of an HOA or other organization.

Nice yard: Detached homes generally have a front- and backyard2. This can be great for gardening, playing with kids or pets, or just enjoying the outdoors.

Freedom to do what you want: When you buy a single-family detached house, the property is yours. You can make changes to it as you see fit without having to get approval from anyone else.

More space for your family: Detached homes generally have more space than townhouses or condos. This can be great if you have a large family or just want more space.

What are some cons of living in a detached house?

Here are some cons of living in a detached house:

Maintenance: You are responsible for upkeep and repairs1. This can be time-consuming and expensive.

Cost: Detached homes generally cost more than townhouses or condos1. This can make it difficult for some people to afford a detached home.

Isolation: Detached homes can sometimes feel isolating, as you are not connected to any neighbors.

Fewer amenities: Condominium and townhome developments often have significant amenities such as swimming pools, fitness centers, and tennis courts3. Detached homes may not have these amenities.

FAQ’s

Q1: What are some of the main advantages of living in a detached house?

A1: Some of the main advantages of living in a detached house include increased privacy, freedom to personalize your space, reduced noise pollution, potential for future expansion, higher resale value, and fostering a sense of community.

Q2: How does living in a detached house affect privacy?

A2: Detached houses offer unparalleled privacy due to the absence of shared walls and neighbors in close proximity. This allows residents to enjoy their space without worrying about disturbing others or being disturbed themselves.

Q3: Are detached houses typically more energy-efficient than other types of homes?

A3: Detached houses can be more energy-efficient than other property types because they don’t have shared walls. Proper insulation and modern construction methods help reduce energy consumption and maintain a comfortable living environment throughout the year.

Q4: What makes detached homes a good investment?

A4: Detached homes are considered a solid investment because they typically have a higher resale value than other types of properties. As demand for detached homes continues to rise, property values are likely to appreciate over time.

Q5: How can living in a detached house foster a sense of community?

A5: Detached homes often create a stronger sense of community, as residents have more opportunities to interact and engage with their neighbors. This leads to lasting friendships and an enhanced sense of belonging within the neighborhood.

Q6: Why are detached houses a suitable option for pet owners?

A6: Detached houses provide a pet-friendly environment due to their spacious yards and lack of shared walls. Pets can enjoy the freedom to roam and play without disturbing neighbors or facing any restrictions typically imposed by shared living spaces.

Q7: What kind of architectural variety is available in detached homes?

A7: Detached homes come in a wide array of architectural styles and designs, offering numerous options for homeowners to find a home that suits their tastes and preferences. From charming cottages to modern masterpieces, the choices are endless.

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