All posts by Financial Independence Hub

Renting out your Home: Here’s what you need to remember

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By Rebecca L. Clower

Special to the Financial Independence Hub

There are many valid reasons why a house is to be rented. Maybe you don’t have to sell to buy one, and you could like to maintain it as a property for your investment. If they purchased the property, the rental of the house could have been your plan.

Other homeowners may still have to rent because they’ve got to move and can’t sell yet. Perhaps they were transferred by an employer and realize that they can’t sell their house because the present market is only not suitable for home sales. Sellers of submarine homes would prefer not to sell in the short term and could choose instead to ride the marke

There is, in all cases, a correct and incorrect way to lease your property. Although some errors may be minor, others may be much more serious. At Tamarindo Real Estate | Costa Rica Real Estate and Rentals, any errors are corrected to provide the best experience.

How to prepare your Home for Rentals

On the downstream market, the rental of the house is probably not going to get away. The tenants at these times are more careful and more selective because of the increased availability and the expectations of rentals.

Make sure the equipment works and is in good health for your new tenant, by thoroughly cleaning your home. You can secure this area from the rest of your home if you have decided to rent a room or a place in your house.

When the house is straightened out, develop a list that describes what it is attractive to put on the market. Take note of the features you want commonly such as washing and drying facilities, air conditioning,g and garage. To “sell” the property, use the rental conditions.

Next, post a home ad on renowned websites and in local journals. Furthermore, some real estate agents will help owners rent out their homes, though if the agent finds you a renter, he or she will make a commission.

Alternatively, you can employ a property management firm, but you have to pay for them. You have to rent a house. The costs vary by company but often vary between 8% and 10% of the monthly rent, and additional charges may apply.

It may seem like a simple task to transform your home into residential property. Still, it is important that you talk to real estate lawyers and accountants to see to it that you comply with tax law, zoning regulations, and local property rules.

Know what costs are tax deductible

It is essential to know exactly what costs are deductible. You can qualify for taxation deductions. Also, there are limitations as to how much you can deduct annually and how much you can deduct may differ from the rental activity in your tax return. Continue Reading…

Small Business owners are subsidizing big Insurers during Covid

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By Robert J. Crowder

Special to the Financial Independence Hub

Small owner-managed businesses ravaged by Covid-19 are subsidizing big insurance companies during this pandemic and don’t even know it. In many cases, they have been paying for several months the full cost for employee health and benefits plans while all or most services are no longer provided. And if they are now starting to get a reduction in premiums, it’s not enough.

Since mid-March, dentists and other professional healthcare providers such as chiropractors, physiotherapists and massage therapists have been shut down, with the exception of emergency treatments. But small businesses continued to pay full benefits premiums while their employees didn’t use these services.

The numbers tell the tale

The value of premiums paid during the coronavirus pandemic has been truly staggering. Three-quarters of Canada’s 600,000 small businesses have employee benefits plans and over the past three months they paid out approximately $1.6 billion in premiums for benefits coverage at a time when virtually no services were provided. Keep in mind those same businesses and the business owners were suffering because of Covid.

Using claims data since the pandemic began (representing thousands of Canadian small businesses), it is clear that the number of claims for health and dental services is down 50% with some components of benefits plans, such as dental visits, down as much as 95%!

A real-life example

Let’s take an actual owner-managed small business, a distribution facility with 25 employees. The owner pays $9,500 per month in premiums for an employee benefits plan with a major insurer that includes comprehensive health and dental coverage. As the Covid crisis unfolded in mid-March, company sales plummeted dramatically and customers held back payment, causing an acute cash crunch.

As the crisis deepened, the owner was able to reduce non-essential expenses and negotiate a reduction in rent. Benefits represented a major part of expenses but actual usage came to a halt for dental and paramedical services. The owner asked his insurer to temporarily pause unused coverage in order to conserve cash, which would have meant a savings of over $6,000 per month, but was told it wasn’t possible.

By mid-June the company had paid out almost $20,000 in cash during a crisis when not a single employee had been to visit a dentist, physiotherapist, massage therapist or any other practitioner covered under the benefits plan.

Too little, too late

Thus, most small businesses paid full premium for their benefits plans in March, April and May, and only in June did some start to see any credit from large insurers, some of which are now offering future credits to mitigate lower numbers of claims. More on this in a moment. But still, that is $1.6 billion of unnecessary premiums that small business owners could have used to stabilize their businesses and keep people employed during the height of the crisis when their cash flow was severely impacted. Continue Reading…

Spousal Loans: Loan money to your spouse, save on your tax bill

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By John Natale

Special to the Financial Independence Hub

Canadians often consider tax-saving strategies on an individual basis but don’t consider how their families can also contribute to lowering the tax bill. While often overlooked, family tax-saving strategies are effective and legitimate ways for households to save big on tax dollars each year.

The Canadian government recently announced the reduction of its prescribed interest rate from 2% to 1% starting on July 1, 2020 – the first time the prescribed interest rate has been this low since April 2018. For Canadian families, this represents a significant opportunity to make a loan directly to family members or where minors are involved, to a family trust, and use this income-splitting strategy to their advantage.

How does it work?

If you loan your spouse money for the purpose of income-splitting, the prescribed rate (the rate of interest you charge your spouse) remains fixed for the term of the loan. Through this tax-saving strategy, that many may not be aware of, transferring income from a high-income earner to a family member in a lower tax bracket allows Canadian families to pay less taxes overall, potentially saving hundreds or even thousands of dollars per year.

Although the Canada Revenue Agency (CRA) restricts most forms of income-splitting, there are legitimate ways to split taxable income with a spouse or minor child such as this strategy. Provided the loan is properly structured, the loan proceeds can be invested by the spouse receiving the loan, with the income taxed at their lower marginal rate.

Of course, one of the keys to a successful income-splitting strategy is to ensure that investment returns are higher than the interest rate charged on the loan: so keep that in mind when choosing your investment.

A real-life example

Let’s suppose spouses Jack and Jill are looking for ways to lower their family tax bill. They are in different tax brackets, Jack at 48% and Jill at 20%. Jack loans Jill $100,000 at a prescribed rate of 1%. Jill invests the money and earns 4% – or a total of $4,000. She then pays Jack the $1,000 loan interest and deducts the same amount as “loan interest expense.”  Jill pays $600 in tax on the remaining $3,000, and Jack pays $480 on his interest income. Continue Reading…

The advantages of taking out Online Installment loans

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By Bobby Orlando

For The Financial Independence Hub

Not all people are fortunate to have enough cash to cover emergency expenses. Sooner or later, you’ll probably deal with unexpected fees, such as for repairs and other situations that require immediate use of money. 

Although there are many options that can help you obtain money, some might just place you in further financial distress because you can’t afford to pay off the entire loan in one lump sum. To remedy this situation, an online installment loan can come to the rescue.

Below are a few top advantages of taking out online installment loans from the get-go:

What is an Online Installment Loan?

Primarily, an online installment loan refers to an amount of money borrowed for a specific purpose, and which must be paid back within the specified timeframe, usually through installments or monthly payments. However, it’s important to note that the amount of money you borrow and the terms of your repayments might vary depending on your personal qualifications, such as the type of loan you choose, your monthly income, and many more. 

Unlike other types of loans, it has a salient feature, which is the fixed interest rate. This means that the interest rate added to your loan is already set and will not change throughout your loan contract. 

Thus, if you consider getting an installment loan online, do your research first to make sure you choose the right loan and lender for your financial needs. Even if you need fast cash, you should find time to assess your options and make the right decision. So, to help you with your research, reliable websites, like Personal Money Network, can be an excellent source of information about installment loans offered online. 

Online Installment Loans: Top advantages of taking one out  

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Now that you know what online installment loans are, it’s time to explore how acquiring one can benefit your financial needs. So, if you’re searching for the best way to obtain cash without breaking your wallet, below are the advantages of taking an online installment loan you need to know: 

  • Easily Accessible

Typically, an online installment loan is one of the best types of loans of which you can avail. Compared to other loans, it’s easily accessible because anyone is open to apply. As long as you fulfill the basic qualifications for the loan, you can apply and get approved within the fastest time possible. 

Also, getting an installment loan online means you can take advantage of unsecured access to loans. This means that you don’t need to provide collateral before your application gets approved. Most lenders offering these loans are more concerned about having a stable source of income as one of the essential qualifications. Therefore, if you want easy access to this type of loan, make sure you meet the requirements set forth by your lender. In doing so, you can obtain a loan that will work best for you.  

  • Quick Application Process

When you take out an installment loan online, you don’t need to fall in line and wait for a few days for the result of your application. Just fill in an application form on their website and submit the requirements. The lender will, then, check your application form and notify you once you get approved for the loan. 

Ideally, getting this type of loan online is fast and easy because you don’t have to set an appointment or work around office hours just to get yourself accommodated by the lender. That’s because online loan applications can be made 24/7. All you need is your computer and a good Internet connection to get started with the application process.  Continue Reading…

The need to pivot: Covid-19 as a Fire Drill for Retirement

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By Darren Coleman

Special to the Financial Independence Hub

If you’ve been playing Lingo Bingo during this Great Disruption, then the word “Pivot” must occupy the centre square on everyone’s playing card. It is simply the business word of 2020 and it means a fixed point on which things oscillate or rotate. It’s a term commonly used in sports like basketball or football when a player stops rapidly and then moves in a different direction. And we use it because in order to keep moving our businesses forward right now we have to do precisely that.

For me the first few weeks of the pandemic felt like some kind of weird reverse camping trip. Why? We had to make due with limited supplies, were in familiar yet oddly strange surroundings, and likely didn’t have enough toilet paper. Fortunately, family and friends were safe, everyone was home, and we mostly had to contend with a series of inconveniences rather than anything really serious. I appreciate this has not been the case for a great many.

Back to business. Or rather, back to trying to figure out how we’re going to keep doing business because so much has changed. My staff and I were working from home, trying to create new processes and procedures, making sure our remote systems were 100%, and trying to source everything from new computer headsets to home office chairs and other items so we could remain productive. My focus, as leader of a large and successful wealth-management team, was to keep everyone functioning at a high level and ensure clients were engaged since they too were going through a unique and challenging experience.

In short, we had to pivot.

Walking with Charlie: a video blog

One of the best things I did throughout all this was walk my dog. Everyone needs to take a break when working at home, so I would take my dog Charlie for walks. One day I decided to bring my GoPro with me. I would use the great trick of YouTube (which is to create what I call “mass intimacy” and talk to many even though it feels like I’m talking only to you). It would allow me to share my thoughts and comments with our clients and professional network.

This video blog was intended to be a bit of fun, and a way to stay in touch with clients quickly and efficiently. What with COVID I wanted to lighten the mood and also provide a philosophical framework for how we are thinking nowadays, and how we are processing the changes all around us.

In my first video, I encouraged viewers to find positive changes they can make while in lockdown. Instead of binge-watching Netflix, perhaps they could attend to those chores they’ve been avoiding or take up projects they’ve been putting off. Maybe organize the photo albums or learn to play the piano, for example. The point was to keep people moving in a positive direction to counter all the negative news flow we are experiencing.

It’s my belief that this pandemic is a health crisis for some: and a financial challenge for many more. In later videos, I discussed a variety of topics, such as how to be a better consumer of news, and how to handle the financial hitchhikers we encounter in life. I also provided some education as a way to increase financial literacy by sharing cash-flow budgeting techniques, along with key questions you should ask of your professional advisors. Continue Reading…