Pavel Tchourliaev

First time home buyer guide – tax matters

To buy or to rent a condo in Florida?

This is a blog post I wrote for The Rentables:

When deciding whether to buy or to rent a condo in Florida, you need to consider the following: which option results in less money leaving your pocket?

Costs of renting
There are generally two costs associated with renting, which are:
1. Monthly rent
2. Utilities

There are usually no costs associated with repairs and maintenance of the unit since this is taken care of by the property owner.

Cost of owning
Owning a condo has additional costs over renting such as:
1. Mortgage interest and principal payments
2. Property taxes
3. Utilities
4. Condo fees
5. Unit maintenance

Of course many condos offer extended services such as in-unit washer/dryer, concierge services, and more designed to improve your quality of living beyond the typical rental apartment.

To buy or to rent
If your monthly fees for all costs associated with owning a condo (excluding the principal portion of your mortgage payment) is higher than the cost of renting (for a comparable unit), consider the following scenarios:
1. Make a larger down payment on a condo to reduce your interest to the point where renting actually costs more
2. If you choose to buy, consider having a roommate and collecting monthly rent and sharing utilities to reduce your costs
3. Continue renting and saving as much as possible every month to put down a larger down payment in the future – why? Because if renting is cheaper, you can save money faster than you can pay off the principal on your mortgage.

Florida offers a variety of water front condos for rent in Boca Raton, Miami Beach, North Miami, compare them to for sale listings on Zillow.com, consider talking to your accountant to learn more about tax credits you can receive and make your choices after becoming well informed.

Living in Small Spaces

Lets face it, very few of us want to live in a tiny apartment, but most of us have “been there, done that” at one point or another. Small spaces, be it a room in your parents house, a junior/bachelor suite, or a tiny one bedroom apartment, are hard to decorate while keeping clutter at bay.

Think it can’t be done? Think again. Here are a few guidelines which you should follow to make your dwelling look larger and roomier than it actually is:

1. Use light paint on walls – dark paint absorbs light and emphasizes how small the space actually is. Using lighter, off-white colors will give your shoebox the perception of being a much larger area.

2. Don’t buy bulky furnishings – while researching for this article, I came across this great Ikea website: IKEA: Living in small spaces. This site is in English, but is made for Hong Kong dwellers for whom space management is an important consideration.

3. Make use of your walls – they provide great storage space and are great for decoration. If you want to put up a picture or a painting, opt for a smaller one to keep decor proportionate to the room size. If you’re buying a new TV, take a look at wall-mount brackets, TV stands are usually bulky and waste precious space.

4. Don’t use low hanging lights – your space is small enough as it is, so don’t clutter it with dangling light fixtures. Look for slim light fixtures available at any local furniture store that will provide enough illumination yet look right at home as they closely hug the ceiling.

Unless you’re operating on a large budget, apartments and condos for rent in Toronto are often small and can benefit from these tips.

Learning to run – Part 2

By now, I read several different books on running, and here’s what I learned:

1. Always land on the ball of your foot (your heel should always be at least ¼” off the ground when landing)
2. When landing, your foot should be directly under your body
3. You should always be leaning forward a little, but keeping your head straight
4. Your arms should move as much back as they do forward with every swing
5. 180 steps per minute is considered to be the perfect cadence
6. Do not force your foot to swing back, rather relax your knee as your leg moves forward to snap your heel up and let it rest during those short intervals
7. Don’t worry about speed, get used to running properly before increasing your speed.
8. Stretch every muscle before, during and after the run
9. You should not feel any pain during the run besides your calves, if you do, then you’re either not stretching or running properly. Don’t force yourself through it, stop immediately and fix the problem first.

I started running again based on the above lessons: 15-20 minutes at a time, 3 times a week. After every run my calve muscles are in a lot of pain, but my friends re-assure me that this normally goes away after 3 weeks to a month of running as the muscles become stronger.

Overall, I feel great after every run, I haven’t been feeling any knee pains and I’m gaining my flexibility back because I spend at least 10 minutes stretching before and after every run.

The next step is to sign up for a proper running event and set time goals for completing it.

Crash Course on SEO

Learning SEO can help you with the current business by bringing more organic traffic to your site. It will also force you to consider a proper online marketing approach before you start any business in the future.

When learning SEO over the past month I came across some great sites and tutorials and if you have no previous SEO experience I highly recommend reading the Beginner’s guide to SEO at SEOMOZ (www.seomoz.com) as well as watching Lynda tutorials (which although slightly dated are still very relevant).

SEO is made up of several important components:
• Keywords – selecting highly targeted keywords often referred to as “long-tail” can give you an edge over immediate competitors who are often optimized for generic high-search-volume terms.
• Back-links – when other websites link back to your site, search engines recognize your site as being authoritative. It’s important to note that one back-link from a site that has high ranking (CNN.com, reuters.com) is better than 50,000 links from forum signatures, blog comments and any link farm that you may have placed your link on.

Any SEO requires a lot of research and a good place to start would be to determine which keywords draw the most amount of traffic. Believing that ‘everyone’ searches for a keyword may not be true and you should check out the actual search volumes for keywords using the Google Keyword Tool. When you compiled your list of keywords, check how many results each keyword gets and compare the search volume to results ratio. This will give you a good idea of which keywords you can use to get on the first page.

The next step is to analyze 9th and 10th results on the first page of Google for a particular keyword that you want to optimize your site for. Pay close attention to the landing page, the frequency of use of the keywords, actual html code, site rank and the amount of back-links. This should give you a good idea of how much effort will need to be put into a specific keyword to be on the first page of Google.

Of course, there is a lot more to SEO than stated above, but this should be a good start to make you a proficient online business developer.

TFSA v. RRSP and other investements (Canada Only)

TFSA is a great way to shelter your investment income from taxes, but please stay away from regular tax free savings accounts offered by your local banks. The “high-interest” label is far from the truth and giving them your money means missing better investment opportunities. Current recession forced inflated stocks back to (or below) fair market prices; a great opportunity still exists to diversify your portfolio and invest into stocks through a self-directed TFSA.

Bank TFSAs are no better than regular savings accounts, offering little incentive and lots of regulations. A $5,000 investment in a 3% interest account will yield a whooping $60 in tax savings. Reality is you can save a lot more by buying coffee at Tim Hortons rather than Starbucks every morning. Make a mistake of over-investing ($5,000/year limit) and all those savings will diminish through the 1% monthly interest charges by the Canadian government.

A self-directed TFSA offers real advantages over other types of investments available today. As with an RRSP, you are not allowed to take short trading positions and there is no margin trading. Thankfully, unlike in an RRSP which taxes all types of earnings at 100%, TFSA remains tax free. Please don’t misunderstand, RRSP is a great way to defer income taxes and save money for retirement, but here are the reasons why you should consider a self-directed TFSA:

1. You have already maxed out your RRSP contributions for the year

2. Your current marginal tax rate is lower than your anticipated tax rate at the time you will draw from your RRSP

3. You require access to your savings in the near future

4. You want to self-manage your account and you believe you can make good returns

Lastly, I would like to clarify that if you do not invest into a TFSA in 2009, your available contribution room will carry forward to the following year.

If you’d like to learn more about TFSAs please post a comment below and I’ll be happy to provide you with answers on TFSA investing.

Learning how to run/jog properly

I have been running for some time now, and at one point in time I was even training for a triathlon. That is until I got a meniscus injury in my left knee, which destroyed all my interest and ability to run for the next year. Two years have passed since then, and I feel that I’m ready to go again, but this time I want to do it properly.

I looked over some of the books on running and decided to order this one:
The Non-Runner’s Marathon Trainer by David Whitsett (The Non-Runner’s Marathon Trainer)

I plan on running about 3 days a week, and track my running progress carefully. I will update you all once I read the book and create my own schedule.

The new beginning

December of 2008 I told myself that I am putting my life on hold until I finish the CA exams, and I spent the next 8 months studying.

The exams are now over and it’s time to get organized. I am calling this blog post “the new beginning” because I plan on making substantial changes in all aspects of my life, including: personal fitness, finances, businesses and work in general.

Today, I sat down and figured out what my goals are at this point. If you would like to do the same but don’t know where to start, I suggest using the following categories:

1. Fitness and Sports – What sports would you like to play? How often? What are your weight goals? How will you get there?
2. Education – Is there something you want or need to learn? Write those goals down in this section.
3. Finances – Do you need to save money for something? Would you like to budget better? Write down realistic goals such as how much you would like to save and by what date?
4. Personal – Any personal goals such as spending more time with your family, reading a certain book.
5. Business – If you’re like me and you could not resist the call of entrepreneurial world, then write down what your goals are for each venture you’re planning.