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What kind of insurance cover do guesthouses need?

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By John Healy of Healy Insurances

The most suitable insurer and product for guesthouse insurance will depend on the size of the guesthouse.

Ordinarily the types of covers would include:

Material damage cover for Buildings:

 fixtures and fittings, stock, guest effects, and other assets that your business owns. Covers will include fire, flood, escape of water, theft, and storm among other perils. Cover extensions are available such as fire brigade charges, signage and goods in transit.

Money cover: 

Loss of money cover is usually standard up to €5,000. It is likely we will see a culture change post-pandemic due to reduced cash usage, but the extent of this change is not yet known. For now guesthouse policies will cover the loss of cash and cheques. The amount of cash covered can be increased depending on safe and security details. Personal assault cover can be included when carrying cash to the bank.

Employers, Public and Products liability: 

All guesthouse policies include liability cover. Employer’s liability is covered up to a maximum of €13 million and can be based on employee numbers and/or wages. Public liability can be selected within a range of €1.3 million to €6.5 million and covers your legal liability in the event that you are negligent and required to pay compensation for bodily injuries or damage to third party property. Projected turnover will determine the rate charged. Products liability provides cover if a third party is injured by a product that you have sold.

Business interruption:

This covers consequential loss of gross profits following an insured event such as a fire. It is important to review your gross profits sum insured on an annual basis.

Other covers:

This can include seasonal increases and deterioration of stock, loss of licence cover, glass breakage, cyber insurance, personal accident and many more.

A robust risk management structure can achieve more attractive rates and should include annual health and safety statement reviews, fire safety procedures, CCTV usage, and risk assessments.
Your policy should be tailored to your individual needs, so it pays to get expert advice from professionals who take the time to understand your business.

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Lower tax rate will discourage private landlords leaving the market

By Ted Healy of DNG TED HEALY Property owner groups are pushing for a new tax rate of 25 percent for landlords to discourage them from selling up and leaving […]

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By Ted Healy of DNG TED HEALY

Property owner groups are pushing for a new tax rate of 25 percent for landlords to discourage them from selling up and leaving the market.

Currently, landlords are paying over 50 percent tax on their rental income and the Government are looking at the possibility of reducing this in the upcoming Budget.

The Irish Property Owners Association (IPOA) and the Institute of Property Auctioneers and Valuers (IPAV) have called on TDs and senators in the Oireachtas Housing Committee to back a new tax rate of 25 percent.

This will incentivise landlords to stay in the rental market and “support new investment”, according to chairperson of the IPOA Mary Conway.

“The private investor is taxed at a marginal rate of up to 55 percent whilst the private equity fund/REIT pays zero percent tax on rental profit, once they exit the market within a defined period.”

Private non-developer landlords provide 94 percent of rental accommodation in the State with 70 percent of these landlords owning five properties or less.

Inheritance tax also plays a role in encouraging landlords to leave the rental market due to their age.

“75 percent of landlords are above the age of 50 and 48 percent are above the age of 60. This is important to note as taxation issues around inheritance are another contributor to landlords leaving the market.”

Meanwhile, Housing Minister Darragh O’Brien has said he wants to see measures in the Budget to help “good landlords” and keep property owners from quitting the private rental market.

Since 2016, there has been a loss of up to 8,000 landlords, representing around 44,000 tenancies, from the sector.

Mr O’Brien said landlords have been “demonised” and must be kept in the market while the State increases its stock of public housing. He said a record 25,000 social houses will be delivered this year.

The murmurings are that measures will be taken in the upcoming Budget that will help to maintain as many of those private tenancies as possible whilst building up the public housing stock, the mechanism remains to be seen.

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Predicting the future

By Michael O’Connor I received some bad news over the last few weeks, and it has changed my perspective on a few things. One thing I realised is that it’s […]

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By Michael O’Connor

I received some bad news over the last few weeks, and it has changed my perspective on a few things.

One thing I realised is that it’s the things you never see coming that truly impact your life.

We spend our days worrying about the obvious risks, and then our lives are upended by an event we could never have predicted.

This is true across so many aspects of life.

Investing is no different.

Much of my day job is focused on what happens next.

Are we headed for a recession, will the stock market crash, and how much will property prices fall?
These are all pressing questions, but these attempts to predict the future can be soul-destroying when the future is so hard to predict.

History is an endless stream of reasonable predictions upended by unforeseeable surprises.

In 2001, as we focused on the debt crisis in Europe, two planes struck the Twin Towers. In less than 90 minutes, the world changed in a way that was simply impossible to predict.

In 2020, as we focused on the implications of Trade Wars, a virus shut down the global economy, and 20 million Americans lost their jobs in a single week.

And on and on.

Paying attention to the known unknowns is essential, but it’s risks that we don’t see coming that truly define us.

No preparation, no protection, maximum destruction.

So, if the surprises are what really move the needle, why do we spend so much time trying to predict the future?

Simple put, it helps us worry less.

Building a vision of the future and convincing ourselves it will play out offers unrivalled piece of mind – a sense of control in an entirely uncontrollable world.

The warm cozy hug of certainty is hard to resist.

Despite the allure, however, we must ask ourselves; why obsess over predicting the exact path when the probability of us getting it exactly right is so low? Surely this is an obvious waste of time and resources?

So how can we better allocate resources?

Focus on the bigger picture

Instead of arguing over the minutiae, we need to focus on the bigger picture.

So many risks could play out over the short term.

Inflation runs higher, and interest rates pull down stock market returns.

The real estate market falters, creating economic ripple effects;

Energy shortages
A new COVID strain

The point is, there is always risk.

History is just one thing after another.

There is never a utopian state of calm, but over the long run, humans have prevailed.

In the face of wars, depressions and pandemics, people have become more productive.

We have continued to innovate and create products and companies that are more and more profitable over time.

This is the detail we often fail to see – the glimmer of light in a dark room.

Our ability to adapt and overcome over time is undisputed.

So, instead of trying to predict exactly what happens next, trust that we will prevail over time and focus on the larger trends.

What innovations will inspire the next generation of profitable companies? How will changing demographics change the world?

You will never get it 100% right but focusing on the stuff that really matters certainly improves your odds.

To learn what companies to invest in and to get direct access to my personal investment portfolio go to www.theislandinvestor.com.

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