My Own Advisor

Last year, my front lawn and parts of my back lawn were decimated by grubs.  It was a hot and very dry summer in Ottawa last year and the lack of rain over a period of many weeks coupled with some extreme heat beat my lawn into submission.  That hot, dry weather also encouraged significant grub growth.  Actually, the grubs didn’t do all the damage last year.  The damage went over the top thanks to some huge crows and a few night critters like racoons that dug up my lawn recklessly to find and eat the grubs as appetizers.  The damage started in July and continued right through to October.  Here is a picture of my front lawn today:

As you can see, there is a recovery process in motion – there are small signs of life.  For today’s post, I thought I’d take a departure from the personal finance and investing stuff and tell you what my recipe is for a healthy lush lawn this year, on a modest budget of course.

1.      Bye Bye Thatch

Thatch is dead and/or dying matted grass that accumulates on top of the soil.  Thatch prevents air, water, and fertilizer from reaching the soil.  This is not good folks.  So, I removed the thatch this spring with a metal rake.  It took me a few hours last weekend and this past weekend, but I raked our 0.5-acre lawn from stem to stern.  After the snow melted this winter, our lawn was brown in colour and very thin.  Every year actually, Ottawa’s harsh winter weather wreaks havoc with our lawns. To promote the recovery process, thatching was a must.  Getting rid of the thatch didn’t cost me a penny, just my time.  At least the weather was good when I did it.

2.      Hello Seed

I’ve read that overseeding is a great way to recover your lawn from winter; it will green up the lawn, thicken the turf and introduce new varieties of grass to existing turf.  Overseeding will also help crowd out weeds and withstand more bugs.  I typically use a hand-held spreader to overseed our lawn, going just above the seed manufacturer’s recommended spreading rates.  Unlike thatching overseeding will cost me money.  I decided to purchase a few bags C-I-L Golfgreen Grass Seed this year.  No, this is not a sponsored post.  I read this particular grass seed contains endophytes which should help my lawn and ward off grubs.  You see, endophytes are fungi that live inside grasses or plants in a symbiotic way.  Endophytes are natural and quite desirable (I’ve learned) in turf grasses.  While living off the host the endophytes will produce alkaloids that are not appealing to many insects; these alkaloids are essentially toxic to armyworms, chinch bugs, cutworms, green aphids and webworms.  Endophytes are basically a biological insecticide.  To date, I’ve purchased three bags of C-I-L seed at about $13 per bag ($39 total).  I’ll probably need a few more bags in a couple of weeks as I continue the overseeding process.

I’ll also need to buy some more good soil to mix the seed with.  To date, I’ve spend about $20 on soil and will likely need to spend at about $20 every month going forward mixing the seed with good organic soil.

3.      Welcome White Clover

With my degree in Biology, I probably should have remembered the benefits of clover in a lawn.  Clover not only greens a lawn, even during dry spells but it’s a natural fertilizer for your lawn by fixing nitrogen.  Using white clover on your lawn, you don’t have to buy any more lawn fertilizer – ever.  While nectar from the flowers clover produces might attract some bees now and then, you can rid yourself of this issue by mowing your lawn at a modest height, cutting the flowers during the blooming season.  The best part about white clover, apparently it is toxic to grubs.  A 500-g bag of white clover costs about $10 at my local hardware store down the road.  That small bag should cover a few hundred square feet.  I’ll probably need many bags this year (maybe another 5 bags ($50)) to encourage clover growth in areas where my lawn is well-established and where I’ve needed to start the lawn almost from stratch.

4.      Just Add Water

Based on seeding instructions, I’ll need to water my lawn liberally for about 7-10 days in a row to promote seed germination.  After that, I should be able to cut back to 2 days per week, eventually 3 days per week in another month.  Seeds cannot germinate unless there is good seed-soil contact, sunlight and lots of water for nourishment.  I’ve read you need to water your lawn enough to get the soil wet to about 4”-6” down or the equivalent of 1″ of rain per week.  It is not frequent watering you need for your lawn (once established) but deep, prolonged watering that will produce and maintain a healthy root system.  We have a well, so we don’t pay city water or sewer fees but I’m very water conscious so I don’t want to water the lawn recklessly.

Over the spring and summer, I’ll repeat the cycle of overseeding, adding clover and thorough watering.  When I need to mow the lawn I’ll keep the clippings on the grass and avoid cutting the grass too short.  I’ve read 3″ is a good height to maintain deep grass roots.

Hopefully…that should do it.

When I add it all up, the supplies to recover my lawn this year will cost me a few hundred bucks.  Not a killer expense but certainly enough money to be spent.  Last year was a disaster for our lawn.  Hopefully this approach on a modest budget will bring it back into top shape.

Got any tips for my lawn this year?

Thanks for reading and sharing this article.

The following is a guest post by Ratehouse.ca – Home of Canada’s Best Rates.  

If you are interested in submitting a guest post then please click here.

The global financial crisis has caused a significant decline in almost all industries. However, if you’re in Canada and your interest lies in real estate, then you’re in luck. The diversity of Canada’s regional economies has reasonably protected its real estate market from the financial crisis. As long as you know where to invest, you’ll realize that real estate investment is still very lucrative in Canada.  Of course, you need to realize as well that real estate investment involves a lot more than buying and selling properties. There are a bevy of critical aspects you should consider, among them home insurance and inspection. Furthermore, the fact that real estate has a huge potential for gains doesn’t mean there are no risks involved. In fact, there are a lot of risks, which is why you really need to know exactly what you’re getting into.

Renting out property is one of the oldest practices in real estate. The best advice in this case is for you to charge just enough to cover property maintenance costs, including taxes, home insurance, and mortgage. When mortgage is finally paid, you can start counting most of the monthly rental as profit. This takes time and patience, but it may be well worth it.

For some people, being a landlord is just too much to handle. In this case, you may want to consider being part of a real estate investment group. With this setup, you get to buy one or more units in properties such as apartment units. The company that bought the property is responsible for managing it and taking care of expenses such as home insurance, inspection, taxes, and mortgage. They will then take a certain percentage of the rental charge. You get to profit without dealing with the hassles of being a landlord.

Another breed of real estate investors is known as traders. What they do is purchase property, hold it for about three or four months, and then sell it for a good profit. The practice is also known as flipping, as it involves buying the property at a very low price and then selling it for a much higher one. Bear in mind, though, that this strategy works best for those who have excellent renovation skills.

Real estate investment trusts (REITs) may also be worth considering. Many people appreciate the hassle-free nature of REITs. Among other things, you don’t have to worry about mortgages, taxes, and home insurance. Practically all you need to do is buy shares in a real estate company. You get to own shares in such properties as commercial complexes, malls, or hotels and profit from these properties without the hassles of actually managing them.

These are just some of the options available to you if you’ve decided to invest in real estate. You may want to start out by investing in such areas as Barrie (Ontario), Surrey (British Columbia), and Red Deer (Alberta). These are identified as the best places to invest in real estate in Canada. You may also want to get guidance from a professional at the outset. Once you become familiar with the whole real estate investment setup, the things that cause the most concern in the beginning like home insurance will soon become just minor issues.

Author Bio:

Helen Prasad is the Co-Founder/Business Development Manager at Ratehouse.ca. In her opinion, great investment advice can play an important factor in our everyday stressful lives, so people need to be more aware and detail-oriented. You can stay in touch with her on Twitter as well.

Thanks for reading and sharing this article.

Relying on your home as your sole retirement nest egg might be a consideration for many boomers but it’s a very risky proposition in my opinion.  I wouldn’t do this for many reasons.

Reason # 1 – the real estate market, like other markets, is cyclical

In my hometown, the average price of a home in 2011 sold for $344,791.  Compare this to prices in 2007, where the average price of a home in Ottawa sold for $273,058 – a difference of about 26%.  Sure, folks relying on real estate in recent years to pad their portfolio have done very well but I would not want to rely on this great run continuing.  Just like the stock market, what goes up often comes down.  Even if things don’t bottom-out but instead stabilize, who knows for how long.   There are always risks with the unknown.

Reason # 2 – home ownership is not diversification in practice

In a recent Bank of Montreal study, respondents stated they are not confident in their ability to save for retirement.  Because of this, 4 in 10 Canadians are looking at their home to help fund their retirement.  As a boomer, the last thing I’d want to do is put only one egg in my retirement basket.  Using only your home for your retirement nest egg puts too much pressure on one asset class – so you are not diversified.  At some point, retirees will need to transition from their asset accumulation years to their asset withdrawal years and if you only have one asset to withdraw from, that definitely restricts your portfolio options.

Reason # 3 – owning real estate is a privilege, not a right

For 20, 30 and 40-somethings busy with young families or establishing their careers, I don’t think mortgage debt is a huge issue as long as it is being paid down.  I’m probably biased because I’m in this camp myself however my point is receiving the money in the first place to buy a home is a privilege, not a right.  If we were go to back in time, I doubt my wife and I could afford this home at the interest rates of the early ’80s.  We’re ready to withstand borrowing rates of about 6-7% with our current home but it’s really a luxury of first world living to borrow the kind of money we do.

Reason # 4 – who knows what the future holds, home equity included

Related to my previous points home prices have been on a tremendous run over the last decade but nobody knows what the future holds, with interest rates, inflation, the stock market, real estate or anything else.  For this reason, counting on the equity in your home for your sole retirement plan could be disastrous.  For example, if you’re thinking of a reverse mortgage, these products often come along with an age restriction and a cap on the amount of money that can be accessed – that might be very limiting to a retiree on a fixed income.  These products also charge a higher rates of interest.  A Home Equity Line of Credit (HELOC) is an option for boomers, and might be a viable one when interest rates are low, but who knows where rates might be years down the road.  Again, folks might want to refresh themselves on what “normal” interest rates are over a longer trend.

Reason # 5 – just like time the demographics are-a-changing

Demographics may also cause a shift at some point meaning more boomers may be selling than the younger generation is buying.  This will be great for 20- and 30-somethings, who might still be renting and trying to get into the housing market.  This is not so good if you’re a senior competing with other homeowners trying to sell your house and downsize.

I suspect some boomers or seniors nearing retirement will be fine if they only use some real estate assets to fund their retirement, as part of a broader plan.  For others who are focusing on using or leveraging their principle residence to fund retirement – that’s risky game I’m not playing.

Thanks for reading and sharing this article.

 

Every once in a while, along comes a home improvement project you need help with.  I suppose that’s what professionals are for.

For example, last spring, we needed a new roof installed on our home.  During my lifetime, I’ve seen a few roofs installed but I’ve never actually installed one myself.  For a big, important project like that, my wife and I felt we needed to hire some of the best professionals in the business to protect our investment, our home.  After a great deal of research, we settled on a company and didn’t look back.  Almost a year later after the installation (and a fat line of credit along with it) we are happy with the product and felt the money was well spent.

Other home projects are often necessary but on a much smaller scale.  Fixing the backyard deck due to some safety concerns and installing a backup sump pump are some of the smaller projects we completed last year.  The latter, I could have probably done myself if I made the appropriate time to learn but I wasn’t comfortable with the job so we hired a professional plumber instead.  The plumber was from a reputable company in Ottawa.  I suppose that was mistake #1, never assume.

In any event, while booking the appointment with the company I informed them of the sump pump we wanted to install, a 1/3-hp submersible pump with an automatic float, fairly standard stuff so I’ve come to understand.  A sump pump in our home is essential because of the high-water table in our area.  Last spring, the only pump we had ran almost non-stop for about two weeks during the winter thaw.  Without it, we’d have a flooded basement.  This original pump worked just fine but we wanted a back-up since the original was 12 years old.  With specifications, the new pump and equipment in hand, the plumber arrived within a week of my phone call.  He quickly surveyed the situation, cut some PVC, installed the check-valve and the pump, tested it with me and was quickly on his way.   What he did in 45-minutes would probably take me an entire day.  Initially, the new back-up pump and the original pump worked perfectly in tandem and we were happy everything had gone to plan.

Fast forward to this winter…

Even though our sump pit was dry (no water in it) I figured it was good to test both pumps before the thaw of 2012.  We didn’t get tons of snow in Ottawa this winter but surely the pumps would be running all the same.  I filled the sump pit with water and triggered each automatic float.  Nothing happened.  I tried it again.  Nothing happened.  In fact, upon the second test, I heard the pumps running but they were sucking air, not water.  I was perplexed.  Both pumps had been working perfectly only 4 months before!  What on earth had happened?

I called the company that did the installation and explained the issue.  Within a few days they sent the same plumber who performed the installation to our house to troubleshoot the problem.  Upon arriving at our house a couple of weeks ago, the plumber said “it’s not uncommon to have an air lock in your line when a sump pump that is supposed to be submersed in water, is not.”  The plumber went on to say “all you need to do is make sure your sump pit is always filled with water.  That way no air can get inside the line.”  He proved his point by filling the pit with water, unplugging and plugging in each pump from the electrical outlet, releasing the air lock from each pump discharge line and then triggering the automatic float.  Everything worked.   The head-scratcher for me was, what if I’m not home to ensure the pit is always filled with water to perform this procedure?  The plumber’s response to my question was, “just check it every few days and it will be fine.  After a few weeks, the pumps will sort themselves out.  I see this all the time.”

Skeptical still, I said thanks for the no-charge troubleshooting and the plumber was on his way, again. 

I remained skeptical after his visit; something wasn’t sitting right with me so like an obsessive dog with a bone I went to the pump owner’s and installation manual.  I wanted to read step-by-step what the installation process was for these things and what the manual said about air locks.  In some fine print in the manual, to my surprise, I read the following in the “Pump Servicing” section:

Problem:  “Pump runs but does not deliver water.” 

Troubleshooting:  “These pumps have a small air vent hole in the impeller cavity to let out trapped air.  If this hole becomes plugged, pump may air lock.  To break the air lock, use a small screwdriver to clear hold in the impeller cavity.  As a secondary precaution in installations of this type – 1/16” hole should be drilled in the discharge pipe below the check valve.”

Huh?  What?

The plumber never drilled this hole.  I watched part of the installation process and I know he didn’t do this.  Why didn’t he?  Why didn’t he pursue this precaution during his second visit to our home to troubleshoot the air lock?

I was mad but also relieved because even though a professional did the installation, the amateur in me had a solution.

After reading a few online plumbing forums about this issue, I decided to do the work myself.  It was simple enough.  I drilled one 3/16″ hole (based on the forum suggestion) into each discharge line below the check valve.  You can see what I mean from this diagram courtesy of the Plumbing Forum:

After the holes in the PVC pipe were made for each line, I filled our sump pit with water and bingo – pumps operational!  I tested both pumps a couple more times, to ensure it wasn’t a fluke and sure enough, they were up and running.

I was relieved but also annoyed.  

What good is hiring a professional when they deliver amateur results?

I learned a few things from this small project that I’m going to try and remember for future projects if/when we need more help:

1. Like financial products in your portfolio, never assume past performance is any indicator of future performance.  A reputable company doesn’t always means reputable professionals who work at them. 
2. Make a list of questions about the product and service you are purchasing and make sure you ask those questions beforehand.  
3. Focus on problems you might encounter with a product or service.  No question is a stupid question when it comes to your home and the hard-earned dollars that go into it.
4. Ask for the owner’s or installation manuals for the product being installed.  Read the manual(s) thoroughly at some point, preferably before or at the time of installation.  Ask the professional any questions about what’s in or not in the manual(s) that you don’t understand.  Even if you can’t do the work yourself, the more you can understand about a product the better equipped you are if/when something goes astray.     
5. Don’t assume after any product or service work, everything is fine and it will stay that way.  Follow-up and keep an eye out for issues.  Challenge the product as advised.  Just like the financial products in your portfolio, risk comes with not knowing what you’re doing or monitoring.
6. Trust your instincts.  If something looks wrong, feels wrong, it probably is.  Don’t delay and get to the root causes. 

As with most things in life, you usually get what you pay for and ask for.  When dealing with professionals, or who you think are professionals, do your own due diligence, ask lots of questions and trust your instincts.  Your home is arguably the largest investment you’ll ever make, so take good care of it and make it last.

Have you ever had any experiences like mine?  Work done by a professional with an amateur result?

Thanks for reading and sharing this article.

 

For my growing subscription base in the United Kingdom (over 100 visits from England alone last month), the following is a guest post from moneysupermarket.com, a leading British price-comparison organization specializing in financial services that includes mortgages, credit cards, insurance, travel, cell phones, and more.

If you need to secure a loan on your property, you have the option of remortgaging or taking out a secured loan. Each option has its benefits and drawbacks.  Sources such as moneysupermarket.com can provide guidance as to whether a secured loan or remortgage best suits your needs. The pros and cons listed below can be applied to your individual circumstances.

Remortgaging Pros and Cons

Pros:

The interest rates on remortgages tend to be on the low side. With the exception of people with poor credit, most individuals who remortgage will not pay excessive amounts of interest on their loan.

The debt repayment period for a remortgage may be more forgiving than that of a secured loan. Those who remortgage are granted up to 40 years to settle debts, while secured loans may involve shorter repayment terms.

Remortgages offer the convenience of a single monthly payment. While secured loans are paid off separately from the traditional mortgage payments, remortgages merely change the terms of the existing payment.

Cons:

People with a poor credit history may have a difficult time in arranging a remortgage. Lenders may not be as willing to finance money toward those with bad credit than they would toward those with a high credit rating.

The fees involved in remortgaging are typically high in several areas. When negotiating a remortgage, people should be mindful of the additional legal, administration and lender arrangement fees that are included.

Secured Loan Pros and Cons

Pros:

Secured loans are easier for people with poor credit to obtain. A bad credit history may result in increased interest rates on a secured loan, but the loan itself is more accessible than a remortgage in this situation.

Secured loans do not typically involve pay-off penalties. Unlike remortgages, which sometimes carry penalties when the loan is paid off early, secured loans can be closed out early without prepayment fees.

The process of receiving a secured loan usually moves quickly. While a remortgage can take a minimum of one month to negotiate, a secured loan is usually granted within a two to four-week period.

Cons:

Secured loans may have higher interest rates and fees than those associated with a remortgage. Closing fees are an example of fees that are not bundled in with a secured loan payment.

Secured loan payments are not included with a monthly mortgage payment. This means that the amount of money that a person repays monthly, to two separate lenders, will be higher than that of a remortgage.

If you are still uncertain in regard to obtaining a secured loan or re-negotiating the terms of your mortgage, seek advice from a financial professional.

My Own Advisor:  Regardless if you live overseas or here in North America, do you have any experience with remortgaging your home or taking out a secured loan?  I’d like to hear from you!

Thanks for reading and sharing this article.