Hand drawing of an interior design project of a modern kitchen

9 Kitchen Design Mistakes to Avoid

Hand drawing of an interior design project of a modern kitchen

No matter how amazing and comfortable the rest of your home may be, there’s something about the kitchen that has everyone congregating to it. No doubt, your kitchen is the hardest working space your home, and should be designed to help make it as efficient as possible. And considering how much of an effect the kitchen has on the overall value of your property, you’d be well advised to make sure its design and style are carefully considered.

After flipping through countless home interior magazines and navigating through Houzz and Pinterest, you’ve probably got a solid idea of what you want your new kitchen to look like. But before you start the process, you’ve got to have a detailed plan in place, which includes things that need to be done, as well as things that you absolutely must avoid.

Here are a few kitchen design mistakes to steer clear of.

1. Not Planning For Adequate Storage Space

Unless you plan on leaving all your pots, pans, dishes and glassware on the counter (which you shouldn’t), you’re going to need to seriously think about adding enough storage to keep all of your kitchen belongings out of sight. And don’t forget about your dry foods and knickknacks that will also need to have a home. Whether your storage takes the form of extras drawers, pantries, or cabinets, you need to be certain that it is adequate enough to tuck everything neatly without having to cram everything into a tight space.

2. Not Including Enough Counter Space

The amount of space that you’ve got on your countertops is equally as important as your storage space. After all, it’s where you’ll be prepping your meals and housing small appliances like your blender, toaster, and coffee machine. And don’ forget about any decorative elements that you may want to have out on your counter to boost the style factor of the room. Without adequate space on your countertops, you’ll find your kitchen will become cluttered really quickly and easily.

3. Skimping on Lighting

If you want to clearly see what you’re doing as you’re preparing dinner, you’re going to need excellent lighting in the kitchen. But many homeowners skimp on lighting in this space for some reason, and often leave it to one solitary central light fixture to provide the lighting needed. Instead, the lighting in your kitchen should be varied, and include both task lighting and fixtures meant specifically for creating ambience.

Consider illuminating the overall space with pot lights, and install pendant lights over your kitchen island. You may also want to install undercabinet lighting to illuminate your counter as you handle food, and hang a chandelier over the dinner table. Layering your lighting in this fashion can provide with both the right amount of lighting needed to whip up your famous dish, while giving you the flexibility to create a specific atmosphere in the space.

4. Lacking Proper Ventilation

All those fumes from your boiled eggs or grilled salmon have to go somewhere, or else you’ll be left with unpleasant smells that will linger for hours. Not only that, but if you have a gas stove, these fumes can go from unpleasant to downright dangerous. That’s where proper ventilation comes into play, which is a critical component to consider in the planning stages of a kitchen design. Not only will an adequate ventilation system help keep the air in your kitchen fresh, it’ll also help to lengthen the lifespan of your appliances. 

5. Forgetting About the ‘Kitchen Triangle’

It would be pretty awkward and annoying to have to dodge obstacles to bring food items from your fridge to your stovetop. That’s why the kitchen triangle should always be kept in check during a kitchen design. This layout basically links the three most used areas of the kitchen: the stove, fridge, and sink.

Out of all these components, the sink, in particular, is most often used, and should have direct access to both the fridge and stove. Tight walkways, cabinet doors that swing open the wrong way, and improperly situated islands can mess this system up big time. Straying from the kitchen triangle too much can make the room must less efficient.

6. Misjudging the Island

Having an island in the kitchen can offer you additional counter space and an added spot to eat and hang out. But your kitchen’s size and layout will dictate the size and location of an island, as well as whether or not one can even effectively exist. The kitchen is a working space, so anything that gets in the way of functional flow will just cause problems.

If the island is too big, or is not located in an ideal spot, you’ll cut off proper flow in and around the space. Ideally, there should be between 42 and 48 inches of open area surrounding kitchen islands. For it to be of any use, the island should be at least three by five feet in dimension, and your kitchen should be a minimum of 13 feet wide.

7. Going Too Trendy

Unless you’re planning on revamping your kitchen every few years, you’d be better off sticking to a design that’s not overly trendy. While you still want to be modern and innovative, you also don’t want to be so quirky that the appeal of your kitchen will wear off you in the near future.

Rose Quartz and Serenity might be Pantone’s choice of colors of the year, but how long these pastel hues stay on trend in the next few years is up for debate. No one says you can’t be bold in your color choices, but just be sure to use them in non-permanent ways, such as with your towels or decorative accessories.

And when it comes to kitchen design, carefully consider the styles you choose for your trim, cabinet materials, finishes, countertops, and flooring. You might think you’re certain that the latest out-there trends will tickle your fancy for the long-term, but you never know when your tastes will change, or if you ever plan on selling your home in the near future to buyers that may not necessarily have the same tastes.

8. Forgetting About the Trash

Your kitchen design can be sleek and impressive, but the look of this space can easily be thrown off with the presence of a trash can. Nothing is more off-putting than the sight of garbage, so be sure that you consider a spot where you garbage bin can be tucked away in a spot that’s easy to access.

Not only is the spot for a trash can up for consideration, so is a bin for your recyclables. One modern way that interior designers and homeowners are tackling this issue is by installing a dual cabinet pull-out that features one bin for the trash, and another for the recyclables. This offers easier access, rather than having to reach under the cabinet and hoping that your toss made the bin. 

9. Not Including Enough Electrical Outlets

Think about all the little appliances that you’ll be using in the kitchen at various stations. From your toaster, to the cake mixer, to the blender, all these items need an outlet to be plugged into. And what about your smartphone and tablet? Odds are the kitchen counter will be the place to recharge these gadgets. For that reason, make sure you’ve installed enough outlets to accommodate all the things that will need to be plugged in.

Spending the time considering all these factors in the planning stages can help save you plenty of hassles after the fact. Make sure you’ve considered all the components that go into making a kitchen great, and avoid all these mistakes that can wreak havoc on your kitchen design.

7 Qualities of an Excellent Neighborhood

Location, location, location. The phrase may have become somewhat of a cliché in the world of real estate, but it still remains the most important factor in determining the true value of a property. When you’re in the market to buy, you’re not just purchasing the physical home, but you’re also buying into the surrounding neighborhood as well.

While everyone’s got their own specific tastes and needs when it comes to the perfect neighborhood, there are certain traits that make a community an exceptional one.

Pride in Ownership

A neighborhood isn’t truly great unless there’s clear pride of ownership among all residents. How well every property is taken care of speaks volumes about what area residents think about their neighborhood and how proud they are to call it home.

If lawns are well manicured and landscaped, windows are clean, debris is cleared, and the overall street is in pristine condition, residents obviously are doing their part to keep the value of the area high.

Excellent Schools

Whether or not you have school-aged children, you still want to find out how well the local schools rank. Of course, parents obviously want their children to have access to the best schools, and many of them actually relocate specifically to be closer to these particular educational institutes.

But not only do great schools benefit parents and children, they also make the surrounding properties within the neighborhood more valuable. Buying into a neighborhood like this increases the odds that your property’s value will not only stay strong, but appreciate at a healthy rate over time.

Low Crime Rate

Turn on the news, and you’ll likely hear stories of violence and unrest in the same areas across the country. Such a scenario not only brings a feeling of insecurity and unrest among residents, it also pulls property values down.

On the other hand, a neighborhood that boasts a low crime rate allows residents to feel much more comfortable and secure. Such a scenario lends itself to higher property values, which can help you grow your home equity much faster.

Accessible Public Transportation

Having the option to take public transportation over commuting via a motor vehicle is an excellent bonus for any neighborhood. Studies have shown that the addition of a public transportation portal in a neighborhood tends to have a positive effect on surrounding property values. If you’d prefer to leave the car at home when commuting to a busy downtown core, you’ve got that option if your home is positioned close to public transportation.

High Walkability Score

Being close to restaurants, shops, markets, and other amenities is a real plus for any neighborhood. The ability to take a short walk to any of these conveniences significantly boosts the neighborhood’s walkability score, which tends to be factored in when valuing homes in an area.

Close Proximity to Medical Care

While having nearby medical facilities is a big plus for residents of any age, it’s particularly important and attractive for seniors and families with young kids. Knowing that you’ll be able to reach a doctor or hospital quickly is not only a bonus, it’s also a must-have on the lists of many homebuyers.

Green Space

There’s something to be said about being surrounded by greenery. Rather than having to drive hours out of the city in order to escape the concrete jungle, having a little bit of green space nearby can dramatically improve both the esthetics and the value of a particular neighborhood. Green space is easy on the eye, promotes a sense of serenity, and is healthier for the air we breathe.

The Bottom Line

When you’re out on a house hunting trek, be sure to have a list of neighborhood traits on your list. Don’t just get fixated on a home – make sure you consider the surrounding neighborhood that it’s located in. Not only do you want to enjoy what the area has to offer outside of your home, you also want to make sure that the property value remains intact – and preferably appreciates – over time.

Simple Ways to Save Money and Energy at Home

It costs a lot of money to maintain a home, but you might be spending more than is necessary. Your utility bills can be lowered significantly by reducing the amount of energy used in your home, and doing so may be much simpler than you believe. Small adjustments here and there can add up to big savings.

Here are some easy ways you can save energy in your home that are good for the environment, and your wallet.

Replace incandescent lights

Conventional incandescent lightbulbs only convert about 10% of the energy used into light; the rest is lost in heat. Swapping these lights with more innovative LEDs can significantly cut back on energy that’s not being used for lighting purposes. Not only do LEDs use 75% less energy than incandescent bulbs, they also last about 10 times longer.

Skip the dishwasher

The amount of energy dishwashers use to heat the water and dry the dishes is significant. If you can stand it, consider washing the dishes by hand. At the very least, switch off the automatic air-dry after the final rinse and open the door open slightly to help the dishes dry faster.

Turn off electronics when not in use

All of your home’s TVs, computers, and other electronics are wasting energy when they’re left on and not being used. Plug your devices into a smart power strip that uses a lot less energy when they’re in standby mode.

Turn the temperature of your water heater down.

If you’d prefer to keep your current water heater, consider turning its temperature down to about 120°F. In addition, turn it down even lower when you’re away for a few days

Maintain your HVAC system

Your heating and air conditioning systems should be maintained at least once a year to make sure they’re working optimally and not using up more energy than necessary to operate. About 50% of the energy used in a home comes directly from these HVAC systems, so the more efficiently they function, the less energy will be wasted.

Insulate your windows and doors

Windows and doors that allow air leakage account for as much as one-third of energy loss in a home. Seal all these leaks with some caulking, and weatherstrip your windows and doors to prevent even further air loss.

Use less water and heat with your laundry

Little changes that are made when doing the laundry can save a great deal of energy. Don’t do the laundry until you’ve got a full load, and wash each load in cold water to cut back on energy used to heat the water. Once the laundry is done, hang the clothes up to air dry rather than using the dryer.

Easy Money Saving Tips That Will Help Reduce Your Monthly Expenses

How we spend our money has changed a great deal over the past few years. Whether you’ve saved more or depleted your savings, we all need some financial inspiration to help us save where we can. Check out these tips, and you’ll be amazed at just how much money you can save with very little effort.


Put a plan in place to get rid of credit card debt that you’ve accumulated over the years. You might not have a magical solution available to wipe this debt away, but that’s okay. You can achieve the same thing by transferring your debt to a card with 0% interest for a fixed period (six months to nearly two years). This will allow for you to pay off a set amount each month while avoiding paying for interest.


You should always pay yourself first, as it’s a great step towards your financial freedom. Use the 50/30/20 budgeting method that can help you manage your money more effectively. This means that 50% of your after-tax pay goes towards your needs (food, bills, gas, etc.), 30% goes towards your wants (eating out, clothing, etc.), and 20% goes towards your future (savings, emergencies, paying off debt). Unfortunately, this rule won’t work for everyone due to individual circumstances, such as living in an area with a high cost of living. You can adjust these percentages as needed so it fits your individual situation.


Recent surveys shows that roughly 32% of Americans run out of funds before payday. This includes those with a higher income (over $100K) and not only those living paycheck to paycheck. Try limiting situations that trigger you to spend more, stick to a budget (50/30/20), or switch to cash and leave your cards at home. Follow these suggestions and always ask yourself if you really need it?


Using an incognito window when shopping online will help you save money by automatically deleting browsing history when the window is closed. This will help you avoid dynamic pricing, which is when retailers alter their pricing based on your browsing and purchasing history. Yes, this really happens! Giving online retailers less to track will also limit the number of promotional emails and ads you see on a daily, which will reduce the temptation to spend.


Every supermarket has its own brand of products, and these are always a cheaper alternative to name brands that are sold at a higher price. Switching from name branded products to own brands is an easy way to save money on your next grocery bill. In most cases you can barely tell the difference when it comes to the taste and quality of these products. It’s easy to always reach for that branded label you’ve always enjoyed, but making the switch is worth a try. This might not be significant if you’re a serious couponer as coupons are geared towards name brands.


If we’ve learned anything over the past few years it’s that having rainy day funds is more important than it’s ever been. It’s possible that yours might be depleted or maybe you never had one to begin with. It’s never too late to start saving, so put some money aside and start that rainy day fund. As a rule of thumb, it’s a good idea to have three months of income set aside for emergencies, and six months if you have a mortgage.

Creating A Sustainable Home Garden

It’s nearly impossible not to be bombarded with news and information about how much safer and healthier organic food is for our bodies. Although, we also know how much more expensive organic produce can be.


Contrary to what some may believe, growing a home garden doesn’t require extensive farming experience or the latest tools of the trade. It’s actually a lot simpler than that, and can help make your home a more sustainable one for you, your family, and even the environment.


First of all, let’s go over the benefits of having a home garden:

Quick access to fruits and veggies – Instead of having to run to the grocery store every time you run out of salad or fresh basil, you can just stroll on over to your backyard to fetch some. Save yourself time and gasoline by foregoing the daily trip to the supermarket and visit your home garden instead.

Gain control over the food you eat – Even when food products are labeled “organic,” not knowing exactly who’s growing the food and how they’re handling it can be bit unsettling. Instead, by growing your own fruits, vegetables, and herbs, you gain control over exactly what chemicals are being used, or avoided altogether. That way, you truly know just what you’re putting in your mouth.

Reduce your carbon footprint on the environment – Having a home garden allows you to make a positive environmental impact. You can start a compost pile where you can recycle certain yard and kitchen waste products to produce a nutrient-rich additive for the soil in your garden. Not only does this create a natural fertilizer for your plants, it also minimizes the waste that you produce. And if you decide to avoid the use of chemicals, you can even reduce pollution and groundwater contamination.

Enjoyment and satisfaction – For many homeowners, watching their gardens go from seeds to fruit- and vegetable-bearing plants can be a real source of accomplishment and enjoyment. Seeing your hard work come to fruition can be really rewarding.


Follow these tips to ensure you garden grows healthy, abundant plants, and trees to feed your family, and maybe even give you enough leftovers for the neighbors!

Test the soil – One of the first things you should do is make sure that the soil you plan on planting your seeds in is fertile enough to produce healthy plants. It’s pretty easy to do this – all you need is a cheap soil test kit that you can find at your local nursery.

By doing so, you’ll be able to identify whether or not the soil has too high of an alkaline or acid content. Once you’re armed with this info, you can add fertilizer and compost accordingly. While many plants will do well with balanced pH levels, others might prefer soil that’s a little more on the acidic side, and would therefore benefit more from plant-based fertilizers. Other plants do better with manure – it all depends on what you’re planting.

Find out which plants are ideal companions – Not every plant necessarily does well when placed beside specific plants. Find out which types of plants do well when they’re planted side by side. For instance, tomatoes and basil plants do well when planted beside each other; the basil boost the flavor of the tomatoes, and this combination also repels mosquitos. On the flip side, onions and asparagus aren’t the best of companions, and should be planted away from each other.

Make your own compost – Not only is this easy, it’ll also cut down on your household waste. A bunch of things can be added to your compost, such as leaf clippings, food scraps, and other organic items. Keep a compost both indoors and outdoors to make it easy and convenient to continue adding to it.

Add flowers to the vegetable garden – Even though your goal is to grow vegetables and fruit, consider adding some flowers to the garden. Not only will they enhance the beauty of the garden, but they’ll also attract the good bugs that eat plant-destroying aphids, and encourage cross-pollinating.

Add mulch – Adding mulch to the garden will help keep the weeds at bay, help the soil retain moisture, and protect the roots of the plants.

Grow fruit trees that fit your space – Depending on how much space you have to work with, you’ll need to figure out which fruits trees will be suitable in the space you have. A full-sized fruit tree will need an area that’s approximately 25×25 feet big. If you live in an urban area where space is limited, consider dwarf fruit trees; these little trees can thrive in as little as 3×3 feet of space (though they prefer 4×4 feet).

You may also choose to grow semi-dwarf fruit trees against walls to save some space. Dwarf fruit trees bear fruit sooner, so you can start enjoying your peaches or apples with less waiting time. Just be aware that the majority of fruit trees need two of the same type of fruit to cross-pollinate and produce fruit.

Don’t forget to water! – Depending on how much precipitation you get and what you’ve got growing, your garden will need to be watered at least 2 or 3 times per week. Do your homework on the plants you’re growing so you know exactly how much water they require.

As a general rule of thumb, it’s ideal to water either first thing in the morning, or later on in the evening, as watering during the afternoon when it’s particularly sunny and hot can actually burn the plants.

The freshest, safest, tastiest, and most economical fruits and vegetables that you’ll ever eat can easily be grown in your own backyard. Within a few short weeks, you can be bringing your own produce to the dinner table!

8 Interior Design Trends To Look Out For In 2022

The current interior design trends are wide-ranging and diverse. There are new colors, textures, and materials, but the most important thing is that there are new moods. The way we desire to spend our lives has changed gradually over the past couple of years. How we want to spend time in our homes has altered, as has the purpose of our homes, and this has influenced every decor decision we make.


Designers are exhibiting how a more casual seating style may combine comfort and everyday usefulness while yet maintaining a high level of refinement and maximum style-desirability. With this aesthetic, it’s the Italian designers that are leading the way.


After a long day of using your smartphone and computer, it can feel amazing to come home and take a technology break. More and more, homeowners are creating specific screen-free rooms—perhaps a library, craft room, or listening room—where you can escape from technology for a while.


Concrete comes into play in today’s bathroom ideas, which are all about adding personality while maintaining a monastic sense of spa-like tranquillity. It’s the ideal material for this room because of the vibrant colors it now offers, as well as the texture and depth it brings.


What if you could feel like you were sleeping in a luxury hotel bed every night? The bedding and mattress are an important part of that experience, but so is the aesthetic and comfort of an upholstered headboard.


Natural colors have become increasingly popular, especially deep greens. It’s a great way to bring some of nature’s colors indoors, whether as an accent wall, in blankets and pillows, or for furniture.


If you want a sleek, contemporary kitchen, black stainless steel is even more of a statement than traditional stainless steel.


While solid upholstery will never go out of style, patterns have become trendy of late. It’s an easy way to make a bold, eye-catching statement in your living space.


Red clay adds a surprising variation to the more usually observed white pottery, thanks to its innate warmth. Often, red or ‘brown’ ceramics are linked with coarser pottery, but this new wave of earthy vases and pieces has a refinement to them, as well as an entirely current artistic edge, that makes them avant-garde.

Be Wary of Timeshare Resale Scams to Avoid Getting Ripped Off

There’s a certain appeal of having guaranteed access to a vacation property in a spot that you enjoy visiting frequently on your holidays, which is precisely what timeshares offer. Simply pick up and go without having to jump through hoops to make sure the place is available when you feel like ditching the concrete jungle in favor of something more serene for a little while.

And even when it comes time to sell, there are typically always a pool of buyers who are willing to pay for these conveniences.

But not all resale timeshare sales transactions are good deals. In fact, many of them are downright scams.

While there are plenty of honest sellers who are trying to unload their timeshares to willing buyers, there are also plenty of scammers out there waiting to rip off unsuspecting people.

In fact, this practice is so rampant that the Federal Trade Commission has actually had to step in and cease hundreds of deceitful resale timeshare scams that have been responsible for stealing millions of dollars. When timeshare owners are anxious to get rid of their vacations properties quickly for whatever reason, scammers are lurking in the shadows waiting to pounce.

Before selling or purchasing a timeshare, it’s critical that you do some research first to find out exactly how they work, and how to decipher between what’s a legitimate deal and what isn’t. Scams in the timeshare resale realm are varied and can take on many faces, so it’s important to be wary of them to avoid getting caught in the current.

“I’ve Got Cash Buyers Ready to Purchase”

Lots of timeshare sellers have heard this line. Scammers offer the promise of having a buyer ready to purchase the timeshare, or promise that they can definitely sell it quickly. All sellers need to do, they’re told, is pay an up-front amount to cover expenses like maintenance fees, closing costs, taxes, and so on. Once that money’s been wired over, sellers never hear a peep from the tricksters again – or their money.

Without a paper trail or any contract signed, there’s little recourse for sellers. All they’re left with is a loss of hundreds or even thousands of dollars.

“Been Scammed? We Can Help Recover Your Stolen Money”

Scammers are smart, and they often come up with new and more savvy ways to swindle a buck out of unsuspecting victims. Changing the game up a little helps avoid a trail left behind, so they can continue fattening their bank accounts with little chance of getting caught.

In the case of the first type of scam, many thieves continue on with the act by contacting the victims and promising to help get the stolen funds back. But of course, this service comes with a fee. And once the victim is convinced of the legitimacy of this service, more money is wired to the con artists, after which the initial funds are never recovered.

“We Help Connect Buyers in Mexico With Sellers in the US”

It seems there’s nothing a crook won’t do to get their hands on illegitimate funds. A scam that’s recently become pretty popular involves scammers claiming to be the go-between for buyers in Latin America who want to get a visa by purchasing property in the US. By putting their name on title – so the scam goes – these agents acting on behalf of the buyers claim to help them obtain the green card they’ve been longing for. All that needs to happen to get the ball rolling in this purchase is for the seller to send over a transaction fee.

The story ends like the others . . . with the sellers left with a lot less in their pockets.

Many Scammers Are Engaging in Identity Theft to Appear Legit

While there are a lot of people out there who are easily fooled, fraudsters don’t rely on their naiveté to make sure they get away with their nefarious plans. As such, many of them go so far as to steal the identity of trustworthy and reputable names in order to appear legitimate in the eyes of their prey.

Many timeshare scammers hide behind the names of established companies or even government officials in order to extort money from sellers. They even have fake websites, professional-sounding titles, and phony addresses to keep up the facade. Many are putting themselves out there as real estate licensees and use an actual broker’s name and license number in order to make it appear as if the sales transaction is real.

What Can You Do To Protect Yourself?

It can be pretty scary to think about the lengths that scammers will go to in order to rip off timeshare sellers, especially when identity theft is involved. Being vigilant is inevitably the best thing in order to protect yourself. It’s better to be highly skeptical with a legitimate service than be gullible with a fraudulent one.

First and foremost, be very suspicious of people who ask for money up front. If the deal is authentic, any fees owed will usually be payable after the transaction is done. And once the fees are due, money should NEVER be wired, nor should they be paid in cash. Instead, funds should only be transferred through a legitimate attorney where a valid and easily-tracked paper trail is left. The former two methods will only make it impossible for law enforcement to recover the lost money.

Speaking of attorneys, you should always have one carefully review any documents involved with sales transactions to make sure you don’t sign anything illicit. Everything should be in writing and reviewed in detail before any sales transaction is finalized.

Even if the reseller seems legitimate with a company name or title that sounds genuine, check into them in more detail to find out if they truly are who they say they are. And if the timeshare being sold is in a resort, call and ask if the resort has a resale program of their own, or if they’ve ever dealt with this particular reseller who’s been in touch with you.

By being cautious and aware of the potential scams floating around out there, you can make sure that the people you’re paying for a resale timeshare are the real deal.

How to Sell Your Home to Family Without Making it Complicated

If you’re planning on selling your home, you might have a relative who might be showing interest in buying it off of you.

That could potentially make things a lot easier for you, considering the fact that there’s no need to market your property, and you can close the deal quickly.

Or, it could turn into an ugly mess that can leave you both on awkward terms with one another.

You want to make sure you get what your home is worth in the current market, but you also don’t want to compromise the relationship with the relative you’re selling to. When it comes to money, anything can happen.

Keep the following tips in mind when selling your house to a relative or close friend so you can keep the relationship intact while getting the most out of the sale.

Be Up Front About Your Relationship

If you or your relative don’t want to land in any hot water with the government, you’d be well-advised to disclose the nature of the relationship between the two of you with your lender. Anyone who fills out an application for mortgage insurance with the Federal Housing Authority will typically be asked to submit an Identity of Interest Certification form if there’s a relationship between the buyer and seller.

It’s not exactly common to have a mortgage denied as a result of family ties, but failure to reveal this information can point to mortgage fraud, which will lead to a denied loan application.

Make Sure Both Sides Are Getting a Good Deal

Your relative might confront you about taking your home off your hands with the intention of getting a hefty discount. And perhaps you might want to help them out in that way.

On the other hand, you might want to get the most out of the deal as possible. But if your relative can get a much better deal on the house down the block, there’s no sense in wheeling and dealing with you.

Either way, dealing with price points on a real estate sale between two parties who are close to each other can lead to major tension.

The best solution to this potentially sticky situation is to have a mutually agreed-upon appraiser come in and evaluate the home for both of you and provide an unbiased opinion of what the home is presently worth under today’s market conditions. That way no one is low-balling anybody, and only the fair price is being worked with.

If you do decide to offer a discount, make sure you’ve got an experienced real estate agent in your corner to help ensure that both parties benefit from the transaction.

Make Sure They Can Afford the House

Even after you and your relative agree on a price for the home, you still have to make sure they’ve got the finances to back up the purchase. It would be pretty awkward if you both go so far as to have a legal contract drafted up to complete the real estate transaction, only to find out shortly after that they can’t get approved for a mortgage.

Never assume that they’ll be able to find a lender who is willing to loan out the funds needed to finance a big purchase like this. Regardless of whether they’re buying off of someone they know, or a complete stranger, they’ll need to get approved for a mortgage.

If you fail to inquire about whether or not your relative is good for the cash before agreeing to sell to them, you could wind up back in square one if they fail to qualify for a loan.

Act as if you’re selling to any other buyer, and not just a relative, and ask for a pre-approval letter from their lender before you start negotiating on a price.

Get a Home Inspection

Even if the person buying from you has spent a ton of time in your home, that doesn’t necessarily mean they know all the nitty gritty about it, including any potential problems that may be lurking.

Maybe you aren’t even aware of some of the possible issues that might be hiding in your home. If any problems pop up after they’ve bought and moved into the home, it can cause some tension in the relationship.

To prevent that from happening, make sure you have your home inspected by a professional home inspector that you both agree to hire. That way any issues will be uncovered and laid out before the buyer. Not only will this help them make a more informed decision, it’ll also keep things kosher between the two of you.

Deal With Special Tax Issues

If you decide to arrange a seller take-back mortgage with the buyer, make sure you dot your “i’s” and cross your “t’s” with the IRS. That’s because they’ll calculate “imputed interest” when seller-backed mortgages for relatives are involved.

Even if no interest was charged on the mortgage, the IRS will consider interest to have been paid for tax reasons. They calculate imputed interest as a means of collecting tax revenues on mortgages that aren’t attached to any interest, or if the interest rate is extremely low.

Simply put, you could be subject to mortgage interest revenue if you carry a no-interest mortgage for your relatives, and they in turn could owe money in the form of capital gains taxes if the house is flipped for a quick profit.

While plans to sell to a family member have worked for many Americans, they’ve also turned out to be relationship killers for others. To make sure you’re part of the former group, make sure you seek the advice of a real estate agent and mortgage broker to protect both you and the buyer to avoid any problems in the near future.

Boost the Value of Your Property With These 10 Simple Home Improvement Tips

Want to boost the overall value of your home? It’s a lot easier than you might imagine. In fact, a few key updates and changes can really hike up your home’s value with minimal work and investment up front. Consider the following tasks to help increase the value of your property and build instant equity.

1. Clean Up the Landscaping

Talk to any real estate agent or home stager and they’ll tell you the same thing: curb appeal speaks volumes. And the first thing home buyers will see when they pull up to your home is its landscaping. A yard full of weeds, overgrown grass, and unkempt bushes aren’t going to cut it in the property value department.

Homeowners tend to focus more on their interiors when trying to make a good impression, whether or not they plan on selling. But what about the exterior? Landscaping is one of the top three investments that boost the highest returns. Even $500 spent in outside yard work can rake in $2,000 in property value when everything is said and done, so it’s worth the upfront cost.

2. Change Your Front Door

After homebuyers have made it past your landscaping, they’ll be greeted by your front door before they step foot across the threshold. But how exactly will they be greeted? Never underestimate the power of a front door when it comes to impressions and property value.

Within the first six seconds of entering a home, people will already have formed an impression. And the front door has a lot to do with it. A door that has peeling paint or rusted hinges can make the overall home look dingy. But the opposite is also true: a new, well-maintained, freshly painted door can make the home seem more inviting, and thereby add a little extra in its value.

3. Create More Space

Back in the day, it was customary to have a bunch of different, smaller rooms. But these days, sophisticated homebuyers – especially within the millennial age group – are looking for more space to use. That doesn’t necessarily mean they need more square footage; instead, what they’re essentially seeking is an open concept and optimal flow and functionality.

If your home is cornered off by a myriad of walls, consider knocking some of them down. Even if they’re load-bearing, you can still remove them and leave a decorative column post to retain support. Right now buyers want a wide open space, and kicking down a couple of walls can be an easy and affordable way to create it, and thereby add more value to your home.

4. Enhance the Lighting

Looking for a cheap and easy way to boost your ROI? Consider updating your home’s lighting, which will noticeably elevate your property’s appeal.

Anything from dimmer switches, to pot lights, to pendant lamps can make a massive difference in the look and feel of a home’s interior. Lighting of various types creates a sense of space and air, and also allows you to create a specific mood.

5. Make Minor Repairs

You’d be surprised at how much of a difference a few minor issues can make in the look and feel of a home. From leaky faucets, to chipped floor tiles, to scuff marks on the walls, these little flaws can make an otherwise nice home look tired. Before you even start thinking about more major upgrades like a kitchen renovation, address the more basic things first.

These little fixes can really go a long way towards property value. Even spending a few hundred bucks fixing small things around the house can increase the value of your property by a few thousand dollars.

6. Upgrade Your Flooring

One of the first things people see when they walk into a home is the flooring. What are they stepping on? Creaking hardwood? Uneven tiles? Dated carpeting? About 94% of professional real estate agents recommend investing a little money on floors when it comes to boosting property value. And you don’t have to blow the budget, either.

Depending on what you install, you can recoup twice as much in value compared to what you spend. If you are planning on installing a completely new floor, consider hardwood. It’s what the majority of homebuyers want, and have even come to expect when they’re on the prowl for a new home.

7. Up the Energy-Efficiency Factor

If the HVAC system in your home is aging terribly, and your utility bills are through the roof, it’s about high time you swap that system for an energy-efficient one. Sure, it might cost you a pretty penny up front, but the amount of money that it can save you in heating and cooling bills will all be worth it.

In fact, you can save as much as 40%. Recent studies have shown that energy savings add 20 times the yearly savings to the overall value of your home. Energy-saving systems and appliances make your home more desirable.

8. Tune Up the Bathroom

Just about every real estate broker says that sprucing up the bathroom is a sure-fire way to add some value to your property. But you need to be careful in how you upgrade it. Spending way too much money on unnecessary finishes and features could land you more in the hole than before you started.

Focus on the kinds of upgrades that the neighborhood calls for. Stick to the upgrades that are economical, easy, and fast. Simple things like adding a glass shower door or replacing an old pedestal sink for a more decorative vanity can go a long way in spiffing up the bathroom, and the overall impression of your home. Do it right, and you can expect a 62% ROI on a bathroom update.

9. Give Your Kitchen a Facelift

In much the same way as a buffed up bathroom can add value to a home, so too can the kitchen. In fact, this central space is probably the most important room in the home, so it only makes sense to give it the attention it deserves. Done properly, you can recoup anywhere from 75% up to as much as 100% on a kitchen remodel.

Just like with a bathroom remodel job, it’s important to keep your expenditures in check when it comes to the kitchen. For example, if the average home value in your neighborhood is $300,000 and you put in $70,000 into your kitchen remodel job, you’re essentially out-pricing your home. If your kitchen doesn’t warrant a total gut job, focus on smaller things that bring the most ROI, such as new countertops, appliances, cabinet doors, light fixtures, and handed and knobs.

10. Paint

Talk about maxing out your return on investment. The number one way to add value to your home with the least amount of money required is though a simple paint job. In fact, you can get back as much as 168% ROI with a simple paint job. Before you even think of listing your home for sale, look around and make a judgment call about whether or not the place could use a fresh coat of paint.

Any peeling, scuff marks or discoloration will warrant a new coat of paint. And if your walls are painted fuchsia pink or lime green, you might want to change it to something more neutral to attract more buyers, and thereby increase the value of your home.

Even if you have no intentions of moving any time in the near future, updating your home in various ways can do wonders to the value of your property. But before you take the hammer to nail, make sure you get some sound advice from a real estate agent or appraiser to find out exactly what features your neighborhood calls for, and the recommended amount that should be spent on each project to maximize the amount you can get back.

The Danger of Over-Leveraging in Real Estate Investments

Leveraging is one of the biggest advantages that real estate investors have at their disposal.

In fact, real estate investing is designed with leveraging in mind. It helps first-time investors get started in real estate investing when there’s little money from the get-go, and is a keen way to multiply initial investment capital to help build long-term wealth.

When leverage works the way it should, it can significantly boost returns, and help you gain equity a lot faster so that you can turn around and continue investing in other properties. It can afford you with appreciation on 100% of the property’s value while others pay it off so you can accumulate wealth much faster.

But over-leveraging is dangerous, and can put your entire financial profile at risk.

While debt can significantly multiply your reward, it can also just as easily multiply your risk.

Owing too much in a specific property compared to what it’s actually worth and the income it’s generating can put you in a negative leverage and equity position.

Negative leverage occurs when the return portion of the investment property is less than the interest rate on the loan.

Of course, it’s expected that real estate values will fluctuate over time. But if you’re teetering on the edge of profit versus loss based on the amount of leverage you’re holding, it could spell disaster. Any significant change in the value of your property at any given time can have a major impact on your investment.

When values drop or when interest rates increase on your debt, your equity will inevitably decline. Depending on how much you owe versus what you own, you could wind up with no equity – or negative equity.

If you invest in commercial real estate, your loan will generally last between 3 to 5 years. That means you haven’t got much time to play with when it comes to paying down the principal portion unless any returns are put back into the loan. With limited equity on the property, lenders will likely refinance the loan at a higher interest rate, making it even more expensive to hold the investment property.

And let’s not forget about all the other expenses that could pop up unexpectedly, including vacancies, repairs, and other factors that could affect your profits.

Over-leveraging to invest in a property that has no immediate returns or exit is quite frankly a bad idea. If the property is not yet rented, or there’s no immediate buyer lined up, over-leveraging is simply like walking the plank, especially if you’ve got no reserves to cover you.

Let’s say you’ve purchased a property for $500,000 with a $25,000 downpayment. If the value of the property declines by 30%, it’s now worth just $350,000, but you’re still stuck paying interest and principal on the full $475,000 loan. And if the amount that you collect in rent drops too, you could be at great risk of defaulting on the property.

If you were using the cash flow from that investment property to pay off your loan on other investment properties, you could wind up with a whole investment portfolio in foreclosure just because of one bad, over-leveraged loan and a lack of reserve capital to back you up.

How Much Leverage Should You Use?

Before you agree to a loan to make a purchase on an investment property, you’ll need to decide what would be a safe area to stay in when it comes to using leverage to boost returns and avoid being upside down on your loan. Here are a few considerations to keep in mind.

Don’t bet on steep rises in appreciation. Lots of real estate investors have lost a ton of capital because they assumed that recent history would repeat itself. Even if property values in the area have been appreciating at a 15% rate over the past few years, for example, it doesn’t mean this trend will continue into the near future. Betting on this is risky business, and can lead you to buy at higher prices and borrow more than what the property may realistically bring in for you.

Put in a hefty downpayment. The higher the down payment you put forth, the less your outstanding principal will be. Sure, you can put as little as 3% down on a real estate loan, but this leveraging will likely run you into trouble if the income that your investment property generates is close to the interest rate you’re paying on your loan. If the market happens to soften at some point, or you experience a higher vacancy rate than you anticipated, you could find it impossible to carry the loan for the property.

Meticulously – and realistically – calculate your cash flow. One of the biggest mistakes you can make when it comes to real estate investing is overestimating your cash flow and being naive about the financial fallbacks that could realistically creep up and affect your returns. Make sure you’ve accounted for every dollar and every possibility when calculating your cash flow. If the margin between rental income and mortgage costs and expenses is slim, you’re putting yourself at risk.

Keep your long-term investment goals clear. Understanding where you’d like to be in 5, 10 or even 20 years will help you decide how much you should leverage to buy a property. Not only should you be looking at the real returns of a property, you should also think about whether you’ll be using those returns to put back in the property to pay down the principal, or turn around and purchase another property.

The Bottom Line

Levering is obviously a necessity when it comes to investing in real estate and reaping the most rewards for the initial dollars invested. In fact, it’s leveraging that allows massive profits from real estate investments to be made.

But using it prudently and avoiding huge loan ratios that your current financial situation cannot support is critical. While leverage is a tool that can help you realize significant returns, it’s got to be used with a good dose of skill and expertise in order for you to avoid losing your shirt.