4 Repairs To Make Before You List Your Home

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When you’re getting ready to list your home, it’s of the upmost importance to ensure you are showing it in the best light. Taking time to highlight its strengths and fix up some of its possible weaknesses can make a big difference in how fast it sells. Here are our top five recommended repairs to make before selling your home.

1. REPAINT WALLS

Giving your home a fresh coat of paint is one of the most cost-effective ways to spruce it up, and generally, it can be a do-it-yourself project. Make sure cover any walls with scratches and chips and consider updating any accent walls with a more neutral coat.

2. REPAIR FLOORS

Hardwood floors are a very desirable feature in a home, so you want to ensure they look their best by fixing scratches or dull areas. If your carpet is worn or stained, consider replacing them. And don’t forget the tile in your kitchen or bathrooms. Re-grouting can go a long way in making dingy tile work look brand new!

3. REFRESH THE LANDSCAPING

Show buyers your home is the full package by dressing up the outside as well as the in. Clean walkways and driveways, plant seasonal flowers and plants, trim hedges and trees, install outdoor décor pieces and fill in mulch and gravel.

4. FIX YOUR FIXTURES

Leaky faucet? Rusted drains? Loose drawer handle? Making these small fixes can make a big difference to potential buyers with detailed-orientated minds. Improve your kitchen. An outdated kitchen can be a real eyesore in a home. Updating cabinetry, repairing or replacing countertops, and installing new faucets and sinks may be worth the investment.

IS IT TIME TO UPSIZE YOUR HOME?

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Unfortunately, our homes don’t always grow with us. What may have initially worked fine for a single person, a young couple’s starter home, or a family with a newborn can quickly become too small as families expand and multiple generations live under one roof.

Remodeling and adding to your home is one option for creating more space, but it can be costly, and the size of your property may be prohibitive. That’s when moving to a bigger home becomes the best solution.

WHERE DO YOU NEED MORE SPACE?

The first thought when upsizing your home is to simply consider square footage, bedrooms, and bathrooms. But it’s important to take a more critical approach to how your space will actually be used. If you have younger children (or possibly more on the way), then focusing on bedrooms and bathrooms makes sense. But if your children are closer to heading off to college or starting their own families, it may be better to prioritize group spaces like the kitchen, dining room, living room, and outdoor space—it’ll pay off during the holidays or summer vacations, when everyone is coming to visit for big gatherings.

MOVING OUTWARD

If you need more space, but don’t necessarily want a more expensive home, you can probably get a lot more house for your money if you move a little further from a city center. While the walkability and short commutes of a dense neighborhood or condo are hard to leave beyond, your lifestyle—and preferences for hosting Thanksgiving, barbecues, and birthdays—might mean that a spacious home in the suburbs makes the most sense. It’s your best option for upsizing while avoiding a heftier price tag.

Create An Evacuation Plan For Your Pets

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An evacuation plan is a necessity for every home, especially if you live in an area where fires, earthquakes, hurricanes, flooding, and other disasters are a possibility. Many homeowners create evacuation plans for their homes and practice them with their kids, but far fewer have considered one for their pets. Take these steps to add your pets to your evacuation plan.

Assign pet evacuation to an adult. Everyone should know how to act during an evacuation, and that includes assigning one parent or adult to the pets. This allows the other parent and the children to focus on their part of the evacuation plan, so there’s no confusion during a high-stress moment when time is of the essence.

Keep evacuation maps and pet carriers readily accessible. If you need to evacuate, you should know exactly where every important item is. If you pets require carriers, keep them in a place that you can access easily.

Practice your plan. Include your pets in your home evacuation drills. It’ll help you see how they will respond and make changes to your plan if necessary. Getting your dog out of a window may not be as simple as you think!

Be prepared in case you get separated from your pets. No matter how much you drill your evacuation plan, it’s possible that a dog or cat will run off while you’re focusing on keeping your family safe. A microchip or a GPS-compatible tag can help you find your pets once it’s safe to return to the area.

EASY LANDSCAPING DIY PROJECTS

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Ever get the itch to do a DIY project? Whenever we do, our favorites involve getting outdoors and mixing up our landscaping features. Whether it’s as simple as installing some lighting or a little more time-consuming like re-plotting plants, a fresh look for the lawn always gives your home a fresh look as well. Here are our top five easy landscaping projects!

Create a pathway

To guide you and visitors throughout your yard and link different areas together, install a pathway. You can use materials from a variety of materials, including reclaimed pallet wood, flagstones, gravel, and more to add texture and color.

Add a wall or border

Installing a flagstone, rock, or brick wall around flower beds or trees adds a sleek, clean look to your landscaping and helps separate different sections of your yard.

Install a water feature

Nothing says zen quite like the sound of trickling water as you relax in your backyard. You can start simple with by purchasing and installing a small feature powered by a solar panel or create a larger focal point in your yard by installing a waterfall wall or small pond.

Light your way

An easy way to transform your yard is to strategically use lighting. Place cool-colored lights high in trees to recreate a moonlight feel, use pathway lights to naturally guide the eye, or highlight objects or plants.

Plant upwards

Expand your yard space by drawing the eye to the sky with a trellis fence or screen made of wood or metal. Once you install your trellis, select your climbing plants and vines and get to planting!

Should You Test For Radon in Your Home?

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Imagine something dangerous lurking in your home that you can’t see, smell, touch, or taste. That’s what radon gas is, and it can be hazardous to your health and that of your family. But it’s virtually impossible to detect without the proper tools. 

Breathing in air with radon present might not necessarily cause any symptoms right away, which is yet another reason why a home should be tested for the gas. 

If no one in the house experiences any medical issues, there’s little reason to believe there’s anything wrong. But continued exposure to radon can increase the risk of the development of lung cancer.

In fact, according to the US Environmental Protection Agency (EPA), exposure to radon causes approximately 21,000 cancer deaths every year. That’s why it’s so important for homes to be tested for this dangerous gas.

What is Radon?

Radon is an odorless radioactive gas that can be found in homes all over the country. In fact, it’s estimated that almost 1 out of 15 homes in the US has high radon levels.

Radon stems from the breakdown of soil, rock, and water and can make its way into a home through the ground or through cracks in the foundation and circulate through the air. 

Once radon enters the home, it gets trapped, leaving it to be inhaled by all occupants of the home. While having a home that is well-sealed and insulated is great for energy efficiency and lower utility bills, such efficiency can actually make things worse by not allowing radon to escape.  

How to Test For Radon

The only way to know for sure if there is radon in your home is to have it tested by professionals. Since you can’t see or smell it, there’s no other way of knowing whether or not radon is lurking in your home. 

All floors under the third level (if applicable) of a home should be tested. That’s because radon can rise into the air and make its way as high up as the second level of a home. That said, radon will likely be more concentrated on the lowest level, so that’s typically the first place that should be tested for the gas. 

Testing for radon is rather straightforward and isn’t overly complicated. In fact, many homeowners test themselves using kits that can be purchased at hardware or home improvement stores or ordered online. 

That said, it’s generally recommended that radon is tested by a professional to ensure an accurate reading. 

What Constitutes High Radon Levels?

After the home has been properly and effectively tested, the levels of radon – if detected – should be less than 4 picocuries per liter (pCi/L). If it’s at that level – or higher – steps need to be taken to remove radon from the home and identify the source of the radon making its way into the home.

Even if the levels detected are under this mark, it can still pose a risk. Ideally, there should be no radon detected at all. Since radon levels can change over time, it’s best to have a long-term test conducted to find out what the radon level is over time.

If dangerous radon levels are detected, take action to fix the home by hiring a qualified radon professional.

Buying or Selling? Have the Home Tested For Radon First

If you’re selling your home some time soon, consider having it tested for radon. While it’s not mandatory to do so, it can actually strengthen your listing. 

Being able to show buyers that the home has been tested and is free of radon can be a strong selling point. Even if radon was detected, taking steps to eradicate it can be something to boast about to prospective buyers. 

If you do have the home tested or have any issues with radon resolved, be sure to keep all the associated documentation to have ready to show buyers.

If you’re buying a home, on the other hand, ask the seller if they have any paperwork regarding radon testing. If a test has been done in the past, consider when it was done, as tests conducted far back may no longer be accurate to reflect what may be in the home today. 

Also, make sure to find out who conducted the test, which levels of the home the test was conducted, and if any significant improvements or renovations have been done since the test that could have affected radon levels.

If the home has not been tested, ask to have it tested. Or else, consider having a radon test conducted as part of your home inspection before the deal is sealed. 

The Bottom Line

Whether you’re a seller, buyer, or a homeowner who plans to stick around for the long haul, having the home tested for the presence of radon is important. While there may not be any acute symptoms of radon poisoning that you may notice, the long-term effects of exposure to this gas can be detrimental. 

Should Sellers Bother Staging a Vacant Home?

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There’s a lot to do when it comes to getting a home ready for sale, and staging it is one of them. 

Obviously, a home that’s properly furnished with pieces that are appropriate for the size of all rooms and decorated with tasteful accessories and neutral colors will show a lot better than a home that looks disheveled. 

Buyers are more inclined to put in an offer on a home that they can envision themselves living in and suits their lifestyle, but sellers need to work to help buyers visualize the space as such.

But while it makes sense to stage a home that’s not furnished appropriately or that’s decked out in loud colors, is it necessary to stage a home that’s vacant?

Absolutely. Staging a vacant home is just as important – if not more important – than staging a home that’s already furnished. Here are some reasons why. 

Make Rooms Appear Larger

If your home is lacking in square footage, you’ll want to do what you can to make principal rooms appear larger than what they really are. But rooms that are vacant will actually seem smaller, which is the complete opposite effect of what you want to achieve. 

Further, without adding furniture, buyers may not think that their furniture will fit properly if there’s nothing in the home to show them that the space is large enough to accommodate. Even the slightest doubt about a home can scare buyers away. 

Instead, furnish your vacant home with pieces that will show buyers how a full set of furniture can fit nicely in the space. 

Help Buyers Visualize the Purpose of a Space

The majority of buyers are unable to visualize what a space can look like if it’s not furnished and decorated for them. Not only that, but an empty house seems cold and unwelcoming, which will do little to help buyers develop an emotional connection to it. 

As a seller, you’d be doing yourself a favor by outfitting your vacant home with furniture and accessories that will help show buyers exactly what the home can look like when it’s all decked out. Proper staging can also help make the home seem warmer and more inviting, which can go a long way at helping buyers develop an emotional attachment to the home and entice them to put in an offer. 

Make Online Images More Appealing

Most buyers start their search for a new home on the internet, and they’re usually enticed to book a showing based on the images they see online. A home that is effectively staged will show much better in photos compared to a vacant property. 

Many buyers might not even bother scheduling a visit if they’re not impressed with a listing’s images. The last thing you want to do is lose out on a potential buyer before they even visit your home. And to make sure you get as many eyes on your house, make sure not to leave it vacant.

Draw Attention Away From Flaws and Onto Positive Features

No home is entirely perfect, including brand new properties. There are always flaws to be found, but you don’t necessarily want them to be highlighted. Yet that’s exactly what you’ll be doing if you leave your home empty.

Vacant spaces have a way of magnifying flaws, yet well-furnished rooms tend to do the opposite. Not only that, but staged and furnished rooms can also highlight the positive features in your home, which is exactly what you want to do to impress buyers. Proper home staging can help showcase the characteristics of the home that you want to show off while downplaying imperfections. 

Create a Lifestyle

Home staging isn’t necessarily all about decorating a home, but it’s also about creating a lifestyle that buyers are looking for. They want to find a home that caters to the lifestyle they want. Home stagers know exactly what the buyer demographic is in your area and will cater specifically to them with their furniture and decor choices. 

But vacant houses lack the ability to showcase a specific lifestyle. As already mentioned, buyers need a little help envisioning how a space can look and how they can use it. But if the home is vacant, there’s nothing to interest them or help them visualize how the home can give them the lifestyle they might not even know they want.  

Sell Faster

It’s been shown time and again that homes that are professionally staged sell faster than homes that are not. If selling quickly is on your agenda, then staging it might be something worth trying. 

The longer your home sits on the market waiting for a willing buyer, the more money you’ll be dishing out in carrying costs. Plus, your listing will be at an increased risk of becoming stale, which can eventually lead to the need for a price reduction.

Sell For More Money

Not only can a staged home sell faster, but it can sell for more money too. While it might cost a little bit of money to pay a professional to have your home staged, you can easily recoup all of that money spent – and then some – when you sell at a higher price point. 

The Bottom Line

You’d be doing yourself a disservice by leaving your home vacant when selling. You’ll lose out on the chance to help buyers develop an emotional connection to the home and help them envision what life can be like living there. Most importantly, a vacant home can take longer to sell and may even cause you to leave money on the table. 

By investing a little money and effort up front, you can turn your vacant home into one that will impress buyers and encourage them to put in a good offer sooner rather than later.

Are You Subject to Paying Capital Gains Taxes When You Sell Your Home?

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There are so many perks to homeownership, including certain tax breaks. For instance, if you own a home, you may be eligible to deduct interest expenses on up to $750,000 of mortgage debt, which can save you some cash come tax time.

But there may be certain taxes that you may actually have to dish out when you sell real estate, depending on your particular situation.

They’re called capital gains taxes, and they may be payable when a piece of property changes ownership.

If you turn a profit when you sell your property, you’re said to have realized “capital gains,” which basically refers to the profit made on the sale of your home. For instance, if you bought your home for $500,000 seven years ago and sell it for $750,000 today, you’ll have profited $250,000.

If you sell for more than what you paid for it, you’re obligated to report these gain to the IRS, who will then tax you on those capital gains. Depending on your situation and the status of your home, there may be taxes to be paid on that profit, or “capital gains taxes.”

But as pesky as capital gains may sound, they might not necessarily be applicable to you, as long as you and your property meet specific criteria. But how do you know if you’re subject to these taxes when you sell your home for more than what you paid for it?

Capital Gains Tax Exemptions

Luckily, there are certain situations in which you may be able to get away without having to pay capital gains taxes on any profit you make on the sale of your home.

The first $250,000 is exempt, with exceptions. You don’t have to pay any capital gains taxes on the first $250,000 that you profit from the sale of your home if you’re single, or $500,000 if you’re married. However, you and your home will have to meet the following requirements.

You owned your home for at least two years. If you’re an investor who fixes and flips properties for a profit, you’ll find that you’ll be subject to capital gains taxes on any gains you make.

That’s because the home must have been in your possession for at least two years. So, if you fix and flip the property only a few months after buying it, short-term capital gains taxes will be applicable.

You lived in the home for at least two years. Not only does your name have to have been on title for at least two years, you must have called the home your primary residence for at least two years as well.

You don’t necessarily have to have lived there for two consecutive years, but the place must have been considered your primary home in order to be exempt from paying capital gains taxes. More specifically, you must have lived there for at least two of the past five years.

You haven’t claimed exemption within the past two years. You’re only allowed to take advantage of capital gains tax exemption once every two years. However, you can take advantage of this exemption over and over again without limit, as long as it’s not repeated any more often than every couple of years.

A Word About 1031 Exchanges

If you’re a real estate investor and are concerned about the prospect of having to dish out a lot of money on capital gains taxes on your profits, you might have a way to avoid having to pay capital gains taxes thanks to something called a “1031 exchange.”

As per IRC Section 1031, a 1031 exchange allows investors to sell a property and reinvest the proceeds of the sale to purchase another property. While this is a simplified explanation of what a 1031 exchange is, it’s a great way for investors to hold onto their gains and use them to continue investing in real estate and grow their wealth without having to constantly pay up every time a property is sold at a profit.

Short- Vs Long-Term Capital Gains

If you are required to pay capital gains, you will want to know if you’ll be subject to short- or long-term gains, as this will affect how you’re actually taxed.

Short-term gains apply to homes that are owned for less than one year. In this case, the rate is equivalent to your tax bracket. Long-term gains apply to homes that are owned for at least one year. And while long-term gains are typically taxed lower than short-term gains, the exact amount of taxes you have to pay will depend on your income.

People with higher incomes could pay as much as 15% to 20%, while those with a more limited income might not owe anything at all.

The Bottom Line

No one likes to pay taxes, but if you get familiar with how the IRS taxes home sellers and play your cards right, you may be able to avoid paying capital gains taxes when you sell. Be sure to discuss your particular situation with a tax specialist to find out where you stand as far as capital gains taxes are concerned.

How to Ensure a Vacation Home Purchase is a Good Investment

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If you’ve been thinking about investing in real estate and buying a property to rent out over the long haul, you might want to consider a somewhat unique investment opportunity: vacation rentals.

In fact, renting out vacation properties has become all the rage lately thanks to sites like Airbnb, VRBO, and HomeAway. Travelers have become savvy in their choice of accommodations abroad, choosing places that mimic home rather than defaulting to tiny hotel rooms with very few amenities.

If you invest in the right vacation property, you can realize a full calendar of bookings throughout the year. But it’s important that you play your cards right in order to make sure that the property you invest in will make it easy for you to turn a profit.

Here are some things you should consider before investing in a vacation home.

Identify a Market For Vacation Rentals

As with any other type of real estate investment, choosing the right location of your vacation home is crucial. Find out what the market is like in the area you’re looking at to see how in-demand it is for travelers and those looking for accommodations.

Make sure the property is located in a place that vacationers would want to spend their holidays. The right location can make marketing and renting your vacation property so much easier. The more desirable it is, the more frequent bookings you can enjoy.

There are so many potential scenarios you may want to think about when choosing a location. A quiet waterfront cottage, a condo close to entertainment and shopping, a beach property, or a townhouse in a ski resort are all great examples of the types of vacation homes you may want to consider that vacationers would flock to, as long as there’s demand.

Determine How Much You Can Rent For

There are obvious costs associated with buying and operating a piece of property. And when it comes to vacation rentals, you want to make sure that the rent you charge can at least cover all associated expenses. Ideally, you’ll want to turn a profit, which is the whole idea behind buying and renting out a vacation home.

But in order to make sure you’re profitable, you’ll want to know how much you can realistically rent the place out for. You can always scope out vacation rental websites to find out what similar properties in the area are going for.

Or, you might get a more accurate idea by having a real estate agent conduct a thorough analysis of the area and what vacation rentals fetch in short-term rent.

Get Yourself Enough Insurance Coverage

Homeowners insurance is a must for anyone who owns real estate. But with vacation properties that you’ll be renting out to complete strangers on a regular basis, you might want to get yourself more comprehensive coverage that will protect you.

In addition to buying a policy that covers the cost of completely replacing the property should disaster strike, it’s also important to consider taking out a personal liability policy that will deal directly with the ownership and rental of the property, including all assets inside the unit.

Look into policies that will also protect you while your property is vacant between tenants. And if there are any heightened risks in the area that you’re looking at buying into – such as earthquakes, forest fires, or floods – take out a policy that covers that, too.

Factor in All Costs

It goes without saying that you’ll need to assess the prices of the properties you’re looking at and make sure you can afford them. But the mortgage is only one part of the mathematical equation when it comes to vacation rental investments.

After you’ve determined that you can afford the place and are able to secure a mortgage, you’ll need to take a detailed look at all the costs that will be associated with operating the property. This includes, but is not limited to, the following:

  • Property taxes
  • Maintenance
  • Repairs
  • Utility bills
  • Insurance
  • Cleaning fees (if you hire an outside cleaning company)
  • Property management fees (if applicable)
  • Marketing

Don’t make a purchasing decision without first having figured out what it’s going to cost you to keep the property running. And don’t forget to consider times when your unit is vacant, as you won’t have any rental income coming in to cover your carrying costs.

Make Sure You Have Adequate Cash Reserves

The last thing you want is to be strapped for cash one month because you don’t have a financial cushion to carry you through slower times when your property is not rented out.

As such, it’s wise to have adequate cash reserves before you invest in a vacation property. Besides, your lender will likely require you to have a certain amount of money before approving your mortgage.

The Bottom Line

There are plenty of opportunities to make a great income and build wealth in the realm of vacation properties. And with vacation rental sites like Airbnb and VRBO exploding, now might be a great time to take advantage of such a lucrative opportunity. Just make sure you’ve dotted your i’s and crossed your t’s before you dip your toes into this type of investment.

Should You Buy the Best House in the Neighborhood?

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A gorgeous house in a great neighborhood is definitely something that will catch buyers’ attention. And the best house on the block will certainly stand out from the rest.

But is purchasing the best house in the neighborhood a sound investment?

It’s safe to say that many buyers want a home that’s move-in ready. A home that’s already all decked out in fine finishes and updated with modern materials is something that a good chunk of buyers are looking for.

With nothing to do to upgrade a home, buyers can simply move their belongings in and start enjoying their new home. And who doesn’t love a great house? And more specifically, who wouldn’t want to own the best house on the street?

There may be some situations where it might make sense for you to invest in what’s arguably the best house in the area. Maybe the home has certain unique features that you want that you can’t find in any other home you’ve visited. Or maybe you have no desire nor inclination to update the home yourself.

If your finances can justify the purchase and you’re planning to stick around for the long haul, perhaps it might make sense to snag the place, even if there’s no wiggle room to add value to the place yourself.

But in most other cases, buying the best home in the neighborhood isn’t a sound investment decision. Here are some drawbacks to such an investment.

The Rate of Appreciation Won’t Be as Fast as Other Homes on the Block

One of the great things about owning real estate is the increase in value that you can realize if you hang onto the property for the long haul. While property values may dip from time to time, such fluctuations are temporary. Over time, the value of real estate goes up.

But if you buy a house that’s already improved, there’s little room to make any improvements on your own that will have a decent impact on the value of the property.

Instead, a home that could use a little improvement will give you the opportunity to add value. Compared to the worst house on the block, the rate of increase in the value of the best home will be a lot slower.

Further, you’ll also miss out on the opportunity to take advantage of an increase in value that tends to come from the sale of other homes in the neighborhood. With the highest-valued home on the block, the sale of other homes in the area won’t have as much of a positive effect on boosting your property’s value.

The worst home on the block will have the distinct opportunity to increase in value when they’re surrounded by higher-value homes.

For instance, a home that’s worth $500,000 can increase in value faster if it is surrounded by homes that are worth $700,000. But if your home is the highest-valued property on the street, you won’t be able to benefit from this effect.

The Value of Your Home Could Be Pulled Down By Other Lesser-Valued Homes

While low- to mid-grade homes can take advantage of increased value thanks to nicer surrounding properties, the value of the best home on the street can actually be pulled lower if it’s surrounded by properties that are less expensive.

This is a significant factor that needs to be considered and is typically one of the more important reasons why buyers are encouraged to steer clear of buying the best home on the block.

Future Resale Might Prove Challenging

Since you’re in the buying phase of the real estate game right now, you’re probably not even thinking about selling in the future. But it’s always important for buyers to keep resale in mind when they’re looking to buy. Even if your intentions are to stick around for a long time, the potential to sell at some point in the future are very real.

And if you buy the best home in the neighborhood, you might find it tough to sell if or when the time comes. More expensive homes usually have a smaller pool of buyers compared to mid-range homes, which means it will likely take longer to find the right buyer for the home.

Plus, if your home is surrounded by less-than-attractive homes, people who may be able to afford your home might prefer to be in an area with higher-value properties. And if you’re looking to make a decent profit on the sale of your home, you might find it difficult if the rate of appreciation move’s at turtle speed, as already explained.

The Bottom Line

Finding a beautiful home that has all the bells and whistles might draw you in and entice you to put in an offer, but pay close attention to the neighborhood at large. Compare the subject properties to those around it and assess the health of the neighborhood before you buy.

While it might make sense to snag the house in some cases, in most other situations, it might not be the smartest investment decision. Be sure to discuss your options with your real estate agent.