Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

The Evolution of Real Estate Investing

Posted By |
Image by Pixabay

By Emma Williams

Special to the Financial Independence Hub

An insight into the modern methods of real estate that is much more accessible and inclusive!

We have now shifted from steel locks to smart locks in our homes, but for a long time, the conventional real estate systems continued functioning with similar patterns. One of which is real estate investments.

Real estate investment involves the purchasing and sale of a real estate asset for rental profits or market returns. Historically, this investment has yielded better and continuous returns for investors. However, a major roadblock to this remained its accessibility and high barriers in terms of capital and liquidity. For a long time, this segment was exclusive to a specific niche.

However, with modern instruments and advanced innovations at hand, real estate investment has the potential to widen its range. Through these new models, the potential of real estate investment has entirely been transformed.

Let’s take a look at the future of real estate investment with such modern innovative tools.

Investing With REITs

Image by Pixabay

Real Estate Investment Trusts (REITs) are one of the techniques that has made property investments accessible to a certain extent. With REITs, individuals invest in companies that further deal with real estate investments. In return, shareholders receive dividends in proportion to their investment share in the company.

With REITs, instead of directly investing in real estate an individual would invest in a company that has invested, in part, in real estate. The company then offers dividends through its rental income to its stakeholders. Any investor can hold shares and indirectly become an investor in a real estate asset. This eliminates the need for high capital needed in a traditional system. Continue Reading…

The Ultimate Work-Life Balance: building a business from Home

Posted By |
Image via Pixabay

By Jim McKinley

Special to the Financial Independence Hub

For those individuals with an entrepreneurial streak, building a business from home could be the perfect launching point for a new career. Not only will you have the luxury of eliminating your commute, but you’ll also have complete control over when and how much you choose to work. While you may have the perfect idea for a home-based business, there are some steps you need to consider as your ideas take shape.

Turning your idea into Reality

Building a business from scratch is exciting, but it certainly isn’t a walk in the park. While the creative process is fun and necessary as you form your ideas, there are some steps that will help you establish yourself as a company.

Be sure you know the essentials when you start, such as getting a business license and setting up a website and email address. Learn what you can from your local Small Business Development Center (SBDC); often, you can qualify for free small business consulting if you’re just getting started. Take time to educate yourself about taxes, and think about how you’ll manage bookkeeping and accounting.

Along with the admin, you’ll want a bulletproof business plan. What do you want to accomplish with your business? How do you see it growing in the coming years? By making a solid plan, you can start goal setting and really get the ball rolling.

How to grow: hiring remote workers

Most successful companies all have one thing in common: they understand that it takes a team to pull off something extraordinary. As you think about growing your business, consider how you might recruit remote workers to join you.

Be sure to craft an honest and compelling job description. Most remote workers value flexibility, so consider how you might portray the position in a way that would appeal to qualified candidates. Post to online job boards, and consider perusing LinkedIn to see if you can recruit someone with the right background and skills.

Managing your Team

Luckily, there are several online platforms and tools designed to keep remote teams connected. For example, Slack is a great option for ensuring good communication. Through Slack, it’s possible to create both team-wide and project-specific channels to help manage concurrent conversations. The platform also allows for a newsfeed, which you can use for updating the entire team with important information. Continue Reading…

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

Posted By |

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…

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

Posted By |

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 Pros and Cons of Mortgage Forbearance during the Pandemic

Posted By |

By Holly Welles

Special to the Financial Independence Hub

Millions of Americans have lost their jobs, experienced furlough and applied for unemployment during the COVID-19 pandemic. As a result, many are struggling financially, and some must even choose between buying food to feed their families and paying the bills. If you find yourself in the same predicament, you may wonder how you’ll be able to afford your mortgage payments in the coming months.

While rethinking your budget may help you scrounge up a few extra dollars here and there, it likely won’t be enough to pay your mortgage without a steady stream of money coming in. If you’re unable to make payments any longer, mortgage forbearance may be the route you need to take. Here’s what you need to know as you pursue this option.

Pros of Mortgage Forbearance

While mortgage forbearance shouldn’t be your first option when seeking financial assistance, it can be helpful, especially as you cope with short-term financial emergencies. Here are a few advantages of pursuing mortgage forbearance.

1.) Suspends mortgage Payments

If and when you agree to mortgage forbearance with your servicer, they will likely temporarily defer your payments for a specified period or allow you to skip some. This setup will help you avoid foreclosure or damaging your credit score.

Most importantly, a temporary suspension of payments gives you time to find a job, recover from the pandemic and begin saving money and eventually making payments again.

2.) Protection under the CARES Act

Under the CARES Act [in the United States], homeowners can receive certain protection benefits if they have a federally backed mortgage. One such benefit is that your lender or servicer may not foreclose on you until June 30. Another advantage includes having the right to request mortgage forbearance for up to 180 days, plus an additional 180-day extension.

Moreover, lenders don’t require documentation proving you qualify for forbearance. Speak with your servicer and answer a few questions about your financial hardship to qualify.

3.) Better Alternative to Foreclosure

The alternative option to forbearance is foreclosure: which often goes hand in hand with bankruptcy. This combination can easily sink your credit score for years and result in months, and even years, of legalities and paperwork. It’s also incredibly expensive for lenders to foreclose on a home, so allowing borrowers forbearance is a more affordable option.

Cons of Mortgage Forbearance

All of those benefits may make mortgage forbearance sound like a great deal. However, there are consequences to pursuing this option, even if it does solve your financial problems in the short-term.

1.) Possible Credit penalties

Pursuing forbearance during the coronavirus pandemic should not affect your credit score. In fact, the CARES Act states that no negative credit reporting or late charges will occur during your forbearance agreement. However, credit penalties and dips may still happen as your lender reports your account information to credit bureaus. Continue Reading…