Strategies For Beating Inflation

It used to be so simple: You’d take some of your money to the bank, wait for interest to accumulate and later in life, you’d have saved enough to enjoy your pension with a good cigar and a glass of delicious cognac. Unfortunately, with the interest rate at an all but historical low, things have become a whole lot more complicated and your savings may actually be worth less in twenty years time than they are today. The reason for this dilemma can be found in inflation. Inflation is an increase in the general level of prices of services and goods over a certain time. It can also be defined as the rate at which the general level of prices and goods rise in an economy. There are several effects associated with inflation. These effects include an increase in the opportunity cost for those holding money – which, in layman’s terms, simply means that alternative investment opportunities are becoming more attractive. However, you learn on how to protect your money by professionally applying strategies for beating inflation. Let’s take a look at them.

Invest in yourself.

Investing in yourself means using your savings portion to acquire relevant skills, which may further your chances of climbing the career ladder and thereby increase your income. Use the money you have saved to pay fees in a learning institution to acquire knowledge and skills. This will enable you to get a degree certificate which is very important when looking for a well-paying job. Skills to start your own business can as well be acquired in the process. To those already owning a business, it can be an opportunity for making the business more productive by investing professionally. Although it is rarely mentioned, this is actually one of the top strategies for beating inflation in the economy.

Avoid debts.

You can only truly make capital gains, if you’re not burdened by paying back interest. Especially if you’ve piled up high amounts of debt, the interest on the amount to be paid back can be higher than any interest rate currently available on the market for savers. The conclusion is that you need to start eliminating your debt as soon as possible and to get your budget into balance again. One way of doing this is to shift your daily money from a current account to a basic bank account (also known as an eccount), which doesn’t allow for overdrafts and can therefore support your financial goals. Make sure you have enough at the side to be able to afford the monthly fee, though.

Purchase tomorrow’s consumption today.

To avoid the negative effects of inflation, experts are frequently calling for you to buy tomorrow’s consumption today. What does this mean? Sometimes prices of goods in the market rise faster than the savings made. Therefore, it may be sensible to buy larger quantities of certain good now, to avoid spending higher nominal values on them at a later date. This strategy is more highly recommended the quicker the prices of goods are rising and may allow you to avoid the worst effects of inflation. Do note that this strategy works well with goods that are not perishable, but may be problematic or even impossible for perishable ones -and that all the goods bought must be well stored for future consumption.

Save in a foreign currency.

Another option is to make your savings in a foreign currency. The foreign currency in question here being the one sporting the highest interest rate. Currencies with highest interest rates have a higher chance to appreciate. This appreciation enables the investors to receive capital gains. Investors must remember that new currencies are being chosen annually. This is a very essential strategy to beat inflation as the investors earn good returns. In addition to the capital gains, investors earn higher interest income.

Have your savings in real money.

This point refers to the traditional metals of a very high value in the economy. Although they have been declared dead frequently in the past, gold and silver have performed tremendously well in protecting investors from inflation. For several years that have passed, they have appreciated against the dollar, hence promising high returns to investors. This strategy works by purchasing gold in future markets and then storing it. You can as well buy bullion coins from a dealer charging not more than three percent over the current prices in the market. This strategy has performed well in an inflationary environment.

Get to understand the financial markets.

Always strive to comprehend the financial markets. To have a good and comfortable retirement for instance, you have to be conversant with the inflationary policies used by the government. Get enough information on the leading strategies that can be professionally applied to beat inflation. For instance, purchasing corporate bonds at a discount can enable investors to earn some yields in the future when these bonds mature. Get to invest in companies that are known to raise their dividends over certain periods of time. Blue-chip companies have always performed well by raising their dividends. As a good investor, read the research reports on the strategies to beat inflation and follow twitter- and facebook-accounts of some of the leading finance experts to understand what moves markets and to anticipate financial threats before they materialise.

Hedge with sector funds.

Investors can protect themselves against inflation by investing in sector funds. There are several sectors in the economy where investments can be made in an inflationary environment. These sectors include technology and energy. Inflation is usually associated with a growing economy where all these sectors do well. If all these strategies are applied professionally, they can significantly help in beating inflation. Things may no longer be as simple as they once were – but that doesn’t mean you can’t still enjoy that cigar and cognac later in life.

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William Masters is as a widely respected journalist in international economics and personal finances. His reports come directly from London’s financial heart and deal with topics such as guaranteed bank accounts, banking technology and how to educate your children about budgeting.

What is Gold’s Role in the Changing Global Economy?

The global economic recession seems to have been a reality since forever now, and still there are no real concrete ideas as to how exactly we are to move forwards.  Some would say that it was always inevitable.  When you pay out more than you have in reserve, then of course one day it is going to catch up with you.  You can’t maintain a false reality forever.

In a way, what economists have been doing is looking for a shortcut around enterprise and sustainable progression, when maybe, quite simply, we had to play the long game.  Perhaps the United States thought that if they could get into power, then they could somehow maintain it, even when the paper money started to fold up around them.  It seems, however, that they underestimated the patience and resilience of countries, such as; China, Russia and India.

So, why is it that all of a sudden gold is at the tip of everyone’s tongues?  Surely if it was a simple as this then we wouldn’t have ever needed to move past it.  Gold was, after all, central to our currencies and banking systems up until President Nixon severed the link between gold and the dollar in the 1970s.

Petrodollar System

It was at this point that the US initiated the Petrodollar system, which began with agreements between Saudi Arabia and themselves, with regards to oil purchasing.  Fundamentally now anyone purchasing oil first had to purchase dollars, and in this way it was hoped that demand for the dollar would be maintainable.  In return, the Saudi’s were given weaponry and defenses to protect their reserves, from potentially volatile neighbours, including Israel.

This process created a new currency-commodity attachment, this time between dollars and oil, and as the global demand increased for one, so to it did for the other.  This created a faux-demand for dollars, which in reality was nothing more than a demand for oil.

With the US dollar struggling, however, many large oil producers are now re-examining the benefit of accepting paper, which is merely representative of an unstable economy, and numerous countries are looking to move away from the system.  Strong economies, such as China, India and Russia are looking to deal increasingly in their own currency, and there is even a move by some to bypass currency altogether and trade oil directly with gold.

Gold’s Role

Even before all of the oil arrangements, after the Second World War, foreign currencies were linked to the dollar, which in turn was tied to gold.  This gave countries a sense of stability and simultaneously gave the United States an excuse to print more money, which although causes inflation, if they are able to secure the demand for it, can too help a young country to develop at an unprecedented rate.

Of course, the major beneficiary of all this being the Federal Reserve, who loan all of the money to the US government and then one day demand its repayment with interest, which it sets itself.  In this respect it makes sense for the private cartel of banks running the Federal Reserve to ensure a steady demand for US dollars as they will ultimately benefit.

The United States soon grew reserves of up to 80% of the world’s gold and the economic arrangement made the dollar seemingly more stable than gold.  The issue was that with much of the world’s economies linked directly to the stability of one currency, any destabilizing factor would have profound global impacts, and in the 1970s that came through unpopular wars, uncontrollable deficit spending, and over inflated domestic spending.  Soon many countries were questioning the stability of being attached to the dollar.

With US debts getting out of hand, and the gap between the dollar and the US gold reserves widening, the demand came in for US gold ahead of the US dollar, and the States fell into its own trap, with gold reserves bleeding out of the nation and paper dollars flooding in.  Rather than consolidating and ending a period of rapid growth and over-consumerism, under President Nixon the choice was made to continue the spending spree, and in order to do so the dollar was detached from gold, thus making the dollar a floating currency, meaning that truly it was no longer representative of anything tangible.

The need to maintain a global appetite and indeed need for the dollar, in order to maintain its value was what led to the above mentioned petrodollar system.

So What Now for Gold?

The discussion around the petrodollar system goes a lot deeper and gives many clear indications as to the United States foreign policy in the Middle East and indeed their relationship with Israel, but there is not time to go into too much detail.

Fundamentally, with the US dollar attached to oil, The United States become almost solely reliant on a new commodity, one much less stable than gold, and it’s invasion of Iraq, for example, came immediately after their public defiance against  the petrodollar relationship.

With an increasing number of countries looking to detach themselves from the dollar, gold is the emerging replacement and thus central banks are busy trying to build up their reserves.  China’s encouragement to its citizens to purchase gold is one clear sign of this, and the banking powers’ move to making gold an asset 1 class too appear to be signaling this intent.

In short, it appears that gold is once more becoming increasingly connected to currency, and thus gold ownership is emerging as the most stable investment within a challenging economic environment.

William is an independent financial advisor and runs 247 cash for gold a website to turn your unwanted gold jewellery into cash on the spot.

Understanding the Rules on Double Tax Treaties of Cyprus

International tax planning dictates business owners to find a country that will offer one of the lowest tax rates for all their future transactions. It is logical to understand why this is of necessity. The lower taxes you need to pay, the more revenue your company will earn and more money that will be deposited to your bank account, rather than it being spent on company expense.

The Rationale behind Double Tax Treaties

Bellow are the reasons why double tax avoidance treaties is one of the primary elements screened by investors before they agree to establish investment in a particular country.

Prevention of Double Taxation

Double taxation is one of the problems of international business companies. They are forced to pay twice the taxes on the same profit gained simply because they were incorporated on two different territories. Double tax treaties prevent this from happening and make Cyprus an ideal destination. Rather than pay twice on the income gained, you only need to pay once at a lower amount.

Established Taxing Rights of States

Representatives of both countries sit on taxation rights, as they deem beneficial for their cause. It does not mean the same rules will apply in all countries where you intend to establish business, but it will certainly be more favorable rather than pursuing trade transactions with a country that does not have any of these agreements with another.

Security from Fiscal Evasion

Another benefit gained from double tax treaties is in relation to both the country engaged with it and the trader. The information exchange shared by these countries limits the possibility for tax fraud. Although, there is still much to be done on this end, it gives a certain assurance to both the government and business official that fiscal evasion could definitely be reduced.

The Cyprus Double Tax Advantage

If you can have a glimpse of the countries that Cyprus managed to sign Double Tax Treaties, then you will easily notice how it managed to convince even prominent countries like Germany, China, Canada, UK, USA, and Syria, and even countries in Asia and the former USSR. It must be the diplomatic skills of the Cypriot rulers that convinced other rulers to agree on the provisions they have specified in these treaties; but it is one of the best taxation policies you will find in the world. This makes Cyprus the ultimate business haven for those who wish to take advantage of the tax planning advantages it will do to their business.

Major Advantages Gained from Double Tax Treaties

It is hard to put into one article all the benefits provided by Cyprus Double Tax Treaties; however, this is some of the highlights contained in these closed negotiations as stated in Articles 6 to 23.

Income from Immovable Property and Capital Gains

There comes a point when businesses will decide to sell their real estate properties. Rather than being charged twice on the capital gained, the double tax treaty indicates the right on which it should be taxed, generally the place where it has been sold and bought.

Business Profits

The Cyprus International Trading Business will most likely gain profits from its branch offices, but it does not entail these profits will be taxed once again by the Cyprus government. Only profits gained directly from Cyprus would be taxed.

Shipping and Air Transport System

It is hard to identify which between two countries, gain more revenues from shipping and air transport system. To resolve this matter, it has been agreed that the country where the ship operator is a resident shall act as the place where it is to pay its due taxes.

Dividend Payments, Interest Payments, and Royalties

So long as dividends are to be paid to a foreign shareholder and it is earned outside of Cyprus, the government exempts payment of income tax from it.

Double Tax Treaties are certainly favorable to any business enthusiast. If you still fail to see it in full view then a corporate and legal consultant by your side will help you plan your business better. Begin your Cyprus IBC registration today, and enjoy the benefits you will gain from its Double Tax Treaties.

Dimitris Samaras has been observing various Double Tax Treaties entered upon by Cyprus in the past decade. He is certain offshore companies in Cyprus will benefit more from it and encourages more businesses to explore the opportunities offered by the government.

Finding a Good Fund Manager

Why use a fund manager who charges for his or her services when an investor can make their own investment decisions thus saving on management charges?

Quite simply, because the investor may not have any experience of knowing which equities to buy and sell and feel that a fund manager will have a far greater chance of achieving a better return than they would have done had they managed the day to day running of their investment portfolio.

Many fund managers do not produce a better return than what the market is achieving so surely there is a lot to be said for an investor just going out their and investing their monies in index tracking funds that have low management charges. That may well be an option but what if it were possible to find a fund manager who has a reputation for consistently outperforming the market and the performance of index tracking funds even after allowing for their management charges.

So, how does someone go about finding a good fund manager who is capable of achieving the above? There are, for instance, several sites on the Internet that undertake research into the performance of various funds that will provide some valuable information about them but with so many funds in existence where is a good starting point?

This is probably going to upset a number of fund managers but there is a lot to be said for avoiding the large fund management groups that are run by the likes of insurance companies and the major clearing banks. The reason for this is because their priority is not so much fund performance but more to do with growing the size of the fund by taking on new clients as well as retaining existing ones as the larger the fund value the more income is generated in fee income.

However, it could be said that, if the fund is not performing, more investors are likely to move away. Rather surprisingly, this does not appear to be the case as human nature dictates that people do not like change and this applies to their investments. Unless something drastic happens to the value of their fund they are likely to remain with their fund manager for the long term.

So, instead of investing with a large fund manager, an investor could consider investing their monies with smaller fund management companies. It is quite likely that the fund manager will have a personal investment in the business so the fund’s performance is obviously important to him or her and, with a bit of perseverance, this information can be ascertained. Also, the investor could focus on funds with smaller fund values as the manager has more time to closely research the equities within the fund.

A good fund manager should know when to move funds into cash to protect a client’s investment so an investor could look into a fund’s performance prior to the start of a drop in the stock market to check what movement there had been out of equities into cash.

Good fund managers are out their – it just requires a bit of detective work to find them.

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Scott Bryan is a financial blogger who enjoys explaining the arcane world of finance in everyday terms. Formerly a high street bank manager for over thirty years, he knows that everyone has unique requirements and so is dedicate to helping you find the right solution for you. He now works as a freelance financial writer when not consulting for Profile portfolio management software

The Gold And Silver Investor’s Guide

Single individuals and entire countries have been investing in gold for quite a number of centuries. If you are looking for a good place to put your extra money, be sure to consider investing in American gold and silver eagle coins. Many people would agree that gold is the most popular investment throughout America and the rest of the world, and silver is following very closely behind.  Considering these facts, you would be wise to start investing as soon as you can.

If you are just getting started in investing, here are some tips to help you successfully invest in gold and silver American eagle coins:

1 – Find A Reputable Dealer

Whether you are purchasing gold or silver, from the internet or in person, it is absolutely essential to find a licensed dealer who has a very positive reputation. There are too many dishonest traders out there that you simply cannot afford to invest in a source that you can’t trust completely. To avoid these types of scams, find a dealer who has a lengthy reputation for high quality, and make sure to avoid any dealer who seems questionable.

2 – Pick A Size For Your Coin Investment

When you invest in gold or silver American eagle coins, you can generally choose between a few different sizes. Some common sizes include:

  • 1 oz. coins
  • 1/2 oz. coins
  • 1/4 oz. coins
  • 1/10 oz. coins

As you might guess, 1 oz. American silver eagles are more valuable than 1/10 oz. coins. However, this doesn’t mean that the smaller coins are a bad investment choice. Your decision should be determined based on how much you personally want to invest, and the number of coins you wish to purchase.

3 – Keep Your Investment Safe With Wise Storage Techniques

When you invest in anything valuable, it is important to make sure you know how to store it properly. Although it may sound trivial, your storage choices could make or break your investment. When choosing a place to store your American gold eagle coin or silver coins, here are some things to consider:

  • Above all else, keep your silver and gold safely protected from theft and damage.
  • If you choose to buy a safety deposit box at a local bank, remember that it may not be insured by the bank, and you will only be able to access its contents during regular business hours. In extremely rare occasions, gold stored in a bank may also be subject to government confiscation.
  • Some people choose to bury gold and silver in an airtight container in the ground. This can be a good way to reduce the risk of fire or theft, but it can also make your possessions difficult to access later on.
  • Many people hide their gold and silver inside their homes in a safe or beneath floor boards. If you choose to use a home safe, remember to bolt it to the ground, and make sure to keep the key protected.

4 – Start Investing As Soon As You Can

The sooner you can start investing in gold or silver American eagle coins, the sooner you can start enjoying the confidence and security of a wise investment.

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Great Southern Coins is a leading rare coin and precious metals firm recognized as one of the leading 1 oz silver eagle coin dealers and one stop location for all your precious metal needs.

How Refinancing is Like Dating

Mortgage refinancing happens when you change an existing mortgage by replacing it with another one. You have the option of sticking with your current mortgage lender or availing of the services of another mortgage broker. The decision on this matter could be affected by the various mortgage alternatives and options that will be offered by your mortgage broker. You will know the right package when you see it.

Finding a good refinancing package: It’s Like Online Dating

First and foremost before shopping for any refinancing option, it is imperative that you take a good look at your up to date financial condition to have an idea of your current state of affairs. You could then look for various mortgage companies or mortgage lenders who could offer you a refinancing package that gives you the best deal possible as well as the most advantages. You can research for a lot of information on the internet as majority of these mortgage companies and mortgage brokers have websites giving information with regards their services and financial packages.

What to look for in a mortgage broker/lender

Choosing a mortgage broker/lender is not at all an easy task. It would require on your part a lot of thought and consideration as well as numerous calculations. It’s like dating: you have to really feel comfortable with the lender and like what you see. Some of the factors that could help in your decision would be the necessary fees, the term of the mortgage, the rate of interest, closing costs and required down payment just to name a few.

Requirements in the application of a mortgage refinancing

Some of the basic requirements when you apply for a mortgage refinancing would include but would not be limited to the following: complete name, complete address (current as well as previous addresses), information with regards your employer, employment details, social security number, monthly earnings (gross), data on your properties and a statement of your assets and liabilities.

When is mortgage refinancing ideal

When a good mortgage refinancing offer comes along, one shouldn’t pass up the opportunity of availing of the mortgage lender’s good package. In most cases, people wouldn’t even bother to wait for the end of the mortgage term. If the new mortgage package offers many advantages to the borrower like lower interest rates, shortened mortgage life and lowered monthly payments, then the borrower should grab the chance to have his mortgage refinanced.

Mortgage refinancing expenses

If a borrower would decide to have his current mortgage refinanced, the mortgage lender charges a certain penalty for the interest payments that he wouldn’t stand to collect anymore. Refinancing a mortgage before the end of its term would make the borrower pay for penalties. However, the penalties may be offset by the savings that you could gain from the new mortgage like lower interest rates. Other costs would include an application fee associated to the cost of processing your application. A fee associated with the cost of searching for the property’s ownership in public records. There is also an appraisal fee to get the current market value of your property and other miscellaneous fees that you could discuss with the mortgage lender. Depending upon the agreement you would arrive at, there are instances when you could ask for certain fees to be waived.

Belinda Mills is a blogger at irs-easy.com

Renting Vs. Owning: What are the Benefits of Mortgage Loans?

One of the biggest decisions that you will face is whether to rent or to buy a house. This is because you are making a big investment that will last you a long time. Many times, access to a good mortgage loan will help you achieve the goal of owning a house. By now you are probably wondering, what are the benefits that a buying a house using mortgage finance give you? This article looks at the benefits of mortgage finance.

You have different mortgage types to choose from
There are different types of mortgage loans that you can choose from. This makes it possible for you to select the best one that suits your budget and preferences. Basically, there are 2 general types of mortgages: fixed-rate and adjustable-rate mortgages. These two types have different variations.

The fixed rate mortgage allows you to pay fixed mortgage payments which allow you to be able to budget and plan your expenditure easily. The payments in this type of plan are fixed over the mortgage life. On the other hand, the adjustable-rate type will have mortgage payment that varies with time. The adjustable-rate mortgage is suitable if you expect your income to increase with time.

Choose how you repay the mortgage
Various ways exist in which you can repay the loan you have received. These payments will depend on the prevailing culture, tax laws and the locality where you live. The most popular repayment form is by making regular payments on the principal sum. The payments that you submit will depend on the how the value of money is expected to change over time. Different locations have different ways of determining the interest.

Tax benefits
During the period of loan repayment, the monthly payment you submit will be tax deductible. The tax rate that the interest attracts is low, helping you save some money. The money you save on the interest will help you achieve the dream of owning a home.

Purchase a property more than your savings
At times, you have saved for a long time to buy a home. This can take a long time yet the price of homes increase time and again. You can use a mortgage to buy a property that is several times more than the savings you have. Buying a house will also help you multiply the return on the amount you invest in the home.

Once you have taken out a mortgage loan, you will get protected from inflation and the mortgage exchange rate. Fixed-rate mortgage plans will not change thus the payments will not change even in circumstances where there is inflation.

Leverage
This is one of the main benefits of a mortgage. When you take a loan on a home and it appreciates for the period of the loan repayment, you will have made a profit on the investment. This profit will be equal to the amount of principal plus the down payment. If you prefer to buy a home using cash, the profit you would have made would be equal to the appreciation rate. This allows you to make a profit on the banks money.

With the number of options that are available for you to choose from, you will not take time to find the right package for your needs and enjoy these benefits of a mortgage loan.

Roger is a freelance writer that loves to share tips on parenting and frugal living in general. You can have a look at his financial site where he covers topic such as ppi claims.

Are you Eco-Conscious? Switch to Online Billing Service

Are you Eco-Conscious? Switch to Online Billing Service

The smart phone has become one of those devices that are now found in the pocket of almost every individual. The drop in prices is, of course, a big factor in favor of the rise in sales figures. However, another big reason is the effectiveness of the smart phone themselves. They have gone from being simple entertaining gadgets to devices that we depend upon for many of the crucial aspects of our lives. One of the best services that a person can take advantage of on their smart phone is the ability to pay their bills. Bill paying services have become a huge hit with smart phone consumers, who can pay all their bills with just a couple of taps on the screen. Although praised for its efficiency in making a persons’ life easier, the service also has some added benefits that have not gone unnoticed by the scientific community, especially ecologists.

The advent of paperless billing

The biggest problem an individual faced with old fashioned paper bills was the massive clutter that it would cause. It could take hours to sort through the pile of paper just to find a single bill. While digging through the piles and muttering obscenities, one rarely has time to focus upon the massive impact that paper billing has on anything else besides us. However, the truth is that paper bills do have a massive impact on the environment, a factor that affects all of us. Corporations started realizing that with the rise of the Internet, information disseminated quickly and businesses were under closer scrutiny. A corporation could not risk itself being shown up as an irresponsible financial entity with no environmental plans; that would be a public relations disaster. So businesses tried to find ways to seem eco-conscious while still managing to cut costs. It didn’t take a genius to figure out that eliminating the amount of paper and ink used to print out paper bills could effectively kill two birds with one stone. Soon, all companies that needed to bill customers started offering paperless billing and now it is impossible to find a service provider who would shrug at the request of paperless billing. In fact, companies encourage paperless billing, even charging a small fee for those who demand an old fashioned bill.

Saving the environment starts at home

Online billing services have been an absolute boon for people who consider themselves as environmentally conscious. For most ordinary people, it provides a good feeling of knowing that by switching to online bill paying, they are helping the environment while making their own life a bit easier. Online bill paying services can be accessed via desktops, laptops, tablets, smart phones – pretty much any device that can transfer data online. Most people are shocked to learn about the number of trees that have to be cut down just to produce paper for bills. Even after the bill has been thrown away, the ink from the bills are not exactly good for the environment. Paperless billing and bill paying services get rid of the environmental harm caused by traditional billing.

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The article was written by Snaggets who is associated with many finance sites and blogs. She recommends to make online payment using searscard.com mobile payment apps  which is the most secured online platform for making any online transaction.

How to Protect Yourself From a Sham Tenancy

The shape of the property market is changing. The cost of living has been rising steadily since the 1970s, whilst real-term wages have lagged behind. Nowhere is this disparity more evident than in the case of property prices, which continue to grow at a rate exceeding inflation. For this reason, the number of people renting their home has grown by over 50% since 2004. As the number of renters increases, so too does the power of the private landlords who rent out their properties. Unfortunately, this also makes it more likely that this power will be abused by unscrupulous landlords who know that they can always get new tenants, especially for property in London. Read on to find out how you can protect yourself from a sham tenancy.

Lease or Licence?

The distinction between a ‘lease’ and a ‘licence’ is crucial. A lease gives the renter a legal interest in the property, whilst a licence to occupy does not. This is important because only a lease brings the tenant under the protection of laws passed to protect them.

What’s the Difference?

The simplest example of a licence to occupy is a situation in which the owner of property has a relative to stay. This is an informal agreement wherein the visitor is allowed to enter and use the property, but only with the continued permission of the owner, who can ask them to leave at any time. Problems arise for tenants who believe that they are leasing their home, but who are actually only licensees. This is not confined to completely informal arrangements like the one above – it is perfectly possible to sign a contract, pay rent, and still not be a leaseholder.

How to Avoid Becoming a Licensee

If you can pay rent and still be only a licensee, how is it possible to ensure that your tenancy is not a sham? The defining factor is something called the ‘right to exclusive possession’. Simply put, this means that a tenant with a genuine lease has the ability to allow or refuse anyone to enter the property. The landlord must not be able to come and go as they please; the home should be the tenant’s to control. Look out for contract clauses which allow the landlord to enter the property freely. These may be disguised as cleaning or maintenance commitments. A real tenancy will permit the landlord to enter only with a minimum of 24 hours’ notice, or in the case of an emergency. If the contract states gives the landlord any further rights, walk away. By agreeing to a licence, you enable the landlord to be a nuisance and to evict you quickly and easily at their pleasure.

Author Bio: John McConnelly is a property law consultant employed by several estate agents in London. In his spare time, he loves to blog and discover new foods.