Is a vacation home a good investment? + MORE Sep 21st

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 renter's insurance

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 renter's insurance

Your FHSA timeline: What to invest in and when Nov 29th

Before you make an offer to buy your first home, you’ll have to determine your budget and save up enough money for a down payment (typically about 20% of the home’s value). That’s probably going to be a good chunk of change—Canada’s housing market is expensive, and if you put down less tha.... More »

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Critical illness and disability insurance in Canada Sep 29th

When I bought my home and car, I also bought home and car insurance—it wasn’t even a question. (Plus, car insurance is mandatory in Canada.) If you own a home or a car, you probably also have insurance to protect your valuable asset. You might also be one of the 22 million Canadians who have lif.... More »
All you need to do to hit the open road is pass your driver’s test and put your keys in the ignition, right? Wrong. All drivers in Canada, including new ones, must also obtain auto insurance before they can legally drive. So, how much is insurance for a new driver? If you or someone in your household has decided to get a driver’s licence, here’s what you or your loved one can expect to pay for coverage. 

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How much does car insurance cost for a new driver? 

Many factors influence a new driver’s insurance premiums. Some of the main considerations include:

The driver’s profile: Demographic factors like age and gender influence premiums. Drivers under the age of 25 tend to pay higher premiums, because data from insurance companies suggests a lack of experience increases the risk of accidents…

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The benefits of owning a vacation property are obvious. A cottage, cabin, condo or trailer a short drive from your home can provide a quick weekend recharge. A property down south can serve as a regular vacation destination or a winter home for a snowbird.

Sometimes, emotions are the motivation for buying a vacation property. I like to evaluate a property purchase from a financial point of view—and here is how. 

The costs of buying a vacation property

Say a property’s purchase price is $500,000. Whether you use cash, a mortgage/home equity line of credit, or a combination of the two, there are other costs to consider.

If you purchase with cash that you could otherwise invest for a 4.5% return (to use a conservative assumption), there is an opportunity cost of not investing that money or leaving it invested. If you borrow money, there may be an interest cost of 4.5%. So, to keep it simple, we will assume an opportunity or financing cost of 4.5%. 

Property taxes, utilities, insurance, condo fees, and maintenance could easily add another 2% to 4% per year in costs…

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