Tips Investing in Rental Property

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					FirstFocus                 Fa l l 2 0 0 3




Buying Rental
Property
page 3




                Boost Your Online
                  Banking Power

                       Ideas from
                  Investment One

                  Small Business
                      Strategies
           FirstNews                                                                                            Upcoming
                                                                                                                        Events
                                                                                                                First National Bank has

      2-for-1 Ticket Offers for Sports Fans!                                                                    scheduled a wide range of
                                                                                                                financial seminars for this fall
                                                                                                                and winter. These educational
      First National Bank is teaming up with Creighton University and The University of
                                                                                                                presentations are designed to
      Nebraska at Omaha to welcome college sports to the Midwest’s newest arena —
                                                                                                                keep you informed about
      Qwest Center Omaha. As a First National Bank customer, you can be a part of the
                                                                                                                important issues relating to
      excitement! Just use your First National Bank Omaha Visa® Check or Credit Card to
                                                                                                                your money. If you missed
      purchase a ticket to one of the games listed below and get a second ticket free! To
                                                                                                                any of these seminars in the
      take advantage of this offer, visit the Qwest Center Omaha Box Office, mention the
                                                                                                                past, now is your chance to
      2-for-1 offer and use your First National Bank Omaha Visa Card.
                                                                                                                attend. All seminars are free
                                                                                                                of charge and open to the
        Bluejay                                               Maverick                                          public.

        Basketball                                            Hockey                                            Kids’ Banking Seminar
                                                                                                                Children between the
        Nov. 22, 2003                                         Nov. 7, 2003                                      ages of 6 and 12 are wel-
        San Diego               7:05 p.m.                     Lake Superior State          7:05 p.m.            come to attend our popular
                                                                                                                Kids’ Banking Seminar on
        Nov. 29, 2003                                         Nov. 8, 2003                                      Saturday, December 6 or
        St. Bonaventure         1:05 p.m.                     Lake Superior State          7:05 p.m.            Saturday, January 24.
        Dec. 3, 2003                                          Nov. 14, 2003                                     The classes will offer intro-
        Bethune-Cookman 7:05 p.m.                             Northern Michigan            7:05 p.m.            ductory lessons about
                                                                                                                First National Bank (and
        Dec. 6, 2003                                          Nov. 15, 2003                                     banking in general) and
        Delaware State          1:05 p.m.                     Northern Michigan            7:05 p.m.
                                                                                                                how to save and spend
                                                                                                                money wisely. After each
        Note: All games and times are subject to change. 2-for-1 offer and tickets are subject to avail-        session, children will receive
        ability. Free ticket(s) must be of equal or lesser value. 2-for-1 offer is good on up to four tickets   a $10 voucher to deposit
        (two paid and two free) per game for the same event. Tickets must be purchased at the Qwest             into a new or existing First
        Center Omaha Box Office using a First National Bank Omaha Visa Check or Credit Card. ■                  National savings account.
                                                                                                                To enroll your child, call our
                                                                                                                reservation line at 964-8401

     New                                         Locations                                                      or log on to our website at
                                                                                                                www.firstnational.com/forkids.

    First National Bank understands that even in today’s high tech world, sometimes there’s no
                                                                                                                Long-term Care Seminars
    substitute for cash.
                                                                                                                What is long-term care insur-
    Next time you find yourself in need of an ATM, just look for one displaying the                   logo at   ance? Who needs it? What are
    places like:                                                                                                the costs? Get the answers to
    • Qwest Center Omaha — No need to stop at the ATM before the game or concert. First                         all of your questions at our
      National Bank is excited to be the exclusive provider of banking services at the Qwest Center             Long-term Care Seminars.
      Omaha. You’ll find convenient ATM locations throughout the Qwest Center Omaha complex.                    We are offering sessions on
    • Nebraska Furniture Mart — First National Bank has teamed with Nebraska Furniture Mart to                  Tuesday, November 25 and
      bring you two new ATM locations. Whether you are shopping at Nebraska Furniture Mart’s                    Tuesday, January 27. For more
      main store, here in Omaha, or checking out their newest store in Kansas City, Kansas, you’ll              information or to RSVP ,
      find an ATM for your banking needs.                                                                       please call 402-964-8400.
                                                                                                                Space is limited, so reserve
    • Memorial Stadium — Headed to Memorial Stadium for a Nebraska game? You’ll find new ATM
                                                                                                                your spot today.
      locations inside both the East and West stadiums. These new ATM locations are in addition to
      the existing locations at the Stadium Ticket Office and UNL Bookstore.
    For a complete listing of the more than 270           locations, visit us online at
    www.firstnational.com or contact a Personal Banker. ■

2
                                                      Buying Rental Property




                            Rental Real Estate —
                            Is It for You?
What’s not to like? As the owner of residential rental property, you can look forward to a regular stream
of income, tax breaks and, quite possibly, a steady rise in the value of your property. As with most
business ventures, however, making money from a rental property is not a slam dunk: You have to fac-
tor in the potential impact of bad tenants, government red tape and maintenance costs.

Whether you’ve just bought your first rental property or you’re     As the owner of a rental property, you’ll have to report the
thinking about taking the plunge, you’ll stand a much greater       rental income you receive on your tax return. Within limits,
chance of succeeding if you spend some time learning about          you can write off depreciation and other business expenses of
the pleasures — and the pitfalls — of owning rental real estate.    the rental property. Consult your tax advisor for more informa-
Here’s a brief overview of some of the things you should know.      tion on the tax aspects of owning rental property.
Find the Right Property                                             Choose Tenants Carefully
Your first step should be to work with a real estate professional   If the property you buy
who specializes in rental property and is familiar with the areas   already has good ten-
you are interested in. Look for property with a solid, docu-        ants, then you’re in
mented rental history. Make sure the property is in a stable or     luck. However, tread
improving, low-crime neighborhood, preferably where real            carefully if you have to
estate is appreciating in value.                                    locate new tenants.
Also consider whether the pool of potential renters is likely to    First, familiarize yourself
grow or decline. For example, buying property near a college        with the laws — the
may make sense since students, administrators and academic          federal Fair Housing Act,
staff typically want to live close to campus. On the other hand,    for example, forbids dis-
you may want to think twice about buying property in an area        crimination based on
where industries and businesses are struggling financially.         race, color, national ori-
                                                                    gin, religion, sex, family
Hire a home inspector or an engineer to evaluate the condi-         status or disability. Also
tion of the building. If it needs work, get a contractor to pre-    find out what questions
pare a quote outlining how much it will cost to make things         you can and cannot ask
right. If the proposed cost of repairs will take several years to   prospective tenants.
recover, it may be wise to look elsewhere.
                                                                    When you interview prospective tenants, be up-front about
Do the Math                                                         your rules regarding issues such as pets, security deposits and
Is the asking price in line with similar properties that have       paying for utilities. Carefully screening tenants early in the
recently sold in the same area? You don’t want to overpay since     process can prevent headaches later on. Local laws may cap
that will cut into your future profits.                             rental amounts and rent increases, so be sure to find out if
You want to have a positive cash flow. Your cash flow from the      these types of restrictions affect the property you’re considering.
property is rental income less all expenses, including your loan    Meeting Your Mortgage Needs
payment, taxes and insurance, maintenance expenses and any          Investing in rental property is a big step, but one that’s poten-
property management fees. Ask the seller to show you records        tially very rewarding. First National Bank offers a comprehensive
from previous years and add up the total operating expenses         range of mortgage products to meet your needs. You can choose
— water, electric and general maintenance costs. You can also       a fixed or adjustable rate mortgage with a term that is appropri-
access previous years’ expenses from your local utility compa-      ate for you. For more information, please call us at 498-5340.
nies. Once you have all the figures, you’ll be better able to see   Outside Omaha, call 800-228-4411 extension 5340. ■
whether the income from rent will cover all your costs.



                                                                                                                                          3
                                                 Boost Your Online Banking Power




    Looking To Add a Little
    Convenience to Your Busy Life?
    At First National Bank, we want to make it easier for you to manage your money. That’s why we’re
    pleased to introduce two new services available through First National Online at www.firstnational.com.
    Online banking customers can now sign up to receive Priority Alerts, a simple, hassle-free way to track
    your First National account events via e-mail. And BillPay customers can now take advantage of
    MultiPay, a quick and convenient way for you to pay all of your bills on one web page.

    Priority Alerts — We’ll Keep You Posted                          Priority Alerts make it easy to track your First National Bank
    Let’s face it, you probably have better things to do than keep   accounts. It’s simple to sign up and, best of all, the service is
    track of your bank accounts. But it’s important to know          free when you’re enrolled in online banking. Sign up for
    what’s going on with your money. With Priority Alerts, you       Priority Alerts today at www.firstnational.com.
    can sign up to receive e-mail alerts for your First National
    Bank checking, savings, money market, line of credit, CD,
    IRA and credit card accounts. Here is a sampling of the alerts
    that can help simplify your banking:
    ■ Statement Information Available — lets you know when
    your statement information is available to view online
    ■ Nearing Potential Overdraft — alerts you when your
    checking account balance falls below your predetermined
    dollar amount
    ■ Balance Update — tells you when the balance on your
    checking, savings or money market account falls below your
    predetermined dollar amount
    ■Maturity Date — reminds you that your CD or IRA will
    mature in 10 business days
    ■ Interest Paid — lets you know when interest is paid to
    your CD or IRA
    ■  Payment Due — notifies you five to 15 days before your
    line of credit or credit card payment is due
    ■ Payment Posted — announces that your payment has
    posted to your credit card account or line of credit
    ■ Nearing Credit Limit — tells you that your line of credit
    or credit card account balance is within your predetermined
    dollar amount
    ■ Credit Advance — lets you know when a line of credit
    advance is deposited to your checking account




4
MultiPay — Pay All Your Merchants on One Page
Did you know that over 13% of U.S. consumers are already
paying bills online — compared to only 2% in 1998? What’s
more, a report by Juniper Research indicates that by 2006,
52 million households will pay at least one of their bills online.
The numbers shouldn’t surprise you. Paying bills online can
save you both time and money.
First National Bank’s Online BillPay service allows you to
access, view and pay your bills over the Internet — anywhere,
anytime. And now, there’s even more. We’ve just added a new
feature to our BillPay service called MultiPay. With MultiPay,
you can quickly and easily pay all of your bills (up to 20 pay-
ments) on one web page. And best of all, BillPay is free with
our 360° Checking and Checking Plus accounts.* Other
features of BillPay allow you to:
■   Schedule one-time or recurring payments
■   View payment history on all your merchants
■   Check/change your pending payments
■   Pay anyone, anytime — 24 hours a day, 7 days a week
At First National Bank, we are confident that our new services
will help simplify your everyday life. If you already bank online,
simply sign up to receive Priority Alerts and be sure to take
advantage of MultiPay. If you don’t currently bank online,
you can enroll today at www.firstnational.com. ■

*BillPay is $3.95 per month for all other checking accounts, up to 20 payments. Each
 additional payment is $.50.




                                                                                       5
                                                       Ideas from Investment One



    New Tax Law Boosts Appeal
    of Dividend-paying Stocks
    Just as every wardrobe should contain some enduring classics, every portfolio should contain some
    classic, time-tested investments. Dividend-paying stocks are one such classic.

    Much of the investing public ignored dividend-paying stocks       Don’t Focus on Yield Alone. You shouldn’t use a high dividend
    during the highflying 1990s. But, historically, companies that    yield as the only criteria for buying a stock. Here’s why. A $40
    pay dividends to stockholders have often performed better         stock with an annual dividend of $2 has a 5% yield. If the stock
    than companies that don’t. For example, from 1980-2002,           price falls to $20 and the dividend is unchanged, the yield has
    dividend-paying stocks beat stocks that didn’t pay dividends      doubled to 10%. In this case, a high dividend yield could be
    by 2.7% a year.*                                                  a sign that the company may be underperforming because its
                                                                      stock price has dropped significantly.
    Now there’s one more compelling reason to consider including
    dividend-paying stocks in a portfolio: The recent federal tax     Look at History. Although there are no guarantees, a com-
    law has slashed the rate at which dividends are taxed. Before     pany that has a history of making regular dividend payments
    the tax cut, individual investors paid taxes on dividends at      is a good candidate to continue that practice. In addition, a
    their regular tax rates, which ranged as high as 38.6%. The       company that regularly increases the size of its dividend can
    table shows the new, lower rates.                                 be attractive since growing dividend yields enhance your
                                                                      investment’s total return.
     New Tax Rates on Dividends                                       Build a Diversified Portfolio. While dividend-paying stocks
                                                                      may deserve a place in your portfolio, don’t forget the impor-
      Tax Bracket               Dividend Rate
                                                                      tance of spreading your investment risk by spreading your
      Over 15%                  15%                                   investments among different asset classes. Diversification is
      15% or 10%                5%                                    critical to investment success.
     The 5% rate will be 0% in 2008. After 2008, tax                  Talk to Us
     rates revert to pre-2003 law.
                                                                      There’s no substitute for experience, especially when it comes to
                                                                      investing the money you’ve worked hard to accumulate. Come
    Thanks to these changes, investors will be able to keep much
                                                                      see us or call for more information on how our experienced
    more of their dividend income. (Certain requirements apply.
                                                                      Investment One Financial Advisors can help you choose the
    Contact your tax advisor for specific information on the
                                                                      investments that are right for you. Located at First National
    recent tax law.)
                                                                      Bank branches, Investment One can help you put together an
    What They Are and Why They’re Important                           investment portfolio that meets your needs. Call us at 964-8400
    Dividends are paid by publicly traded companies to their          or 888-916-8378 to set up an appointment, or simply stop by
    stockholders. Companies are not required to pay dividends,        and ask to speak with an Investment One representative. ■
    and many don’t. However, along with potential price apprecia-      *Standard & Poor’s. Past performance does not guarantee future results.
    tion, dividends have always been an important component of        **“Why Is the Dividend Yield So Low?” John B. Carlson, Federal Reserve Bank of
    stock returns.                                                      Cleveland; Standard & Poor’s.
                                                                      Neither PrimeVest nor any of its representatives may give tax advice.
    When comparing stocks, investors often look at a figure
    called “dividend yield.” This figure represents a company’s
    total dividends per share over the last four quarters expressed                                                   Not FDIC Insured
    as a percentage of its current stock price. The dividend yield                                                    No Bank Guarantee
    of the S&P 500 (an index of 500 large-company stocks) has                                                         May Lose Value
    averaged about 4% since 1945, though it has fallen over the       Securities and annuities offered                Not a Deposit
    past decade and currently stands at approximately 1.6%.**         through PrimeVest Financial                     Not Insured by any
                                                                      Services, Inc., an independent
                                                                      registered broker/dealer. Member                Federal Government
    Do Some Research
                                                                      NASD/SIPC. Insurance products                   Agency
    Before you decide to include dividend-paying stocks in your       provided through Investment
    portfolio, keep these points in mind.                             One Insurance Services.

6
                                                          Small Business Strategies




It’s Up, It’s Down — Doing
Business in Uncertain Times
Like many other owners of small businesses, you may have had to struggle hard to keep the lights on,
the machines humming and your employees fully occupied during the recent economic slowdown.
However, bad economic times don’t last forever. Will you be ready to take advantage of the opportuni-
ties that will inevitably arise once the economy recovers? What steps can you take now that will boost
your bottom line and help ensure future growth? Here are some strategies to consider.

Focus on Cash Flow                                                          Thanks to the recent recession, you may find that this is a good time to
Understanding how to manage your cash flow can help you survive             buy another business or add lucrative product lines at very attractive
down periods and position your business for future growth. Good cash        prices.
management means maximizing your cash flow at all times.
                                                                            Assess Your Needs
Start with your cash outflows (expenditures). If you automatically pay      Every recession creates a pool of available talented workers. If your
your bills as soon as they arrive, you are giving up an opportunity to      projections indicate that you will need additional employees to handle
earn interest on your cash reserves.                                                                            an anticipated upturn in business, it
Unless you get a discount for early                                                                             may be wise to start interviewing
payment, it’s usually better to pay                                                                             job candidates now.
your bills as they come due.
                                                                                                               If you need to replace or update
Consider using an automated
                                                                                                               equipment, check bankruptcy or
accounts payable system to organize
                                                                                                               other liquidation sales for deals on
your payments by due date.
                                                                                                               good quality used equipment. Be
To maximize your cash inflows                                                                                  sure to analyze your space require-
(receipts), try to reduce the time it                                                                          ments. Economic slowdowns tend
takes to convert a sale into cash.                                                                             to depress real estate prices and
Make sure your invoices are clear                                                                              rental rates, so this may be an ideal
and the due date stands out. Don’t                                                                             time to add needed space at a
wait too long before you begin                                                                                 bargain price.
pursuing accounts with outstanding
                                                                            Emphasize Customer Service
balances.
                                                                            Customers want polite and prompt service and resent being put on
Here’s another tip: By refinancing high interest rate debt, you may be      hold or having to wait. You can differentiate your business from the
able to lower your overall payments and improve your cash flow at the       competition by emphasizing superior customer service. If you can’t
same time. Plus, if you are thinking of expanding your business, current    afford to hire additional employees, focus on giving your customer
low interest rates make this an ideal time to borrow money to fund          service staff the training, resources and support they need to provide
your growth plans.                                                          customers with consistently positive experiences.

Strengthen Your Competitive Position                                        We Can Help
At the start of a recovery, customers who have delayed making pur-          First National Bank is the bank for small businesses. Our staff of experi-
chases may be ready to start buying again. Position yourself to get their   enced Small Business Bankers, conveniently located across the city, can
business by making more sales calls and increasing spending on adver-       help you succeed. From banking to loans to retirement planning, First
tising. Moving quickly to establish a strong position in the marketplace    National Bank is here for you. To learn more, visit any of our 20 loca-
now may give your business a head start on the competition.                 tions or call us at 341-0500. Outside of Omaha, call 800-228-4411. ■


                                                                                                                                                         7
First Equityline Makes Fall and
Winter Home Improvements Possible.
With rates so low, First Equityline                            line of credit allows you to pay down
has become a popular and affordable                            your balance at any time, which
choice among First National Bank                               means your unused credit is always
customers planning a fall or winter                            available. The savings can really
home improvement project. It’s also                            add up with First Equityline’s low
becoming the preferred way to pay                              variable rate, plus the interest you
off high interest debt, or pay for a                           pay may be tax deductible.**
winter cruise, ski trip, or even tuition.
                                                               Customers enjoy easy access
Unlock the value in your home.                                 and convenience.
First Equityline gives you the                                 First Equityline is so easy to use!
flexibility to borrow up to 100% of                            Simply write a check, or use your
your home’s equity.* This revolving                            First National Bank Visa® Check Card
                                                               when making a major purchase. You
                                                                                                                                    First Equityline is the key to enhancing
    IT PAYS TO REMODEL                                         can even view your account and make
                                                                                                                                    your home’s value, and so much more!
                                                               your payment online, absolutely free.
  Home                                 Return On                                                                                    Apply for First Equityline, or a low
  Improvements                         Investment              Start planning seasonal projects and                                 fixed-rate home equity loan today.
  Bathroom Remodel                          91%                purchases now!                                                       Visit any of our 20 convenient loca-
  Bathroom Addition                         81%                Whether it’s cooking in a new kitchen,                               tions or call a Personal Banker at
  Kitchen Remodel                           80%                entertaining in a finished rec room, or                              342.LOAN (5626) or 800.214.5160
  Basement Remodel                          79%                relaxing in a remodeled bathroom —                                   outside Omaha.
  Siding Replacement                        79%
                                                               * First Equityline offer refers to a line of credit secured by your single family owner occupied home. Offer applies to residents of
  Window Replacement                        77%                  Nebraska and Harrison, Mills, and Pottawattamie Counties in Iowa. Appraisal may be required at borrower’s expense. Additional
  Roof Replacement                          67%                  fees and closing costs are at borrower’s expense. You must carry insurance on the property that secures this line. New Money
                                                                 Only. Subject to credit qualifications. Some limitations will apply. Consumer lines of credit only. Approval and terms subject to
  Realtor Magazine’s 2002 Cost vs. Value Report; average         credit qualifications.
  return on your investment national average
                                                               ** Consult your tax advisor regarding the deductibility of interest and potential tax savings.




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      Omaha NE 68197                                                                                                                                      FIRST NATIONAL BANK
                                                                                                                                                                OF OMAHA




                                                            24 Hour Banker                           Account AccessLine
     First National Online                                                                                                                              Bank Locations & Hours
                                                           341-RATE (7283)                           342-BANK (2265)
Visit www.firstnational.com                                                                                                                               341-HOUR (4687)
                                                            800-642-0014                               800-444-2719

				
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