5 Questions to Ask Before You Renovate

Over time, almost any home could use an upgrade. Not only is wear and tear an issue, but our needs change as we do. Birth, death, marriage, the kids going off to college… all can have a profound impact on the utility of our home and the pleasure we take in it. Home renovation can be an excellent way to improve your quality of life, but is it always the best choice? By asking yourself these five essential renovation questions, you can gain real insight into the right decision.

1. What are your renovation priorities?
Yes, if you could do it all, it would be great. But odds are you won’t be able to do it all. So brainstorm all of your renovation desires and write them down. Next, rank them by order of importance. Some will be large and some will be small. Consider your budget. Would you be happier with one large revision, or would several small ones be better? Prioritize to clarify!

2. How disruptive will the renovation be to living in your home?
Understanding your appetite for disruption is important. Some renovation projects are minor and may take a day or two. Others could drag on for months and months. What are you willing to tolerate?

3. How will the renovation impact the home’s balance?
Major renovation projects can throw a home’s feel, flow, or look out of line. If you put a commercial-grade, ultramodern kitchen, will the nearby living room look shabby or antiquated? What if you add a bedroom but you only have one bathroom?

4. How long will you enjoy the renovation?
People typically renovate when they’re planning on staying in their home. Which direction is your neighborhood heading? Are you planning to downsize in a couple of years? A renovation may be overkill if you don’t think you’ll stick around long.

5. Will you recoup your investment?
Happiness with your home should be your top priority, but before you renovate you should understand that a major renovation isn’t a guarantee that you’ll get your money out when it’s time to sell. This may or may not be a factor for you.

I’m perfectly happy to walk through these questions with you. Renovating may be the right choice, but sometimes only a move will do. Either way, I’m here to help:

Ways to Save on Your Homeowner’s Insurance

Homeowners insurance is vital for protecting your investment. It’s also required by lenders holding the mortgage on your home. For some reason many homeowners overlook ways they can save money on their premiums. Shopping around is a good idea, but much like auto insurance, there are many simple things you can do to impact how much you pay annually to protect your home.

Raise your deductible.
Do you really need a low deductible on your insurance policy? Many people can absorb the hit if they go from a $500 deductible to a $1000 deductible, and in some cases this simple move can reduce rates up to 25%. Deductible can have a dramatic impact on your premium, so ask your company rep to quote you the difference.

Don’t insure for your home’s purchase price.
Remember, you don’t have to re-buy the land your home is on if you have to rebuild. If you’ve asked for coverage which includes the land cost as well as the structure cost, you could be paying far more than you need to pay to protect your home.

Retired? Seek a discount.
If you’re over 55 and you’re retired, your insurance company may be willing to drop your rate by as much as 10%. Retired folks are home more often. This can help reduce burglaries and provide an early warning system for fires.

Ask for a loyalty discount.
If you’ve been with your insurance company for at least three years, call them up and bring this to their attention. Let them know you’re considering shopping for a new policy, and you’re curious if they can extend you a discount for being a loyal customer. Savings can range from five to ten percent.

Adjust your coverage for possessions.
You may be insuring for more than you own. Certain high-end computers and other luxury goods may depreciate over time. If the limits on your policy far exceed the value of your possessions, make changes to your policy. The difference can add up. (Do this every year.)

Factoring in insurance costs is an important part of determining how much home you can afford. For more information on how different types of homes can have different insurance costs, talk to me today: 317-223-8015

Attention investors: New rules for deducting home improvements

Investment property owners and landlords know that tax deductions are a crucial component of making sure they maximize their returns. In January of 2014 the IRS in the U.S. implemented a somewhat complex distinction as to what constitutes a repair versus improvement.

Why does it matter? Well, repairs can be deducted in a single year. So if you have a $1,000 qualifying repair, you can deduct it at one time. If it’s an improvement, however, the $1,000 worth of work may need to be depreciated over several years. (In some cases, more than 27 years!)

One useful test for understanding if a deduction can be taken in a single year is whether or not it falls outside of the “Betterment, Adaptation, or Restoration” assessment. If the work falls under these categories, they’ll need to be depreciated, not deducted in a lump sum.

There are some subtle considerations for each case. For a detailed look at what constitutes a betterment, adaptation, or restoration, take a look at this handy article:

Repairs vs. Improvements: Complicated New IRS Rules
http://www.nolo.com/legal-encyclopedia/repairs-vs-improvements-how-tax-deductions-differ-landlords.html

Granted, this blog post shouldn’t be taken in lieu of the advice of a trained tax professional, but I hope you find it helpful as it pertains to your investments.

Looking for a new investment property? I can be of great assistance when it comes to identifying overlooked opportunities in the market. Get in touch today and let’s discuss what might fit your criteria:

Invest in Your Dream

Which do you think is more dangerous? A lack of knowledge, or mistaken knowledge?

Daniel J. Boorstin, the historian, professor, writer, and former U.S. Librarian of Congress once wrote, “The greatest obstacle to discovering the shape of the earth, the continents, and the oceans was not ignorance but the illusion of knowledge.”

Some of the world’s most important revelations have depended on the exploration and adoption of a more complex understanding of our universe. A round planet? The sun at the center of our galaxy? Heresy, once upon a time. But science eventually told the true story.

A lack of knowledge leaves the search open to us all. When we admit what we don’t know, we can at least seek answers. But what about when we think we know? What happens when we are certain in our misunderstanding?

Many people I talk to believe they can’t afford to buy a home, that now is the wrong time to sell, or they won’t be able to secure a mortgage. Many of these beliefs are assumptions based on past experiences, generalized market information which doesn’t look at trends in specific neighborhoods, and media headlines about tight lending conditions.

Unfortunately, many people are held back from their dream of homeownership because they haven’t investigated the possibility for themselves recently. If you’ve put buying or selling out of your mind, I urge you to contact me at any of the methods below to explore your options. Much has changed recently, and I’d be happy to investigate the facts of the market as they pertain to your situation. At the very least, I can help you plan for your future.

A Thanksgiving Post

With Thanksgiving nearly here, I’m reminded of the tradition many families share in which each member around the table expresses something they’re deeply thankful for in their lives. (Truth be told, it’s probably one we should practice every day.)

While I won’t be gathering with you for your feast this year, I would like to share with you my gratitude for your support.

The scholar W.T. Purkiser once said, “It’s not what we say about our blessings, but how we use them, that is the true measure of our thanksgiving.”

It is all about our service to others. I am grateful for the trust you place in me, and hope I am able to serve you and your family for years to come. May your Thanksgiving Holiday be a special one.

Looking to Sell Your Rental?

While you may be perfectly happy with your investment property, a lot of landlords are looking to get out now. Timing is just about perfect. Here’s why:

1. The housing recovery is real. If you thought about selling in the past, but faces the prospect of depressed prices and a surplus of homes on the market, all of that has changed dramatically.

2. Inventory in your property’s neighborhood is low. What used to be a buyer’s market has shifted considerably towards a seller’s market.

3. Mortgage rates remain favorable for buyers, so we’re seeing a lot of first-time buyers enter the market. Many are interested in a property just like yours.

4. Though rental rates have risen, it’s actually driving more and more people to buy.

5. Now is a good time to think about your future plans for the property and what you might like to do with the proceeds from the sale. If there are personal expenses ahead or you’d like to enjoy some of the fruits of your sound investment, the market is ready.

I have a network of associates who would be very interested to hear your property is about to be listed, so if you think it makes sense for us to have a conversation about selling, please get in touch at your earliest convenience.

Ready to downsize?

Thought I might float an idea by you regarding any plans you may have for your future home. Are you like some of my clients? They have recently looked into downsizing now that their kids are out of the house, or have considered investing in second homes. One of the more popular options has been condos and town homes, especially in walkable, urban-like areas such as the Carmel Art District or even in booming Noblesville.

I don’t know if it’s something you’ve considered, but there are a number of benefits to condo and loft living. It’s a great way to take the majority of home maintenance issues off your back while maintaining the equity-building benefits of owning property.

Additionally, the lofts and condos selling these days are gorgeous compared to the “apartment style” condos of years ago. We’re seeing a lot of refurbished classic industrial buildings, amazing views, and quality amenities in these newer projects.

The draw for several of the people I’ve consulted with centers on having convenient access to shops, restaurants, museums, theaters, farmers’ markets, and other car-free destinations. Some have even bought lofts in other cities for the express purpose of renting out their property to vacationers when they’re not using it.

If you ever have any interest in pursuing something like this, or even would like to take a look at what modern loft living looks like these days, I’d be glad to give you a tour of the local market, or even connect you with someone in a city you’ve been considering.