A recent article by Fannie Mae- TheHomestory.com highlights how homebuyers will spend more than ever on repairs. You may be the type that loves the feeling of accomplishing a DIY task or you may have a flair for design and a clear cut vision and outsource your repairs. Whomever you are, everyone loves the idea of saving money, especially on home repairs. Whether you are in the market to purchase a fixer upper for yourself or as a real estate investment, OR you are getting ready to list your home for sale on the MLS, OR you may be in your forever home and just wanting to make it exactly how you like it; there are some things that you should consider that may help your wallet as well as your sanity throughout the process.
There may be several tax benefits to home repairs though they usually are not tax deductable.
“For tax purposes, a home improvement includes any work done that substantially adds to the value of your home, increases its useful life, or adapts it to new uses. These include room additions, new bathrooms, decks, fencing, landscaping, wiring upgrades, walkways, driveway, kitchen upgrades, plumbing upgrades, and new roofs…If you use your home purely as your personal residence, you cannot deduct the cost of home improvements. These costs are nondeductible personal expenses.” –Stephen Fishman, NOLO.com
(Note: It is always important to consult with your tax professional to receive proper tax advice on your home repairs)
What To Consider Beforehand…
Before embarking on any home repair task it is important to do proper research and due diligence. Will you be living in the home while repairs are going on? Do you have family members or pets that may be impacted during the renovation process? The home repair process could be dangerous for pets so it is important to take that into consideration and have a pro-active approach to ensuring that Fido doesn’t get into things that they shouldn’t be into.
How to keep home repairs within your budget and get the most ROI!
To often I have sellers that are listing their homes and get frustrated that after spending so much time, effort, and money on projects around the house; the feedback from buyers touring the property isn’t as stellar as they had hoped that it would be. According to the NAR Profile of Buyers and Sellers in Subregions, homebuyers tend to stay in a home for median of 10 years.
If a person stays within their house for a median of 10 years, at what point do they stop thinking of it as their “home” (and the having the emotional attachment that goes along with that) and start thinking of it as their “property” in which they would like to sell? Of course there may be a difference between home “repairs” and home “renovations” yet many times these are intertwined. Though it would be difficult to forecast home buyer trends and what buyers are thinking about in ten years; we can get a good idea of what is important to buyers as the time gets closer for you to sell your property. The ‘research and due diligence’ I mentioned earlier can ensure that one stays on the right path to maximize their home repairs/renovations and get the most return on their investment when the time does come to sell.
Luckily Remodeling.com comes out each and every year with their Cost vs. Value Report for many cities and regions across the US as well as Charlotte NC. Based upon recent home-buyer trends, this report is jam packed with the ROI that home owners/investors can expect to find on home projects.
How To Find The Right Home Repair Professional…
If you are not wanting to do your own home repairs, Home Advisor is one option in which to research professionals that can do them for you. They also have a guide that can help one approximate the cost of a project.
Be sure to check out current housing stats for Charlotte NC as well as the surrounding areas.
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Thinking about buying soon? Make sure your credit is in order
Jan 16th, 2017
There’s no more important time to work on your credit score than when you’re about to apply for a mortgage. Improving your credit can save you a ton of money—we’re talking about thousands of dollars over the life of the loan. Here are the actions you can take that will have a notable impact on your score.
Pay down your credit card balances Credit utilization is one of the biggest factors in determining your credit score. Your credit utilization should at least be less than 30 percent of your limit, and it’s even better if you can get it below 15 percent. This rule applies to both individual cards and your overall credit limit.
It may even be worthwhile to use some of the cash funds you were planning to use for a down payment to pay off credit card balances.
Do no harm While you certainly want to improve your score if possible, at the very least you’ll want to keep it steady. Avoid opening new lines of credit if you’re applying for a mortgage in the very near future. This will cause a hard inquiry to show up on your credit report.
Take care of negative items It’s good practice to check your credit report for negative items a few times a year—you can get one free report from each of the three major bureaus (Experian, Equifax, and TransUnion) per year.
If you find any negative items (collections, late payments, etc.), write a letter to the original creditor. Explain the circumstances that led to the negative item, and request that it be removed from your report. It can be surprisingly effective, and removing a negative item will improve your credit score in a hurry. You can find some good templates for a request letter online.
Any questions? Please email me email@example.com or contact these lender partners below ( in no particular order.)
Glenn Chavis of Element Funding NMLS: 993247
Michael Caridi of MBV Mortgage NMLS: 1535854
Montressa Barbee of Wells Fargo Mortgage NMLS: 877320