Mortgage and Depreciation Expense and Tax Analysis Essay

Mortgage and Depreciation Expense and Tax Analysis - Essay Example However, although the mortgage rate rises from 5% to 10% in the current scenario, the appreciation of houses that consumers can buy rises from 2% to 9%. This implies that demand for consumers wanting to purchase a house goes down. With such deliberations, it is apparent that an investor will find it difficult getting customers willing or able to buy a house. This becomes tricky unless the investors have some other sources of obtaining funds to service the mortgage. To many investors, availability of consumers to purchase their house is a vital factor to consider when mortgaging a house because rents collected from them highly help pay for the mortgage (Lank, 2003). In another dimension, it is argued that in any investment, it is important to venture into business when prices are low, and exit or dispose when prices are high. However, in this scenario, both interest rates and prices of housing are high. In this regard, investors need to consider other factors such as growth in the eco nomy, local employment rates, and the growth of population in the area they wish to invest in. this means that if predictions about these factors turns out to be in his favor, the investor can go ahead with the mortgage. Second scenario If interest rates were able to be deducted from investor’s income, it is an option that many people would like to go for. However, since every investor aims at making a profit and avoid making losses, having interest rates for the mortgage being deducted from their income poses a great threat in servicing the mortgage and meeting other needs that are planned to be addressed by the income (Lank, 2003). Obviously, the investor has other obligations to meet with the income. So when his income starts servicing the mortgage, this means that some of his other projects would be at haul. However, this option is only applicable to first real estate investors who have not experience on serving their mortgage. When this happens, there is a possibility of the investor to service the mortgage on his own as he awaits such a time when prices goes up for him to dispose the house. However, this being the only option the investor has to service the mortgage; it is risky because unlike when the investor would have other means of servicing the mortgage, if consumers are unable to pay or even decides to move to other houses, the investor risks loosing the house unless they turn into their personal income to pay for it (Lank, 2003). All in all, if the income generated from the house can be able to pay for the mortgage, the better. This ensures that an investor’s other businesses or incomes are not disrupted to service the mortgage. Third scenario Deducting taxes from the income earned from the property can be argued to be the best option. The deduction is partial recovery of the cost of the property. Generally, when the property is able to take care of taxes, investors are assured of effective payment of the mortgage. This is unlike wh en they have to pay for the taxes from other sources. In fact, when taxes are deducted from the income generated from the property, the investor is in a better position to claim a tax reduction whenever there is depreciation of the property that generates the income (Lank, 2003). More importantly, when taxes are deducted from the income, the investor can take advantage of the internal revenue services provisions in the area where the property is located. Fourth scenario Every investor would be happy to have

Benefits of Effective Human Resource Management Essay

Benefits of Effective Human Resource Management - Essay Example Zakaria, Zainal and Nasurdin define human resource management as â€Å"a philosophy, policy, system and practices that can affect the behavior, attitudes and performance of employees† (2011, p.77). Durkovic (2009) acknowledges the importance of human resource management noting that organizational success significantly depends on the manner in which human potentials are managed. This implies that managers of human resources have to be equipped with the necessary skills in order to produce the best from the employees despite the challenges involved in managing people. The concept of human resource management Human resource management has undergone significant change in theory, practice and research over the previous decades. The pressure from both the internal and external environments has caused HRM to deviate from its administrative tasks as personnel management to adopting its new role as a root of sustainable competitive advantage in organizations (Durkovic, 2009). Previousl y, the functions of HRM as a key driver of success in an organization were ignored. However, in the modern economic environment, its potential role in enhancing the performance of organizations has been appreciated with its practice improving performance through customer and employee satisfaction, productivity, innovation and developing good reputation in an organization’s community. ... Through scientific selection process, it supplies an organization with skilled workers. Similarly, human resource management prepares workers so that they fit within the changing environment through training and development. It encourages experimentation and innovation so that costs would be reduced and productivity increased. This shows that human resource management plays a key role in an organization and should therefore not be undermined. It relates to all organizational activities including production, marketing and finance among others. Jackson, Schuler and Werner (2012) further observe the importance of human resource management in satisfying various stakeholders in an organization including investors, owners, employees, other organizations and the society at large. The concern in this would be in people as resources and not as factors of production. It encompasses the cycle starting from recruitment to selection, hiring and training so as to develop human assets. Required ski lls Effective human resource management requires one to possess the required skills for appropriate management to ensure that organizational objectives are achieved. The basic skills cited by Jackson, Schuler and Werner (2012) include listening, presentation, communication and leadership skills. Negotiation skills would also be critical in ensuring that these managers recruit the best skills in the market at competitive rates. Due to group dynamics in an organization, human resource management calls for skills in group problem solving so as to ensure harmony among the employees. This would be coupled with the demand for team building skills to ensure that the organization works as a team towards a