Personal Finances -- Overdraft, and Instabank

Overdraft Protection

"From time to time, you may need the convenience of overdraft protection. Think of it as peace of mind for those times you need a little extra to cover a cheque or bill payment." This is from the BMO website.

During university I worked at one of the big 5 banks as a teller and I helped out with the processing of loan applications. I learned about the joys of determining your Beacon and FICO scores. Two of the main personal finance habits were learned while making $8.00/hr counting other people's money.

1.) Bank Overdraft -- Yes, they will protect you for those times when you may have forgotten to deposit your rent cheque or your cousin is two days late paying back your $50 loan. However, nothing is for free and the bank charges you interest on the overdraft amount each day. 9/10 you end up using the overdraft protection because you were either too lazy to get to the bank or you failed at planning your personal finances and you bought that new watch or the case of Guiness instead of Lakeport beer!

2.) Instabank fees -- Yes, most banks will charge you hefty service fees for using your own money. One big tip is to get out of the habit of withdrawing small amounts from the bank machine at one time. Each time that you make a withdrawl your account can get charged and if you are using another bank's machine then you're getting the 'ol double whammy of even more fees. Instead of taking out $10 each day throughout the week to buy your foot long sub combo at Subway, then why don't you take out $50 on Monday and budget it throughout the week.

It's the little things that make the world of personal finance in Canada go round.

CONDO HOTELS -- who, what, where, when, how?

Canadian Condo Hotels are a new trend in second home ownership.  Buyers can purchase luxury vacation homes at a world-class resort and receive rent revenue whenever they are not using their residence, helping to offset the cost of ownership.

 

There are several locations in Canada where Canadian Condo Hotels have been popping up.  Some of the more common locations are Banff, Quebec City and Mont Tremblant.

 

Canadian Condo Hotels are normally operated by the biggest names in the hospitality industry like Four Seasons, Ritz-Carlton and ChoiceHotels.  By capitalizing on the hotel’s name recognition, advertising, national affiliations, centralized reservation system and management expertise, Canadian Condo Hotel unit owners typically receive a higher level of rental income than they would from ownership of a traditional vacation home.

 

Owners normally participate in the property’s rental program and share in the revenue the unit generates.  Ownership is considered to be 100% hassle free as all maintenance and rental issues are handled by in-house management companies.

 

With a timeshare, owners are typically allotted just one to two weeks of the year to use their condo.  They receive the same calendar weeks unless they go through a process to trade with someone else.  With a Canadian Condo Hotel unit, owners have deeded ownership to their unit and can usually use it when they want.  Timeshares can also be difficult to resell, even if the seller is willing to take a loss.  Canadian Condo Hotels, on the other hand, because of their prime locations, limited inventory and upscale quality, are a highly-desired commodity.  They are more likely to appreciate over time and can be readily resold.

 

As part of the rental agreement, the hotel pays for most operating expenses such as housekeeping, administrative and marketing costs.  The Canadian Condo Hotel owner typically pays the real estate taxes, insurance and capital improvements.

 

Canadian Condo Hotels are attractive because they offer a luxurious lifestyle and hassle-free ownership.  In addition, low interest rates and a volatile stock market have caused investors to diversity and consider real estate alternatives like Canadian Condo Hotels.

 

 

 

 

Get it approved and get it done

Get it approved and get it done.

Just a quick tidbit to keep you informed on the importance of getting locked in guaranteed mortgage rates.

If you are considering getting an investment property or even if your principal place of residence has its mortgage up for then renewal then it is imperative that you continue to get locked in mortgage rates from either your mortgage broker or main bank. You can request this guarantee and it should be locked in for approximately 90 days. If it is a mortgage renewal then you must wait for 90 days prior to the maturity date before shopping around.

This can work to your benefit when rates are fluctuating and the prime rate is expected to rise. Also, remember that the media normally lets you know at least one week in advance if the prime rate is expected to raise.