Sunday, February 18, 2018

4 Financial Plans You Need to Have down When Starting a Family

The decision to start a family is a big one, and whether the decision is a deliberate, well thought out one or a sudden one, there are some plans you should get into place. Families can be expensive, and planning ahead can help ease the burden. Here are four financial plans you should have in place when starting a family.

Maternity and Paternity Leave

You need to look at your state’s laws and company policy regarding leave for having a baby. Do you get time off? How much time? Is it paid or unpaid? Can you use vacation, sick time, or short-term disability to supplement the time off or the possibly lost income? 

This information is important to help you figure out your budget not only for the weeks after the baby’s arrival, but for the whole first year.

Start or Add to Your Emergency Fund

An emergency fund with no less than three to six months’ worth of expenses in it is critical to ensuring that your family can stay on financial track. If you don’t already have an emergency fund, now’s the time to start it. 

If you do have one, but don’t have enough, add to it now. Even if you already have three to six months in it, consider adding more. Babies can be expensive, and it’s better to be over-prepared than under.

Meet with a Bankruptcy Lawyer

After the baby arrives, you’ll have new expenses: child care, baby clothes, baby food, and more. You may want life insurance on your baby, or to increase your own. You may also want to look into disability insurance, start or add to your retirement fund, or start an education fund for your new addition. 

If you’re already in debt though, these plans can seem unreachable. Meeting with a bankruptcy lawyer can accomplish a couple of things. One, they can help you file for bankruptcy if that’s the right option for you. 

Second, depending on the types and amount of debt, they may be able to help you come up with a plan to pay off your debt without filing for bankruptcy that still puts you in a better financial position.

Write or Adjust Your Will

Once you have a child, everything changes. You’ll want to make sure that your child is cared for after your death, particularly if it happens sooner and more unexpectedly than you’d like. 

Making sure that your will is up to date to reflect your wishes regarding your child’s guardian(s), as well as how you want your estate distributed, will make things much easier on those left behind.

Starting a family is a beautiful time for most couples. A few easy financial tweaks can ensure that it remains a beautiful time, rather than becoming a stressful, worrying time.

Saturday, February 17, 2018

Stocks or Not? 3 Major Methods of Investment and How They Work

If you’ve read much financial advice, you’ve probably heard at some point that the key to prosperity is making your money work for you. One of the most common ways to do this is to invest your money, but this isn’t as simple as it sounds, because there are many methods of investment out there. Here are three of the most common and how they work.


The stock market is what usually comes to mind when people think of investing. With this investment method, you’re buying one or more shares of a company. If the company’s value increases and its stock price goes up, then you’ll make money, and vice versa. 

Although the stock market’s overall value tends to go up over time, plenty of companies fail, meaning it’s important not to risk too much on unestablished companies. 

Another way to invest in stocks is to choose an index fund that encompasses a variety of companies. This makes it easier to build a diverse portfolio and reduce your risk of losing all your money from one company tanking.

Real Estate

Real estate investing is another popular investing method, and there are multiple ways to make money from your real estate. The simplest is to purchase real estate and wait for the value to increase. 

You’ll then have a more valuable asset then you originally purchased, and with a mortgage, you can get the leverage to buy real estate worth much more than you have saved up. 

You could also purchase real estate, and then rent that property out. Not only will you own the property, but you’ll be making money from it.


Commodities cover a wide range of raw materials. These include gas, oil, agricultural products and precious metals, such as gold, silver, and platinum. Precious metals are popular because it can be purchased easily online from businesses like Rocky Mountain Coin in different forms. 

Although commodities are often volatile, they offer a way to diversify your portfolio, and there’s the potential for high returns if you purchase a commodity that comes into high demand. 

That volatility can work against you, though, and it’s important not to let any major swings in your commodity’s value scare you and force you into rash decisions.

Investing may be the wisest financial decisions you make. No matter which of the options above you select, make sure the bulk of your portfolio is in lower risk investments that should deliver a steady return on your money.

DIY Metal Buildings: 5 Things You Should Avoid In the Construction Phase

Using a steel building kit for your construction project in Denver has many advantages. Aside from allowing you to set up your frame easily and quickly, it also enables you to meet project timelines earlier. Whether you already know a lot about putting up steel buildings or have just started bidding on related projects, the key is to ensure that whatever is erected stays there for a long time. 

As with any construction job, there is a right and wrong way to do things, even with pre-fabricated building systems. Fortunately, you do not have to be a construction expert to get the work done. 

With the help of easy-to-follow and detailed plans and diagrams, a manual, and some friends, you can take the DIY approach to finally getting that carport, hobby shed, garage, or barn erected. 

Of course, then the project becomes more complex, you will need the support of an experienced and licensed contractor to ensure that everything is in order and all quality and safety guidelines are met.

But let's focus on the small projects for now. Here are 5 things you should avoid doing when working on DIY metal buildings.

1. You forgot to secure the proper permits

Building ordinances differ in every city so be sure to check first if there are Colorado permits that need to be secured or paperwork complied. Better if you find out there's nothing you need to do early on than to have your project halted midway because you're violating a local law. 

Some building quotes also offer assistance for securing permits, so check with your service provider about this, as well.

2. You ignored safety procedures

Metal building kits come with a manual. Follow the book and never just "wing it," no matter how much of a carpentry expert you think you are. Or you can have it prebuilt at the place where it was purchased so it arrives ready to be set up. 

As a DIYer, you probably do not have enough professional safety training. Take some time to read resources online about job site safety tips. These include clearing the jobsite of any debris that might obstruct workflow or pose a threat, applying fall prevention procedures, and readng the instructions that came with the kit.

3. You did not prepare the soil or pour a foundation

You can't just erect structures anywhere and the ground has to be tested and prepared prior to construction. At the least, make sure that the surface is level and any debris or large rocks are removed. If you are building a large structure, the soil needs to be tested and amended. Much bigger projects require for foundation to be poured.

4. You tampered with the pre-built model

Metal building kits are already pre-measured and cut before they are delivered to your job site. That means all you need to do is to assemble them. Resist the urge to shorten or cut any part, particularly the primary elements, if you notice that the structure is not level. Instead, refer back to the kit's manual and find out if there's a step you might have missed during the preparation process. You can also call the manufacturer to help you identify where the error might have been. Tampering with the parts exposes you to risks for accidents and injuries.

5. You didn't install the fasteners correctly

Going back to the importance of following what's on the manual exactly, the correct setup of fasteners is crucial to the completion of the entire system. It's really a simple process, if you think about it, but a lot of things can go wrong with a mere mis-fastened bolt. Make sure that you use the correct drives and tools to complete the assembly and tath every unit is installed tightly.

When setting up Great Western Buildings of Denver, Colorado, the most basic advice is to follow the erection manual. If you have any questions, call the service provider immediately to clarify. The company will be your best resource to making sure that structures are built flawlessly.

Friday, February 16, 2018

Getting Older? 4 Financial Plans You Need to Have in Place

A part of getting older is planning for your retirement. You need to have financial goals to help you get where you want to go. Here are some financial plans that you need to have in place.

Set a Realistic Budget

A budget will allow you to live within your means. You need to take a hard look at where your money is going. Determine if there are any areas that need some work. If you are living paycheck to paycheck, you need to reevaluate your lifestyle choices. 

Retirement will be difficult if you don’t have a nest egg set aside. Figure out how much money you’ll need to have in order to live comfortably. Have a little extra left over in your budget. Set this money aside for any unexpected expenses.

Work Towards Debt Elimination

Debt can be crippling if you don’t have a steady income. You would have more wiggle room in your budget if you didn’t have to pay off your debt. The best way to eliminate debt is to pay more than the minimum each month. 

Consider how much money you are losing just paying the interest. This money could be better spent somewhere else if you were able to eliminate your debt load. Look at creative ways that you can pay off this debt.

Keep Health Insurance in Mind

Many people have health insurance through their employers. Once you retire, this will be an added strain on your budget. Schedule an appointment to talk to a lawyer about medicaid planning

They can help you through this process so that you can still have health coverage. As you get older, medical treatment becomes more necessary. Not having insurance can leave you saddled with major medical bills. 

This can quickly eat up any money that you have set aside.

Invest in Retirement

There is still time to start saving for the future. Take advantage if your employer offers a 401k. You have other means of starting a retirement account. Traditional IRA and Roth IRAs are also available. 

These will allow you to put money away for your future. As you get closer to retirement age, you can put more money into these accounts. This will offer you a preview of what it will be like to live on more limited means. Then you can adjust your lifestyle as needed.

You need to create a financial plan in order to prepare for retirement. You may need some assistance in developing your plan. Use the tools that are at your disposal.

Thursday, February 15, 2018

How to Know Which Loan is the Best Choice for You

Unfortunately, life doesn't come without the occasional need for extra cash due to an unexpected expense. It may be a leaky pipe that burst while you were at work, high medical bills or an engine that quits on your car. 

Whatever the emergency, you need money now. The good news is that whether your credit is good or poor, there are many ways to acquire the money through different types of loans. 

In some cases, it depends on what you need the money for, for example, college costs for your kids or a remodeling project.

Poor or No Credit

The hardest part of having no established credit or poor credit due to late or missed payments is that your options are limited when it comes to borrowing money. 

It wasn't too long ago that you either had to borrow from your family or pay extremely high-interest rates through payday loans. Luckily, today there are lenders such as that base their loans primarily on whether or not you have a job, a checking account and are a citizen. 

This makes it easier to take out a short-term loan with monthly repayment terms, allowing you to take care of the unexpected expense.

A Personal Loan

If you have good credit a personal loan from a bank gives you a way to acquire money to take care of your unexpected expense. This type of loan allows you to borrow $10,000, $20,000 or even $40,000 to cover a major repair. 

Since they are unsecured, there is no collateral required so you won't have to put your home or your car in jeopardy. You can acquire it from either a bank or a credit union and the repayment terms work much in the same manner as a mortgage wherein the payments are fixed and the loan is not open-ended, meaning there's an end date.

Student Loans

The stress of coming up with the money to send a child off to college can take away from their achievements. Luckily there are several ways to acquire the money including a private lender or a federal loan like the Stafford or Perkins. 

The government loans are more popular because there is no collateral needed to acquire them. These loans also have lower interest rates and a deferment period of up to 6 months after your child graduates college before you need to begin repaying the loan. 

Plus, if your child attends multiple schools before graduating, you can consolidate them into a single loan. Private lenders offer student loans as well. Unfortunately, they base their approval on your credit history. 

In most cases, they also have a higher interest rate and there is no subsidizing so you can owe money on a loan before your child actually graduates college. While they do offer deferments, they are limited and less likely.

A Home Repair

If you own a home and have equity in it and need a major repair like a total replumbing job or are in need of a new roof, applying for a home equity loan can help you get the money you need. 

This type of loan allows you to use the equity you have available based on the value of your home in the current market. Since the bank uses your home as collateral the criteria are less stringent than acquiring a personal, unsecured loan so even if you have a few blemishes on your credit report, the chances are better that you will get an approval. 

In addition, other advantages are that the interest rates mirror that of a mortgage, you can borrow a larger amount and since it's a home equity loan some of the interest is tax deductible. 

Another big advantage is that you can use the money however you want to without the need for disclosing it to the bank and thus needing their approval.

Life can throw you curves from time to time. Luckily, whether you have excellent credit or poor credit there are many ways to acquire the funds you need to make necessary repairs, acquire the funds for college or pay off expensive medical bills.

Wednesday, February 14, 2018

4 Ways Moms and Dads Can Save Money on Their Monthly Budget

Budgeting isn’t always simple. It can be especially hard for mothers and fathers who are trying to raise families. Costs for kids can add up rapidly. Parents have to take all sorts of factors into consideration. 

These include meals, recreational activities, entertainment, and school supplies. If you’re a budget-conscious parent who wants to save money each month, take note of these budgeting tips.

Purchase Aftermarket Car Parts

Parents have to take their kids from point A to point B. You may drive your youngster to soccer practice several times a week. You may drive all of your kids to and from school each morning and afternoon. 

That’s the reason car issues are practically inevitable. Parents should always set aside money in their monthly budgets for problems. If your car needs repair service, you can save money by purchasing used car parts instead of OEM (Original Equipment Manufacturer) parts. These replacement parts are usually just as durable as the originals.

Focus on History

History doesn’t always have to repeat itself. If you feel regret any time you think about your recent money use, give your latest bank statement attention. This can give you insight into where all your hard-earned money went. 

It can also help you steer clear of making the same frustrating errors. You may realize that you went to restaurants too often. You may realize that you had too many weekend shopping excursions. History can teach parents invaluable finance lessons.

Become a Warehouse Club Member

Feeding a growing family can cost a pretty penny. That’s why wise parents should always search for ways to minimize their monthly grocery shopping costs. If you want to save big on meals, snacks and more, then you should think about signing up for a warehouse club membership. 

These require initial membership fees, but they generally end up paying for themselves quickly. Bulk purchases can help moms and dogs save mega money.

Steer Clear of Excess

Parents who want to save money should try to steer clear of excess. Do you have an online video streaming subscription you never use? Cancel it. Cutting down here and there can help you reduce your monthly costs dramatically.

Healthy families are all about clear communication. If you want to save money as a family, make sure everyone is in on the plan. Try to make saving money a fun bonding experience for everyone.

Tuesday, February 13, 2018

5 Money Habits That Will Keep You Out Of Debt

Keeping yourself out of debt is not easy. Saving money might seem like a piece of cake but managing your debts requires a strategy and a workable plan.

You will find lots of things that attract you towards unnecessary expenses like recreational activities, impulse buys etc, and if you don’t have a control over it, then you might end up sliding into debt.

Money is the most important factor that controls our daily deal with the amenities of life. You need an adequate monetary income for your present and some savings for the future.

The main factor that plays a role to have a healthy balance between your monetary flows is money management, which will help to create a handful savings for your future.

Let us have a look at the 5 important finance planning tips that can bring a considerable change in your account balance at the end of the month: 

1. Create a Budget with goals but know your numbers as well!

Creating your own budget is an essential factor that will give you clarity to manage your finances.

So, how to create a budget?

A budget should be created based on your life goals and not numbers. This budget will play a vital role on deciding how much you need to save at the end of the month. Few points to ponder before you create a budget:

  • List down your life goals like buying a home or a car, a holiday plan etc. 
  • Divide the goals based on priority as: short & long term goals. 
  • Set a tentative (or if you the exact) amount with each category you listed in your goals 

Now that you have a budget with a amount set for each category, you will have the exact figures to save on a monthly or yearly basis.

2. The curse of credit card

Sounds a little weird? Many of the credit card holders have lost the peace of their life for the improper handling of credit cards. It is important to spend only the amount which you can pay-off in a month or two. Else, you will end up paying for huge interests.

Dos & Don’ts when it comes to credit cards:

i. Optimize the usage of credit cards: You have to control your shopping habits and the usage of credit cards as well, rather use debit cards for all possible purchases.

ii. Go for cash: Try to use cash for all purchases so that you will have a track of your expenses.

iii. Use when it calls for emergency: Use it when it is utmost necessary but before you swipe your credit card, think if you could pay off the amount within the first month.

iv. Beware of the interest rates: If you keep the amount unpaid for few months, it will destroy your budget with several additional interests and charges on unpaid amounts.

v. Offers & deals: Watch out for the fake deals that might end you up in huge dues. Do not accept offers from every credit service provider and glance through every terms & conditions before you opt for one. There might be hidden clauses on interest rates and the dues which you will not notice and pay for it later.

3. Groceries- Seasonal - Sale

These 3 words are interlinked for sure! When it comes to buying groceries, keep in mind the two important terms:

  • Sale or special offers 
  • Seasonal veggies & fruits 

Try to grab as much offers and deals as possible. This will help you to save some extra money on your groceries. Go for seasonal fruits & veggies as it is both healthy and less expensive. 

4. Change is good!

Change is actually good but not that easy. You might be adapted towards the way you do things such as your shopping habits and if you are willing to change a few things, then you will see fruitful results. It is important to know in detail about your expenses and savings. This will give you an insight of where you can cut down your expenses and where to save more. 

5. Organize your bill payments

One key step to keep yourself out of debt is to organize your bills. You might be baffled that how can organizing your bill payments help to keep you out of debt. Actually, it does.

Organize your bill payments by listing as – paid, unpaid, to be paid urgently etc. It gives you a workable plan to manage your bill payments and thus keep you out of debts since you would have cleared all dues by following your plan. You can even set a reminder in your cell phone or laptop to clear bills. There is an option of automatic payment which you can opt, for the regular bills.

When you pay your bills on time and you have some savings on a regular basis, it gives you a sense of accomplishment. It all depends on you to manage your finances well to enjoy the positive outcome. Hope you will embrace these 5 money habits and keep a track of your payments & dues to keep yourself out of debt.

James Paul is a personal finance blogger who write at Basic Finance Care covering everything about personal finance management and frugal living.

Sunday, February 11, 2018

How to Get the Most Money Out of Your Old Coin Collection

There are many different types of coins out there. If you are a coin collector, there is enough out there to keep you busy with your hobby for a lifetime. However, you may not just be collecting coins for the sake of a hobby. 

You may eventually want to get some money out of them. When you acquire a coin collection, you may not know how to go about selling it to get the most money possible. Here are a couple of tips to get the best deal when selling your unique coins.

1. Take your Time

Like most things, you must take your time when selling your coins to get the best deal. Expect the sale to take anywhere from 45 - 60 days, if not more. 

If you are in too much of a hurry to sell, you will end up losing out on your money. You also want to wait until the right time to sell your coins, and this might mean waiting until some of the most popular auctions in January and late summer. 

The bottom line is that you want to make sure you get the most money out of your coin collection.

2. Get an Appraisal

Before you go to sell your coin collection, you must know what each collection is worth. You will also want to know what each individual coin is worth on their own in case you want to sell the coins individually. 

This way you can know what to expect when buyers come knocking. This also gives you an idea of where to start your pricing to leave room for negotiation. It may cost a small price, but it's worth it to call an appraiser and pay for your coins to be appraised by a professional. 

You should be able to make this money back once you sell the coins anyway. There are a lot of factors that determine the cost of a coin including:
  • rarity 
  • mintage 
  • demand 
  • condition 
  • melt value 
  • full collection 

3. Take your coins to AM Auction

Auctions are one of the most popular ways to sell rare coins. However, they can be somewhat confusing if you're not used to the process. Luckily, you can get help by going to a business like Harlan J. Berk, LTD in Chicago, IL. 

They even offer professional auction representation to get your coin into the most popular auctions, thereby getting the most money possible for your coin collection.

4. Find Complete Sets

Complete sets will always be worth more than just individual coins. This is also true for incomplete sets. If you can complete the collection, it will always be worth more than not. 

Talk to your appraiser about how much more your collection could be with and without the missing pieces to determine if the effort in getting the complete set will be worth it. Then do your research to see if you can find the missing pieces to that collection. 

You also want to make sure they are reasonably priced in order for you to complete it too. If you are planning on turning around and selling your collection, keep in mind that you should be able to make that money back once you are able to sell the set.

Not only can older coins be extremely valuable in certain cases, they can also teach us a lot about history and culture. That is not something you can put a price on at the end of the day. Plus, it's fun to go through the selling process- especially when you make more than intended.

Saturday, February 10, 2018

Broke & Broken? How to Afford a Personal Injury Case

Even if your personal injury case seems relatively straightforward, these legal proceedings can become extremely complex in the blink of an eye. 

Many victims accept unfair insurance settlements simply because they believe a civil case will be too expensive or time-consuming. 

Here is a look at a few steps that you can take to make sure that you receive a fair settlement in or out of court.

Understand Your Rights

If you were injured because of someone else’s carelessness or negligence, then you deserve compensation. Depending on where the accident took place, you might receive compensation even if it is determined that you were partially responsible for the accident. 

Spending a little bit of time researching your rights and responsibilities could end up saving you a tremendous amount of time and money later on. You should be able to find free legal resources online, at a local DMV, or at the county courthouse.

Start Keeping Records

Every bit of information that is pertinent to your injury must be saved and kept in a safe location. That data will be invaluable to your legal team as they create an airtight case for the trial or mediation process. 

Your team will need information such as the names of everyone involved, medical bills, your doctor’s diagnosis, a timeline of the injury, and firsthand accounts of the accident. Winning your case is going to be nearly impossible without that information.

Consider Mediation

Mediation is a good option for some people, but there are a few things to consider before accepting a settlement. The at-fault party’s insurance provider and legal team will do everything in their power to pay out as little as possible, and they might offer you a lump sum right away just to avoid a trial. 

Accepting that lump sum will restrict your legal rights in the future, and that is why you should have an attorney by your side during the mediation process.

Take a Look at Contingent Fee Arrangements

Many attorneys, such as Blomberg Benson & Garrett, offer contingent fee arrangements to those who are involved in personal injury cases. With one of these arrangements, the lawyer will not be paid unless they win the case, and that means you won’t have to worry about paying any fees until an agreement has been reached. 

The legal fees are generally taken directly out of the settlement, and the overall percentage is determined before the client hires the attorney.

You should never feel as if your back is against a wall following a serious accident or injury. There are many different ways to receive fair compensation as long as you explore all of your options and spend some time researching your rights.

Friday, February 9, 2018

Your Guide to Early Retirement With Online Trading

Let’s begin by characterizing "retirement." Contingent upon your age, your perspective on retirement may differ. When you ask somebody born pre-1980, they will consider retirement to be the last stage in life in the far, inaccessible future. This will be a period when they can begin carrying on with the life they need and doing the things they appreciate.

An online trading analyst from Wilkins Finance asked a few people born post-1980 (as of now in their 20s or 30s) if their attitude toward retirement will be different. At 26, you may understand that the probability of projects, for example, benefits and government managed savings are a relic of days gone by and have chosen to bring measures into our own hands.

This begins with taking control of our funds and organizing our own way to money related opportunity. It implies that we would prefer not to work in a vocation we detest and save everything until the end. Rather, we wish to spread "conventional" retirement compose encounters for the duration of our lives, working smart instead of working hard.

It's tied in with having a work/life adjust and begins with working in a vocation we appreciate. Working savvy, making easy revenue streams and taking control of our own retirement is a portion of the beliefs that make up this new age.

Start off with your retirement in mind

The vocation of post-college alumni of the twentieth century looks not at all like that of the previous 50 years. An increasing number of individuals dive in and begin their own particular organizations. As a dealer, you fall into this classification.

Ask yourself these questions

If you're an administrator at an extensive company with a spouse and children at home with a money market fund, exchanging stocks can profit searching for a fast buck. Maybe you work in IT as an architect and are captivated with the specialized parts of day exchanging. Thus, ask yourself the following questions:

  • Can I handle being off-base and losing cash in the here and now so as to profit in the long haul? 
  • Can I hold fast to a routine and acknowledge that I will commit errors? 
  • Can I handle dismissal and feedback; conflict with the grain, and disregard the sentiments of others? 

Lower your costs

Investigate what you spend your cash on every month. Is that satellite television + motion picture bundle justified, despite all the trouble? Not only does decreasing your month to month cost bring down your aggregate dollar figure on which you can live off, yet in the event that you're waging continues as before you can save more and achieve retirement sooner. 

If you are exchanging full-time not having a gigantic pile of bills to every month diminishes the mental pressure and weight of constraining yourself to make exchanges and making cash to pay the bills.

Making a living out of your trading income

When you have your costs under control you'll have a lot of additional funds to contribute towards investments. It's vital to keep your exchanging size little where you can deal with your positions with an unmistakable and target psyche and rest during the evening.

Over the long haul you will turn out to be more certain about your capacities and you can start to build your size to the point where your month to month exchanging benefits break even with and surpass that of your month to month costs.

Exchanging is an incredible instructor of life's most noteworthy lessons. Permit the exchanging procedure to incorporate into your present way of life, and then roll out little improvements towards the way of life you need to live. Work to apply the standards gained from exchanging to all parts of your life.

A portion of the lessons exchanging has shown me are the way to evaluate chance/reward of a thought, how to confine myself from the feelings of winning and losing cash, and most critical how to spot great open doors when they emerge.

Planning your retirement

There are numerous open doors for us to diminish our spending on futile items that will wind up on our storeroom racks while in the meantime putting our brain to great utilize and gaining a couple of additional dollars every month.

Begin by placing yourself in the correct attitude. Try not to take a look at exchanging as an approach to make a brisk buck. Put resources into your future and resolve to be an understudy of your art forever. Exchanging can be an incredible method to create extra salary. If you do as the lion's share does, you can hope to wind up with normal outcomes. You should think like the minority with a specific end goal to succeed.

Thursday, February 8, 2018

Maximizing the Investment Potential of Your Second Home

There are plenty of reasons to buy a second home, from the convenience of being nearer to family to the luxury of having an always-available vacation destination. Today, more and more people are buying a second home as an investment — in fact, at least 37% of buyers claim that their second home was purchased for this very reason.

But seeing a return on this kind of investment goes far beyond simply buying another house. It pays to set your priorities straight, to do your research on the local area, and to get the most out of tax benefits while minimizing unnecessary costs along the way.

Read on for invaluable advice from real estate experts, so you can maximize the investment potential of your second home.

Buy Smart

If you’re buying a second home it means you’ve bought a house before and you know the ropes — to some extent. While buying a second home also involves a down payment, a mortgage, and other associated costs, there are some differences to be aware of the second time around.

Your second home probably has a more specific use, so it’s important to make sure that you choose an appropriate property. A vacation home should have all the amenities you require for a relaxing time away from your primary residence, while a home purchased to be closer to family should provide you with enough space to host loved ones during family gatherings. Buying the wrong kind of home for your needs could force you to spend more money later on to adapt the property.

Once you’ve found your ideal second home, you’ll need to get your finances in order. Lenders are more wary about second home loans and often require a higher down payment — up to 25% in some cases. Although a down payment of at least 20% allows you to avoid mortgage insurance and minimize interest payments, overpaying will affect the value of your investment. Finding this balance is an essential part of getting a second home.

Location Matters

When it comes to maximizing the investment potential of your second home, it may be a cliché, but it really is all about location, location, location.

Housing prices across the US remain relatively low, making it a good time to buy property as an investment. When choosing a vacation home or investment property, there will be multiple cities in the US that can meet your needs; to narrow it down, compare the real estate markets of states or cities you’re considering. 

Arizona, for example, is a popular vacation locale due to its pleasant weather and an especially smart choice in the current economic climate. Experts predict that prices will rise in and around Phoenix, with single-family rental properties and apartment complexes accounting for much of the growth. 

Fortunately, interest rates are reasonable and home prices aren’t anticipated to exceed local incomes, so it’s also a stable market to buy into right now.

Wherever you wind up, choose somewhere that has steadily appreciated over the past few years and is predicted to continue into the future, as this will boost the value of your investment.

Know Your Tax Benefits

A number of initiatives and tax breaks can help you make the most out of your property investment — you just have to know what they are.

If your second home is for personal use only, you may be able to deduct mortgage interest on the second property. The amount you can deduct will depend on the combined mortgages of your first and second home. 

You may also be able to deduct real estate taxes, property taxes, and the interest on a home equity line of credit you use for improvements to your second property.

If you plan to rent out your second home, there are a variety of potential tax deductions available to you, organized into three levels. First, if you rent out your home for fewer than 14 days per year, you can enjoy tax-free income on that rental property.

If you rent out your home for more than 14 days, but you also use it for more than 14 days yourself, you qualify for the second level of tax breaks. That means, while you’ll still pay tax on the rental income, you’ll qualify for partial deductions on costs associated with renting out the house, from repairs and utilities to association fees.

Finally, if you rent out your property for more than 14 days per year and use it for fewer than 14 days per year yourself, you’ll pay tax on the rental income, but all of the costs associated with renting the property will be deductible.

Sell Smart

1031 Exchange

One way people maximize the investment potential of their second home is by using a 1031 tax-deferred exchange when they sell their house. If you’ve only been using the property as a rental, this is an excellent route to take, as the house does not qualify as a personal-use property.

The 1031 exchange essentially involves reinvesting any profit from your property into buying a replacement property in quick succession to selling. This allows you to defer any taxes on that property. It can be tricky to understand, so it’s vital to consult a real estate professional who is familiar with the process.

Capital Gains

While a 1031 exchange can be useful if you’ve been renting out your property, there are also benefits to living in your second home when it comes to selling it later on.

If you live in your second home for two out of the five years immediately before selling it, the property is considered your primary residence, and you can exclude up to $250,000 in capital gains as a single person, or $500,000 if you file as a couple. 

Even if you didn’t live there for a full two years out of the past five, you can still qualify for partial exclusion based on a ratio of how much of the time you spent there.

Maximizing the investment potential of your second home can involve a lot of work, research, and a steep learning curve; but by familiarizing yourself with the market, the area, and the law you can make a huge difference to your return.

Contributed by: Aderra Condominiums' sales are headed by Melanie Sanders of RE/MAX Platinum Living. Melanie comes with 25 years of experience as an Associate Broker/Team Leader, specializing in New Homes and Model Home Sales. Melanie was the former Vice President and Designated Broker of DR Horton and Ryland Homes, running sales and marketing. Melanie and her team have the knowledge, experience and friendly attitude required to manage all aspects of sales at Aderra.

All You Ever Wanted to Know About Tax Benefits On Personal Loans

Personal Loans are becoming convenient means of getting emergency funds for various purposes. They are easy to get, and you don't have to declare the purpose for which you are using the loan. Did you know that Personal Loans can also in certain situations, provide you Tax Benefits?

Personal Loans

Personal loans are unsecured loans. You don't have to provide a collateral for getting the funds. As they are unsecured, they come at high interest rates. However, because they do not require any security, there are fewer documents to verify, so these loans are processed quickly.

While you can get personal loans even with a low credit rating, the interest charged can be very high. If your credit score is good, you have a better chance of getting the loan quickly and at lower interest rates. 

With Personal Loans, you don’t need to declare the end use and show proofs as you have to do with a Home Loan or Car Loan. You can use the funds raised for any purpose. You can use it for an emergency expense, for medical or hospital bills, for educational funds, for buying new furniture, to buy home appliances, to raise quick funds for your business and so on.

As long as you stick to the repayment schedule, and don't get too many personal loans at once, you can probably repay the loan on time and be relieved of an expensive debt. However, unlike a Home Loan, you don't normally get tax benefits on a personal loan.

Or do you?

Tax Benefits on Personal Loans?

With a Home Loan, you get tax deductions on the principal repayment and on the interest paid on the loan. So, you generally get a Home Loan to buy a house or to carry out repairs and renovations. As they are secured loans (the property you buy is the collateral), the interest charges are much less compared to Personal Loans.

So, why would you get a Personal Loan to buy a house? Normally you wouldn't. But there might be exceptions. For instance, you generally get only around 80% of the total cost of the house as a Home Loan. You would have to pay the rest yourself as down payment.

You may not have access to enough funds for this down payment. But you need to make the payment quickly to get your Home Loan processed and to buy the property. You may be thinking of renovating or redecorating your house. A good option might be a Top-up loan on your Home Loan, but you currently may not have made enough repayments to have the necessary equity on your home for a top-up loan.

In these and other cases, you may resort to a personal loan if you are confident of keeping up with the repayments on your Home Loan and Personal Loan.

Tax Benefits on Personal Loan Used for Residential Property

If you use your personal loan funds towards acquisition of a house or to renew or remodel it, you can show proofs of the expenses to avail tax exemption on the interest paid on the loan. According to Section 24(b) of the Income Tax Act, use of borrowed capital towards purchase, renovation or repairs on your residential property entitles you to tax deductions on the interest of the repayment.

Section 24(b) does not specifically mention the type of loan. So, even if you take a Personal Loan to bridge the gap between the Home Loan and the actual cost of the house, or to repair the house, you can claim a tax exemption on the interest amount paid. Note that you cannot claim deductions on the principal, only the interest component.

If the loan has been taken for a house that you live in, you can claim a deduction of up to Rs. 1.5 Lakhs on the interest amount paid in that year. If the house is still under construction, then you will have to wait until the construction is completed. If you have let the house you borrowed the amount for on rent, there is no cap on the interest amount you can claim deduction on.

Remember, if you are carrying out repairs or renovations, save all the bills for materials and labor. You need to show these as proofs to get the tax benefits on personal loan.

Tax Benefits on Personal Loan Used for Your Business

Funds you use for business purposes can be deducted from your net profit as expenditure. So, any funds raised through a Personal Loan that you have used as business expense can also help you save on taxes. The expenditure brings down the taxable profit, so your tax liability becomes less.

While you don't generally associate Personal Loans with Tax Benefits, depending on how you have used the funds, you can claim deductions and save on taxes.

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