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Monthly Archives: April 2019

Sell or Rent? Making the Most of Your Prior Home

If you’ve made the call to move—whether you’re upgrading, downsizing or simply looking for a change—you need to do something with your previous home. But what do you do? Sell it? Rent it as an income property? Keep it as a second home? In this article, I’m going to try to give you answers to some common questions that may come up when it’s time to move.

  • I’m planning to move to a different area. Should I sell my home or rent it?
    • Generally speaking, I recommend you sell unless doing so would cause you to take a significant loss that could be mitigated by holding the property for a period of time or you want to be a landlord and own a home in an area where you do not live. Real estate is a great investment; however, there are other ways to own real estate that alleviate you of the responsibility of day-to-day management.
  • What are some unique challenges that can accompany renting vs. selling a property?
    • Being a landlord is not for everyone. There are various challenges, including advertising for tenants, handling leases and deposits (In some states interest must be paid on a rental deposit) and the big one, especially if you live far from the property; maintenance. It is advisable to hire a property management firm if the owner does not want to handle these responsibilities; however, it comes at a cost. Another potential negative to renting your property; the tenants are unlikely to treat your former home with the same care you would.
  • Why would renting be advantageous?
    • If you own a property in an area with significant appreciation, renting your property can generate a significant gain long-term. And even in areas where appreciation isn’t significant, if you can generate enough rental income to cover you costs, someone else is paying off your asset for you.

Finally, do not be afraid to take a loss on a property to get out from underneath a mortgage, especially if you do not want to be a landlord or if holding the property as a rental makes it difficult or impossible to obtain a mortgage on a property where you are living next.

The debt on the rental property impacts your debt-to-income ratio, a factor in obtaining a mortgage and banks in general do not consider the rental income in total or at all in their calculation of your ability to pay both mortgages.

It is important to remember that three months—or worse, a year—without a tenant can dramatically increase your monthly expenses and impact your own financial independence goals.

Any plans to move? Are you considering an income property? We can talk through it together and determine how best to put your previous home to use.

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.
The views and opinions expressed in this article are those of the author, are for educational purposes only and do not necessarily reflect the official policy or position of Larson Financial Group, LLC or any of its affiliates.
Not all Related Services are offered directly from Larson Financial Group, LLC or Larson Financial Securities, LLC but may be available through the Doctors Only network of companies.

Strategies to Protect Your Assets Against a Lawsuit

Medical malpractice insurance is something you’ll need as a doctor, whether it comes from your employer or you buy a policy yourself. When it comes to the specifics of which approach to take, there are multiple factors to consider.

One such consideration is something called “damage caps.” There are a few select states that have place a cap on all forms of damages in medical malpractice cases, including compensation for the costs of long-term medical care and disability. So it would make sense to only cover yourself up to the cap amount with your policy, right?

Not necessarily. Most states that have caps in place only cap non-economic damages, such as pain and suffering. There is rarely a cap on economic damages, so you’ll still likely want to cover yourself for more than the cap amount.

In terms of policy, there are two main forms: Occurrence and Claims Made policies. Both have advantages in different situations.

Claims Made policies are terrific for situations where there is a lot of turnover, or uncertainty as to how long the policy will be needed. Occurrence policies can be beneficial with long-term employees.

You have a vested interest in your medical malpractice coverage and you should know the carrier and coverage limits that are in place, regardless of who pays the premiums for the policy (you or your employer). To figure out what levels of coverage you need, talk to your insurance broker to create a plan that fits your needs.

Lastly, there are ways to protect yourself outside of medical malpractice insurance. Continually work to improve your communication skills and bedside manner. A healthy relationship between providers and patients and managing expectations go a long way to reduce blame when something goes wrong.

Is your medical malpractice coverage in a good spot? We can talk through your strategy together.

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.
 
Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.
 
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.
 
Professional liability services offered through MedInsure Group, LLC, a Larson Financial Group affiliated company.