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6 Tips For Homeowners You Need To Know About
Dated: September 22 2020
Thinking about buying a home? Did you just buy a home? Either way, every homeowner should know about these 6 tips below to maximize the value of their investment and the long term condition of the home.
Keep Receipts for EVERY Home Improvement You Make- In the event you ever sell your home, the money you spend on improvements will increase the cost of your investment (Your Home). This amount can be deducted from any profits you make when you sell your home, increasing your potential tax-free capital gains at the time of the sale (profit that you may not have to pay taxes on). Currently, based on the Taxpayer Relief Act of 1997, if you are single, you will pay no capital gains taxes on the first $250k you make when you sell your home. If you are married, you will pay no capital gains taxes on the first $500k you make when you sell your home. However, you MUST keep receipts/records of all the costs of any improvements you make or you may be stuck paying the taxes. And remember, repairs are not considered improvements when it comes to the IRS- deductions are only for items that improve the home’s value, not items that preserve it (like fixing leaky plumbing or a roof leak). See this great Forbes Article for more details on that…
Budget for Major Repairs- When you buy a home, maintenance and repairs become a part of being a homeowner the day you get the keys. Make sure you have enough in savings to cover any upcoming repairs you may foresee, based on the age of the home, appliances, or info in the home inspection report. The roof may have passed the insurance inspection, but is likely only required to have 3-5 years of life in it to pass. If you need a roof in 3 years, how will you pay for it? Be mindful of the potential big ticket items when setting money aside for repairs so when the time comes to deal with them, it won’t be a crisis. Also, if you can make small repairs yourself, such as replacing a broken toilet or replacing damaged floor tile, you’ll save even more.
Don’t Overspend on Furniture- Before you shell out thousands of dollars for new, high-end furnishings, remember these 2 things- 1) You can rarely take furniture to your next home as it often doesn’t look nearly as nice in another space. Consider how long you may want to live in your current home before buying anything pricey. 2) If you go to resell expensive home furnishings, you will likely only collect pennies on the dollar for it when selling it 2nd hand. It’s unlikely you’ll recoup even 50% of the cost. Try living in your space for a few months before selecting new furniture so you can be sure you’re comfortable with how you envisioned using that space. And remember, buying furniture 2nd hand or from discount stores can save you big bucks in the long run, especially if this is just your first ‘starter home.’
Maximize Your Energy Savings- If you do spend money on something in the beginning, it might be a good idea to invest in an automated thermostat. When you’re away you’ll want to be sure your home isn’t being overly cooled or heated, which in turn can rack up big utility bills. Other things you can do to save on energy/utility costs include changing your air filters every 3 months (put a recurring reminder in your calendar or if you upgrade to a thermostat like the ever-popular Google Nest, it can be set to remind you via its phone app). Additionally, make sure faucets aren’t leaking and that toilets aren’t running. Both of those items can unexpectedly double water bills. (Click Here for a great YouTube Video on fixing a running toilet)
Get More Life Out of Your Roof- A roof can be one of the most costly items to replace in your home and a well-maintained roof can also save you money on insurance costs, energy expenses and more. There are several things you can do to get more life out of your roof. Those items include routinely cleaning the gutters, trimming trees and tall bushes away from the roof, and removing any moss that may be starting to grow. Additionally, if your roof (like many) has a vent system, be sure to keep those clear and fully working. An attic with no ventilation can cause other elements of the home to breakdown sooner from moisture or heat buildup.
Get the Right Insurance- When you first buy a home, you may just go with whatever the most affordable policy is at the time of the closing. Once you’re in your home though, feel free to price shop some more. Call your auto insurance company and see if they offer discounts for multiple policy coverage. Be sure to price shop annually. In Florida, new insurers are entering the market every year. They often want to compete for new business and can offer hefty discounts on the same policy coverages. Also, be sure to review your coverage as you make improvements. New Windows? Replaced the Roof or Garage Door? Call your insurance company once it’s done and see if you’re eligible for any additional discounts. If you add a pool or major improvement, make sure you have the right amount of coverage as well. And don’t forget about life insurance. If something were to happen to you, do you have enough life insurance to cover any existing mortgage for your family?
These tips should be important reminders that even though a home can be a great investment, like any asset, you must manage it properly to be successful in the long run. With proper planning and budgeting, a home can not only provide a safe and joyful place for your family, but can also be a profitable investment for your future.
Andrea is the Managing Partner of The Sandy Hartmann Group. Andrea was born and raised in the Tampa Bay area and is a licensed Realtor with over 15 years of Marketing and Finance experience, holding ....
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