P2250123 – Solar PV
See more Solar PV images by Earl of Grey – 2001-02-25 13:40:12
P2250123 – Solar PV
See more Solar PV images by Earl of Grey – 2001-02-25 13:40:12
The terms life assurance and life insurance are often used to mean the same thing, but actually, there is more of a difference than you may think. It is important to understand how the two differ to ensure you are obtaining the right type of cover to suit your specific needs.
Life insurance only covers you for a specified period, whereas life assurance cover is guaranteed.
When taking out life insurance you specify how long you want the policy to last, (the term). If you die during this period, your beneficiaries receive a pay out. If the term of the policy ends, however, no pay out is made and your life insurance simply expires.
Life assurance, however, lasts for the rest of your lifetime and guarantees a pay out when you die. This usually involves paying premiums for the rest of your life, but it does mean that the policy will never expire.
In short, life insurance pays out if you die, whereas life assurance pays out when you die.
There are various types of life insurance and life assurance and understanding them can help you decide which type of cover best meets your needs.
Level term life insurance requires you to state your desired pay out amount (sum assured) and policy length. You then continue to make monthly payments (premiums) for the duration of the term. If you die during this period, your beneficiaries receive the fixed pay out amount as agreed at the start of the policy.
This type of policy is best suited for those who are looking to leave their loved ones an inheritance, cover a mortgage, as well as meet future living costs. Level term is usually more expensive than decreasing term as the pay out sum holds its value.
As with level term life insurance, decreasing term life insurance requires you to specify the policy term. The key difference here however, is that the pay out sum that is made to your beneficiaries decreases over time.
This type of cover is best suited to those looking to cover the cost of their repayment mortgage, as the pay out decreases in line with the outstanding mortgage balance. Decreasing term is usually the cheaper option out of the term based life insurance options because the risk to the insurer reduces over time.
Whole of life insurance involves specifying the desired pay out amount, but the length of the policy lasts until you die. The important thing to consider with this type of policy is your age.
If you are young and in good health, because the premiums are to be made for the rest of your life, it could end up that you pay more into the policy than it will ever pay out. However, unlike term-based insurance, a pay out is guaranteed.
Like whole of life insurance, an over 50s plan guarantees a pay out to your beneficiaries when you die. Again, you determine the pay out amount and your premiums are calculated based on that sum.
It is common for premium payments to be made until you die, however, in some instances a cut off age is put in place. For example, some insurers will only require you to make payments until the age of 90 but a pay out is still guaranteed if you die at any time after this.
The key difference between an over 50s plan and a whole of life policy is the medical information required upon application.
A whole of life policy can be applied for at any age, but medical information and often a medical exam are required so that the cost of your premiums can reflect the risk you pose to the insurer.
Over 50’s plans, however, offer guaranteed acceptance between the ages of 50-85 but they do not require you to provide any medical information other than whether or not you are a smoker. This means that if you are older and/or in poor health, you are likely to benefit from this type of policy.
On average, for the same level of cover, a whole of life policy will be more cost effective provided you are in good health as the cost of your premiums is calculated based on the risk you pose to the insurer, whereas over 50s premiums need to cover the unknown risk due to lack of medical knowledge.
Generally speaking, the minimum age to take out life cover is 18, with the exception of an over 50s plan which only accepts those aged 50 or older. The maximum acceptance age varies from insurer to insurer so it is always worth getting in touch with an independent insurance broker regardless of your age to determine what options are available.
With regards to expiry age, most level and decreasing term policies will only cover you up to the age of 90. For example, if you are 30 and looking to take out level term cover, you will only be able to get a policy length of 60 years as opposed to 61 and so on.
Although decreasing term insurance tends to have the same condition, it is common that the length of term on these policies is shorter as it is usually set up to mimic the length of a mortgage term.
Whole of life and an over 50s plan don’t have an upper age limit. Therefore, regardless of the age you die, you will still be covered, hence the term life ‘assurance’.
It is also common for an over 50s plan to only require you to make payments up to the age of 90, whereas whole of life requires you to pay premiums for as long as you live.
This is where an over 50s plan could end up being the cheaper option. For example, if you were to take out a whole of life policy at the age of 65 at £10 per month and lived to the age of 105, in total you would have paid in £4,800. Whereas, if you took out an over 50s plan at the age of 65 at £15 a month, whilst more expensive on a monthly basis, because you are only required to make payments until the age of 90, you actually only pay in a total of £3,750.
When deciding on life assurance or life insurance, essentially it comes down to your budget, age, what it is you want to protect and how long you need cover for.
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Solar Powered PV Lighting _0527 – Solar PV
************ photo documentary research data collected in Huaibei City, Anhui Province, China, in conjunction with the EcoCity Development Project – Chinese Academy of Sciences, Research Center for Eco-Environmental Sciences – State Key Lab of Urban and Regional Ecology www.rcees.ac.cn/english/e-index.htm
Photo Credit: Philip McMaster, Networking and Training Center for Ecopolis Development – RCEES, Chinese Academy of Sciences and McMaster Institute for Sustainable Development in Commerce
Sustainability Symbol: www.SustainabilitySymbol.com
See more Solar PV images by Philip McMaster PeacePlusOne_!/ – 2009-03-20 15:48:35
This guide will cover the essential information for buy-to-let property investors. We will explore buy-to-let mortgages, what locations to target, rental income and the tax change reforms affecting investors and landlords.
Buy-to-let property investments have become more difficult than previous years due to tax reforms for both buying a property as an investment and the rental income received. Even with these changes, the idea of investing in a property will still appeal to many people across the UK. The population’s trust in bricks and mortar far outweighs that of the stock market and investment funds. Low interest rates attract investors for buy-to-let properties because mortgages cost less, and returns on bank account savings provide very little in the current financial climate.
A 3% stamp duty charge takes away part of your investment combined with the loss of full mortgage interest tax relief. Interests rates are predicted to rise in the coming years as they have been at an all-time low for an extended period due to the uncertainty within the UK economy. As an example, if you were to purchase a £150,000 property, around £5,000 will be lost on stamp duty tax along with your rental income being taxed instead of your profit. Even with these changes, buy-to-let investments are still very popular. If you’re an existing landlord or looking to enter the property investor market, we have outlined ten essential tips in this guide for buy-to-let property investors and landlords.
If you have enough money for a large deposit, a buy-to-let property can be an attractive investment. Stock market fluctuations and low interest rates for savers only make that decision easier. After the 2008 financial crisis, the property market has slowly been on the rise and has given investors the opportunity to purchase a property with the hope that its value will gradually increase over time. Investors are looking at homes outside of London for a stronger return on investment (ROI) and because prices in the capital city are out of reach for most. Current mortgage rates from lenders are at a record low and make a good value proposition for anyone looking to buy. However, it is important to remember that current interest rates can increase at any moment in time, with this in mind, it may be useful to speak to a specialist advisor to see how your investment could be affected over a period of time.
Buy-to-let mortgage interest relief has been taken away and been replaced with a 20% tax credit. Furthermore, landlords have to pay an additional 3% stamp duty when purchasing a property under new legislation effective in April 2016. Fortunately, despite the potential rise in mortgage costs and tax reforms, there is a positive side. Inflation has meant that rent prices are rising, and a strong demand for tenants has contributed to this. As for any investment, there aren’t any guarantees for a buy-to-let property, this is suited to those who believe in bricks and mortar as opposed to the stock market and shares. Here are UtilitySavingExpert.com’s ten essential tips for buy-to-let property investors and landlords:
If you’re a newcomer to buy-to-let properties, what do you know about the market right now? Are you aware of the risks as well as the rewards? Your money may be more useful or perform better in a different market so it is important to know if you really want to enter into a buy-to-let investment, make sure it’s something that you really want. Previously, high interest rate savings accounts would better most types of investments but these are currently unavailable. Placing capital in a property means that the value could decrease so there is an associated risk.
This is in comparison to a potential 3% rate on a fixed rate savings account or up to a 5% annual return from an income-based investment fund. It is important to remember that returns from an investment trust, shares or investment in funds through an ISA will allow you to avoid tax on income and gain capital growth tax free. If you wish to sell as quick as possible, this option will also give you that flexibility. In contrast, you are unable to renovate and add additional value to an investment fund.
Typically, you will have to commit tens of thousands of pounds and maybe even take out a mortgage when investing in a buy-to-let property. If house prices increase, it is possible to leverage this large gain against your mortgage, should they fall, your deposit takes a hit and the mortgage will stay the same. Investing in a property has been a smart decision for many people, in terms of any capital gains and generated income but it is paramount that you are able to acknowledge the potential advantages and disadvantages before entering. It is also a good idea to hear from other people’s experiences whether in person or online for helpful advice. The more research you carry out and the more knowledge you gain will benefit you and hopefully increase your chances of making the right investment decision.
A promising location means an area where people would like to reside, this will likely be for a number of different reasons. It does not necessarily mean the least or most expensive place. Is there a place in your town or city that has a specific appeal? If you commute, what are the transport links like? Where are the well performing primary and secondary schools located? Where do college and university students wish to live? You need to look for areas within the city or town that are within your budget and can be matched with the location that people utilising the above facilities can take advantage of. For example, a young family will want to live closer to a reputable school and an area that is considered safe, everything else may either be seen as additional or a bonus depending on their criteria.
Although simple, these questions are likely to be the biggest contributing factor for a successful buy-to-let investment. Generally, people are likely to invest in a property closer to where they live, this is based on them likely understanding the market better than anyone else and they can specify which type of property will be successful in a given location. It will also make it easier to check the property regularly and to make sure everything is in place correctly. If you are already a home-owner, it is worth considering a look at a different type of property and location as this exposure may open up new options.
It is a good idea to write down a list of different property prices and the amount of rent you will likely receive from each beforehand. Most buy-to-let mortgage lenders will demand a 25%+ upfront deposit and will generally want the rent to cover 125%+ of the monthly mortgage repayments. Usually, lower rate mortgage deals also come with much higher arrangement fees. It is a good idea to compare different mortgage lenders’ rates and arrangement fees to ensure you are getting the most competitive price. After looking at different mortgage rates and the rental income you are likely to receive from the property, you will then be able to calculate whether your new investment will be worth pursuing. Remember to factor in maintenance cost or the event of the property being empty for a number of months. There are many things to take into consideration, make sure you are aware on how much your mortgage repayments will differ if you’re on a tracker rate and budget with this in mind.
Do not ask for a mortgage from the first bank or building society you visit. It is best to compare a range of different products from a number of different lenders to ensure you are getting the most competitive deal. You can either use an online comparison site (we recommend using more than one) or speak to a qualified independent broker such as Simple Financial Planning. An experienced broker will be able to guide you through what deals are available to you and give you expert advice on which product is right for you, whether it be a fixed rate or tracker mortgage. Carrying out your own research will be helpful before speaking to a broker as it will be easier to identify what questions you need to be asking.
Think of the needs of your target tenant, rather than imagining yourself living in the property. Who are they and what are their requirements? If it’s a student, the property needs to be relatively easy to clean and focus on comfort rather than luxury. Young professionals may prefer modern furnishings with a minimal aesthetic style but not too complex. If you’re trying to target a family, they will likely have a lot of their own belongings such as furniture and will prefer an empty space that they can manage on their own. If you allow tenants to decorate, add pictures, remove unwanted furniture, it will make it feel more like a home. This is great news for landlords, as tenants will likely stay longer if they are able to make the home feel more welcoming.
If your tenant fails to pay the rent, it may be worth taking out insurance from a specialist provider beforehand, this may be covered in some landlord insurance policies or as a standalone product.
Experts advise to target for income rather than short-term capital growth, even though you may expect house prices to rise in the long-term. Use the annual rent received as a percentage of the purchase price to compare the yield and property’s value. As an example, if a property gives you £12,000 worth of rent each year and the purchase price is £240,000, this has a 5% yield. For buy-to-let properties, rent should be seen as the key return.
Rent to property price yield will not be the return you receive if you are buying with a mortgage, also consider that you will also have maintenance costs, landlord expenses and tax that will take away from your return. The majority of buy-to-let mortgages are carried out on an interest only basis, meaning the amount you borrow will not be paid off over the time period, this may be tax efficient as you’re able to offset your mortgage payments against your tax bill, we strongly recommend that you speak to a specialist financial advisor before undertaking any type of property investment to understand all the advantages and disadvantages and how this may affect you in both the short and long term.
Previously, you were able to offset the entire mortgage cost against your tax bill, this is changing and it is estimated that by 2020, you will only receive a maximum 20% tax credit on any mortgage payments. If your rental income is substantially larger than your mortgage payments, this extra money can be used towards any further investments or even be saved for use in the event of an emergency, for example, if your property is empty for a longer duration than expected.
People will very rarely buy a property outright, so remember that there will be running and maintenance costs, agent fees, mortgage costs and these must be calculated in any return. After factoring in these costs, you may still wish to consider if a buy-to-let investment is still better than a trust or investment fund. Once you have calculated all over your costs, you will want any rental income to build up and increase over time, this can then be used for another deposit for any further investments or better yet, to pay off the mortgage in its entirety before or at the end of the term. Ultimately, this will allow you to benefit from both rental income received and you will hold the capital value of the property once the mortgage has been paid for in full.
The city or town that you currently live in may not be the best investment option. Although most buy-to-let investors do look for properties closer to home. If you are purchasing a property closer to you, as an advantage, it will be much easier to monitor what’s going on, although you can always hire an agent to do this for you, if you do employ a letting agent, remember to factor these in to your maintenance costs.
Explore the market and carefully consider cities or towns that have good commuting routes, have a large university or an areas that are popular with families. Properties that need renovating may give you an opportunity to substantially increase your return on investment. It can sometimes be easier to get a better purchase price for buildings that haven’t aged well or properties that need renovation. If you are able to add value to a home in a short period of time, you could possibly see a quicker return on your invested capital, therefore also increasing your safety margin. Ensure that you have calculated any refurbishment costs on top of the purchase price before considering how profitable this method may be. Property developers calculate this by looking at purchase price + refurbishment costs + 20% = final value.
You will have the same advantage as a first-time buyer when you are looking to negotiate a purchase price of a property, the more you can discount from the list price, the better. As a buy-to-let investor, you will most likely not be part of a connecting chain, meaning you are not relying on the sale of a property before you can purchase another. This will mean there is less risk for a seller of a property sale falling through, you can use this information to your advantage to try to negotiate a better price. You’re able to make a lower offer and won’t feel pressured into paying more than you need to.
Keeping a constant eye on the property market can make it easier to get a better purchase price when negotiating. For example, if properties on average are taking longer to sell and the market is more challenging, you should try to find out how long the seller has owned the property and why they’re looking to sell, this will allow you to reconsider how much you should be offering and how likely it will be accepted. If a property has been owned by an existing landlord for many years, they will likely want to generate a return on any capital gains and may be willing to accept a lower offer for a sale to go through compared to a family that wants the best price for them to be able to afford their new property, especially if it’s a young family looking to upgrade to a larger property.
It is equally important to explore all the negative aspects of any buy-to-let property before proceeding. If property prices decrease, will you be able to continue with your investment? Although house prices are increasing right now, there has been a slowdown in growth recently and prices can fall at any moment in time. What will you do if interest rates rise? Yes, interest rates are very low in the current financial climate which is encouraging many to invest as they can comfortably cover their mortgage payments with rental income received but this can always change. It is important to calculate how much it would cost you with different interest rates, this is a useful exercise to plan for any unforeseen circumstances and calculate how much risk is involved. What happens if you’re unable to remortage? Calculate the different between any fixed rate mortgage and a standard variable rate for a number of years. As mentioned earlier, it may be useful to speak to both a broker and financial advisor to better help you understand the costs and what implications that will have on you in any market conditions.
Many buy-to-let investors will calculate a property being empty for 2 months per year, leaving them to factor in a buffer in any unforeseen circumstances. This also applies to areas that are very popular, properties can still be unoccupied for a multitude of reasons. It is important to have your own buffer before investing, this is to make sure you have the required funds available should you need to carry out any repairs such as a boiler replacement or a broken window. Often, landlord insurance will cover you for many building repairs, so it’s a good idea to see what you are and what you’re not covered for.
Please check tax legislation and make sure your knowledge is up to date before proceeding, rules and regulations are always changing, so it’s important that you know what you will have to pay for before investing in a buy-to-let property. Right now, there’s an additional 3% stamp duty charge and in the coming years any mortgage interest will not be able to be offset against rental income before income tax is calculated. A 20% tax credit will be applied.
Purchasing a buy-to-let property as an investment is a huge undertaking. Will you use a letting agent or rent it out yourself?
Agents come with their own management fees, but will know which electrician or plumber to contact should things go wrong, it will be their responsibility to deal with any problems that the tenant may have. You do have the option to let the property yourself but you will need to account for any time given up on evenings and weekend to cover advertising, viewings and any repairs. You do not have to select a high street letting agency, there are independent agents that will be able to offer you a personalised service and may be priced more competitively. Speak to as many agents as possible and ask them what they’re able to offer.
If you decide to manage everything yourself, consider where you will advertise, online, newspapers, social media. How will you create tenancy agreements and do security checks, there are guides and templates you can use online. Looking after your tenants well will in return reward you well, as they may stay for longer periods if they have a great experience to begin with. It can be difficult in periods when the property is empty due to the loss of revenue, good tenants who wish to stay will allow you to avoid this and they may even recommend someone they know when they move out. If you want to go one step further, you can also help your tenants with energy comparison to help them find the cheapest energy tariffs. Build a good relationship with your tenants and new neighbours and make sure the property is well maintained. This will help you in your journey to being a great landlord.
This guide was written in July 2018 and will be updated as necessary.
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SDC12875 – Solar PV
See more Solar PV images by London Permaculture – 2008-03-05 17:27:20