The Home Building and Remodeling Expo visited Minneapolis over the weekend, providing ample opportunities to win things, ranging from complete kitchen and bathroom remodels to an ATV. There was also ample opportunity to schedule free estimates for home improvements and remodels.
The Dody Kettler Team of Keller Williams Realty put together a flyer with the four “home improvements worth doing,” including estimates and expected cost recuperation according to the 2018 Remodeling Cost vs. Value Report. That information was mostly incomplete and is based on who is buying homes now and not who will be buying homes.
Millennials are looking for different things than their mothers and fathers did when buying their first homes. Some staples like curb appeal and off-street parking are still important, but you’d be surprised what Millennials want in a home. So here are the seven home improvements that will payoff the most given the new market of Millennial buyers.
More than half of all buyers desire well-lit exteriors, but Millennials showed a stronger preference compared to other generations. A well-lit exterior conveys safety and security, and if you think homebuyers won’t drive by your home at night, you’re wrong. Thoroughly informed homebuyers know to visit the neighborhoods where they’re shopping to see what the neighborhood looks and sounds like at night. If you’ll forgive the cliché, the difference can be night and day.
Installing exterior lighting around garden beds and lights operating on motion sensors is a modest expense that will really improve your curb appeal and keep the offers coming. Path lights run $10 a piece, and motion-sensor lights can be had for less than $20.
It should be no surprise that energy efficiency is important to Millennial homebuyers entering the market. They are environmentally conscious and frugal to boot. That’s why you shouldn’t ignore updating your appliances before selling your home.
If you own a small home and require very little electricity, installing a solar array could pay itself off before you even complete the rest of your home renovations. I averaged 312 kilowatt-hours in January at a rate of roughly 15 cents per kilowatt-hour through Xcel Energy. Wholesale Solar has a calculator that can recommend a solar array perfect for your home and estimates how long it will take to payoff. I could install a solar array for just over $1,000. It will pay for itself in just two years, so don’t let anyone tell you installing a solar array is too expensive.
Besides your heating and cooling systems, your hot water heater is the most energy intensive appliance in your home. My furnace and hot water heater were recently replaced and played a big role in influencing my purchase. Any home with a hot water heater or furnace more than three years old were basically knocked off my list immediately.
Your hot water heater is also the cheapest of the “big three” appliances to replace. Units that can heat 30 gallons run less than $400, and 40-gallon units are less than $600.
Replacing that old clothes washer/dryer combination is an absolute must. Your washer and dryer are responsible for 13 percent of your home energy consumption. That’s way more than your refrigerator, which accounts for four percent of your home energy consumption.
Keep in mind that, more than anything, Millennials want a laundry room, and Millennials prefer their laundry to be on the same floor as their bedroom, so if you have a room on your main floor for a stackable washer/dryer and can run some plumbing to it easily, it would behoove you to do so.
The refrigerator/freezer is the cornerstone of the kitchen. As the biggest item in your kitchen, it dictates the look and feel of your cooking environment and tends to turn heads, in either a good or bad way.
Before you decide to replace your refrigerator/freezer, though, use Energy Star’s calculator to determine whether it’s worth it. A new refrigerator isn’t going to sell your house, but if you have other renovations that will take years to complete, or intend to stay in your home for awhile, having an energy efficient refrigerator/freezer could payoff. Replacing a refrigerator/freezer made in the early 1990s with an Energy Star refrigerator/freezer can save you over $150 per year.
New appliances can make your kitchen bigger and give it an updated look that will be appreciated by anyone who cooks. I moved out an old, 40-inch-wide gas range in my kitchen and replaced it with a newer, more efficient 36-inch range that gave me enough room to add an 18-inch dishwasher to a kitchen measuring roughly 100 square feet. So not only am I saving energy, but I made my kitchen bigger, which goes a lot further than new appliances in selling your home. I even scored a newer microwave that matches the oven/range! If new appliances aren’t in your budget, shop Craigslist for local deals.
Curb appeal is still most important when it comes to enticing offers on your home, and nothing improves your curb appeal like a wood deck addition. Composite decking might hold up better against the elements, but wood still looks and feels better, as is indicated by the fact that three of every four new decks built are still constructed with pressure-treated lumber. Much of that has to do with cost.
A two-by-six-inch piece of pressure-treated lumber runs a little more than $1 per linear foot. Composite decking is more than twice that, and plastic decking is three times the price. So if you’re going to build a deck, build it of wood. You won’t mind washing it annually and putting a stain on it every few years because it will look and feel so much better than your neighbors’ cold, composite deck.
The 2018 Remodeling Cost vs. Value Report says you can expect to recuperate almost 83 percent of your costs on a wood deck addition. That cost is estimated at $10,950 on average. A composite deck addition only recuperates 63.6% of an average cost of $17,668.
Again, improving the curb appeal of your home continues to top the list of home renovations that payoff the most. Adding a manufactured stone veneer around the base of your home will have homebuyers salivating before they cross the threshold...or even park the car.
You don’t have to be a millionaire to give your home good masonry anymore. Rock work has exploded in popularity, so there are more people doing it and materials that allow it to be done at a reasonable rate. You can get enough manufactured stone to cover 150 square feet for just over $1,100.
You’d probably be surprised to discover that adding a manufactured stone veneer is estimated to cost just over $8,000 on average. The return on investment is even more shocking -- 97.1 percent and climbing considerably.
As this list indicates, curb appeal is still king when it comes to selling your home, and nothing improves that appeal more than a designer front door constructed of steel. Replacing your front door not only provides the best return on investment but is the cheapest renovation you can make to your home before putting it on the market.
Even if you’re not selling your home, purchasing a new front door is a smart investment. You can dramatically lower your heating and cooling costs by adding a new front door, and why not change the door if you have to change the locks anyways?
The 2018 Remodeling Cost vs. Value Report estimates the cost of replacing your front door at $1,471, which is a bargain considering how much it’ll payoff. You can expect to get 91.3 percent of that cost back in resale value.
This would be number one on the list if the return on investment was just a little bit higher. The beauty of improving the landscaping surrounding your home is that it’s something you can do yourself and, hopefully, enjoy doing.
Planting some trees and bushes and putting in a garden with some nice, stone pavers is cheap, and a 2016 survey conducted by The National Association of Realtors and the National Association of Landscape Professionals found the return on investment to be 105 percent. Again -- curb appeal.
Insulation isn’t typically seen or noticed by homebuyers unless your realtor makes it a point to sell the energy efficiency of your home, but the payoff of proper insulation is better than any other home renovation you can make. It’s also cheap.
Most insulation installations can be done for less than $1,500 -- on par with the replacement of your front door -- but the return on investment was 108 percent in 2017, according to Remodeling Magazine. The best part is, added insulation is a good investment whether you intend to sell your home or not.
So there are the seven home renovations that will payoff the most given the Millennials looking for their first homes. Invest wisely.
If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, What’s Cookin Today, The Easy Organic Gardener, Home Talk
Attending a first-time homebuyer workshop is a great way to prepare yourself for purchasing your first home. You’ll learn how much home you can really afford and how mortgage interest rates are determined, the importance of home inspections, what to look for in a home and how to thoroughly inspect a home during an open house. But an eight-hour, first-time homebuyer workshop isn’t enough time to completely prepare you for the home-buying process. Here are 5 things they don’t tell you at first-time homebuyer workshops.
You’ll probably be looking at homes during the day, so you might not turn on all the lights to make sure they work. You should. When I moved into my house I found almost every light bulb dead, which isn’t a big or expensive problem, but one fixture had a connection that needed cleaning with steel wool and electronic parts cleaner. It could have been worse. I could have had to replace the entire fixture, or worse yet, the wiring to the fixture. So turn on every light switch.
Flush the toilets and turn on all the faucets, too. You might find out your kitchen faucet or sink leaks, or your toilet doesn’t flush, or your shower head needs to be replaced, or your washer or dryer doesn’t work. These are all things you should request the seller repair, and you should go so far as to request all the carbon monoxide and smoke detectors and thermostats have fresh batteries. When buying your first home, you should nitpick.
Even your home inspector might not do a thorough inspection of your attic or crawl spaces. Their biggest concern is with the insulation of those areas, which they can see from afar. When you tour a home, check those areas for rodents or places where rodents could enter the home. If there are holes where rodents can enter, request the seller cover those holes with steel, which rodents can’t chew through. This will save you a lot of trouble you really don’t want.
You can get a sense of what utilities will cost you before offering on a home by making a few calls. Call the city or county regarding garbage and water, and call the electric company to see what the monthly electricity bill will run. If your home has natural gas, that should excite you, as it’s more efficient and cheaper than electricity. Once you have an idea what your monthly living expenses will be, you’re ready to make an offer.
Even after you submit your highest and best offer and it’s verbally accepted by the seller, the seller has more than a week to sign the papers officially confirming the acceptance of your offer, which is contingent on your request for work to be done on the house prior to the sale. If the seller decides to go with another offer because they don’t want to do the work you’ve requested, they can. So don’t get too excited when your realtor says your offer was the highest and best, and the seller has verbally accepted it, because the next eight to 10 days (depending on whether your offer is accepted around a weekend) will be the longest in the entire home-buying process unless your realtor has made you aware of it. Now you’ll be prepared.
If you’re the owner of an “aggressive breed” or “bully breed” dog, you won’t even qualify for home insurance policies with some insurers. Others will raise your rate because of the perceived risk associated with your dog, even if your dog is the gentlest dog on the planet. So before considering homeownership, shop around for home insurance so you get the absolute best policy and price.
If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, What’s Cookin Today
This is the second of a series of articles about how the impoverished American can overcome proposed budget cuts by utilizing other services and methods.
Donald Trump’s proposed budget would cut funding that provides low-income Americans with affordable housing. Specifically, the $3-billion Community Development Block grant program would be cut entirely. Of that $3 billion, 70 percent must be used to benefit low- or moderate-income persons. It prevents or eliminates “slums or blight” and addresses “community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available.” I repeat, “for which other funding is not available.”
That’s not all, though. The entirety of the Section 4 Community Development and Affordable Housing Program funding -- the measly $35 million of it -- would be cut. That $35 million was distributed as grants in the following manner last year:
The HOME Investment Partnerships Program, the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households, would also be cut from Trump’s budget. The HOME program awarded nearly $1 billion in grants in 2016 that built affordable homes all over the country.
Also proposed to be cut is the Choice Neighborhoods program, which has funded affordable housing on blighted or empty lots all over the country. To get an idea of what they’ve built go here. (UPDATE: A cut to Section 8 billed at $300 million would actually be a cut of $2 billion given inflation and raising rents.)
The Self-help Homeownership Opportunity Program, which awards grants to nonprofit organizations that build affordable homes with volunteer labor (like Habitat for Humanity), would also cease to exist. So affordable home builders would have fewer funds to build fewer affordable homes, and fewer Americans would realize the American Dream.
You might say the government shouldn’t be in the business of providing affordable housing, but if you say that, you’ve likely never been near a project or witnessed people sleeping on the sidewalk or under bridges. And just because you don’t see it everyday doesn’t mean it’s not happening. This money is an investment in America. It provides (or if cut, provided) funding to decrease the number of homeless Americans -- 8.6 percent of which are veterans.
But now that affordable housing is on the chopping block (actually it’s always been) and there will be fewer affordable homes to go around, a lot of low- and moderate-income Americans will have to find a way to pay a higher percentage of their income in rent.
There is still hope, though. The proposed budget cuts have to get through the Senate after all, and those programs are still at work building affordable housing throughout the country. Here are three ways you can pay less in rent despite budget cuts to housing and urban development programs.
Bet you didn’t think that would be the first suggestion to save money on housing, but a mortgage on a single-family home is currently a cheaper monthly payment than a lease in most of America. I can see how much cheaper here. The Economist provided a review of America’s housing market in five interactive charts back in August of 2016, and the ratio of home prices to rents was below the long-run average.
In my area, even considering the low rent I pay because I share a two-bedroom apartment with a roommate, buying a home is 23 percent cheaper than renting. I know what you’re thinking: “But I don’t have enough for a 10-percent down payment.” Well, you don’t need it necessarily. There state and local, down-payment assistance providers who will loan or grant you a portion of your down payment if you live in the home for a certain period. You could end up putting down the minimum three percent down by coming up with one percent yourself and getting the other two percent as a grant if you live in the home for three years.
A good rule is to never pay more than 25 percent of your monthly income to your mortgage, home insurance, and property taxes. Use a mortgage calculator to determine the maximum amount you can spend on a home, and don’t let a lender tell you different, because they will.
I attended a Home Stretch homebuyer education course to get a better understanding of the homebuying process, and you should too. Registration fees for many of the courses are waived during the month of June for National Homeownership Month, and you can even complete the course on nights or a Saturday.
These classes tend to be offered by your state’s housing finance agencies, which you can find with a Google search of “<your state> housing finance agency.” I just searched “Home Stretch homebuyer education course near me” and registered in minutes. The class was very helpful, explaining the importance of inspections, budgeting and saving for a down payment, shopping for mortgages, working with a realtor and closing the sale. You even get a manual to take home, but the best part is you’ll get the business cards of people who can help you with the homebuying process. And since these folks already take time out of their day to help first-time homebuyers, you can trust them to look out for your interests. Sure they leave their business cards for a reason, but most of them wouldn’t present at the class if they weren’t interested in helping homebuyers.
The first thing you can do before you even start shopping for a home is start saving for a down payment by putting together a budget. The more money you can put down the lower monthly mortgage you’ll pay. And you should shop for a mortgage. There are so many banks out there, which means there’s plenty of competition for your money. Don’t take the first mortgage you’re offered. You should take the best of three or four options.
People think they can handle the homebuying process without a realtor, but a realtor doesn’t cost the homebuyer anything. Their fee comes out of the seller’s fees, so there’s no reason not to employ a realtor. It’s important to have someone looking out for your interests, and just because that realtor is from the same agency as the seller’s realtor, that doesn’t mean they’re trying to screw you over. In fact, it could work in your favor.
The one thing that does cost you money is the home inspection, which is worth the $400 to $600 you’ll pay. If you waive an inspection and buy a house that’s on land being eroded and have to repour a foundation, you will have wished you paid $500 for an inspection. And always be there for the inspection. It’s probably some of the most important information you can get before buying a home.
Also your responsibility is to investigate the neighborhood where you’re buying a home. The first rule of real estate is location, location, location. Go to open houses (they’re good practice) and afterwards talk to the neighbors to get an idea what the neighborhood is like. Come back at night and check the crime statistics online. Most police departments publish a crime map on their websites. If not, call them and ask what crimes have been committed in the area lately and how often. Zillow has a 10-point rating system for the schools in the area, but it’s not a bad idea to drive by them and the parks to see what kind of shape they’re in.
Even with average home prices increasing due to a lack of supply and low interest rates, it’s not a bad time to buy considering the proposed cuts to housing and urban development budgets. Supply is expected to increase but still won’t satisfy demand, and while it’s a seller’s market, taking advantage of the relatively low interest rates before they climb could save new homeowners thousands. Homes are only going to get more expensive, albeit at a slower rate, so you might as well get in while the getting’s still good.
If you can afford to purchase a home outright, negotiating a contract for deed on a home is still better than paying rent. Paying rent doesn’t allow you to create equity in your home, but a contract for deed does. You’re going to own that place someday, but be careful to read your contract for deed carefully. Some are written so that just one missed payment can void the contract. Then all the work you put into the place that wasn’t yours yet is lost to holder of the deed. A lot of condos and townhomes can be found on a rent to own basis, and can still be cheaper than renting.
If you don’t qualify for a mortgage, you can still make renting more affordable if you rent a spare bedroom. Yes, renting more space than you need is more expensive and costs more to heat and cool, but you can make a whole lot of money in a whole lot of places renting that spare bedroom by the night using Airbnb. There are stories of Airbnb hosts making $1 million annually, but you’d need pretty nice digs to do that. But if you’re struggling to make rent (which is likely why you stumbled onto this piece), an Airbnb business can be a lifesaver.
If you’re a natural clean freak and don’t pay for water or laundry, an Airbnb business is perfect for you. All you have to do is figure out how much you can afford to pay in rent, because if the third month comes along and you don’t have half the rent because you couldn’t get enough people to reserve your spare bedroom, you won’t have a home for very long. Generally, if you're paying more than half of your income on rent, that's an unsafe place to be. But if you're going to rent your spare bedroom, you can stand to pay half of your income in rent. Whether the owner will accept your credit based on your income is another story, though.
The beauty is Airbnb does most of the work for you (for a small fee, of course, generally 3 percent of earnings). Take some pictures of your clean home and describe it, you and the location. Be honest. Don’t expect people from out of town to know what they’re getting into. You don’t want to host the people that give you bad ratings because of your location, even though they actually choose the location. If you’re in an urban area where gunshots are regularly heard, make sure people know that before they wake up to gunshots. Even community demographics can be helpful, because some people are racists, and you don’t want to host those people. Being thorough in the description of your home and location can save you from bad ratings down the road, and your rating will affect how many reservations you secure and what price you can charge.
Before you get ahead of yourself, though, call your city hall and ask them if there is an ordinance governing short-term renting or home sharing. Airbnb is not legal everywhere. Some cities have outlawed “transient lodging” or “short-term rentals,” with hefty fines accessed to those who are caught.
New York City started fining Airbnb hosts in February, but has issued only a few fines since. Basically, it’s a really hard law to enforce in large municipalities where city employees are already overwhelmed. But neither GCN Live nor I advocate illegal home sharing. I’m actually trying to change the ordinance in Bloomington, Minn. outlawing short-term rentals less than 30 days by forcing hosts to pay the same percentage in lodging taxes that hotels pay. It’s only fair, and it won’t cut too much into hosts’ profits. The city council doesn’t seem to be interested in taking me seriously, but if I get enough people to help me persuade them they’ll have to address the issue.
If home sharing is illegal in your city, move. If you can’t afford to move, you can use the following as a template to get the ball rolling on legalizing home sharing or short-term renting in your city. Of course, you’ll have to find the law governing transient lodging or short-term renting in your city code and alter it accordingly. Otherwise, you can use this to draft a letter or email to your city council:
To Whom It May Concern:
I think Bloomington’s ban on transient lodging is wrong, and I have a solution. First of all, what people do with the homes they own or rent is up to those people and their landlords, and the City of Bloomington, or any municipality, should not be allowed to limit a person’s ability to make a living.
Secondly, the current law is nearly impossible to enforce, because despite monitoring websites like Airbnb, there will still be transient lodging made available through Craigslist, WarmShowers, and other websites. People will find a way.
There’s no reason why the City of Bloomington shouldn’t profit from transient lodging, though. If every Airbnb or similar host paid the applicable lodging taxes for their location, hotels would have little reason to complain, as the people renting Airbnb rooms are more likely to camp than pay for a hotel, and the hosts would be paying the same taxes as the hotels.
I propose the following alteration to the City of Bloomington Code of Ordinances subsection 14.577.
14.577 ILLEGAL RENTALS, OCCUPANCY LIMITS AND NO SUBLETTING
An owner may adopt standards that reduce the maximum allowed occupancy of a dwelling unit from the standards set forth herein. The maximum permissible occupancy of any licensed rental dwelling unit is determined according to the 2012 International Property Maintenance Code and as follows.
(a) Not more than one family, except for temporary guests, will occupy a licensed rental dwelling unit.
(b) No one will lease, license or agree to allow the occupancy, possession or tenancy of a licensed rental dwelling unit to more than four unrelated persons.
(c) Tenants of a licensed rental dwelling unit must not lease or sublet the dwelling unit to another without the prior approval of the property owner.
(d) No one will lease, license or agree to allow the use of a dwelling unit, or portion thereof, for transient lodging, unless applicable lodging taxes are paid.
I believe that tax is seven percent for the City of Bloomington. You can find the applicable codes here: http://www.house.leg.state.mn.us/hrd/pubs/lodgetax.pdf.
Since Airbnb hosts must pay taxes on their Airbnb income and fill out a W-9 or other appropriate tax form, collecting the tax would be as simple as applying that seven percent to the Airbnb income already reported each year. Let me know your questions or concerns.
If a member of your city council or an administrator from city hall doesn’t get back to you in a couple of weeks, contact them and ask when it will be addressed. If they say the council isn’t interested in addressing the issue, ask them when the next city council meeting is and attend. There’s always a time for public comment at those meetings, and it’s a good way to get media exposure for your cause and recruit other supporters. There really is strength in numbers, so if you show up to the next city council meeting with 20 people behind you, and every one of them takes the time to speak their mind on the issue, your city council members will have little choice but to refer your suggestion to the ordinance committee for review.
It takes months to accomplish anything in city government, so be prepared for a lot of waiting. Take solace in the fact you’re trying to improve your community by increasing tax revenue for street and sidewalk repair, etc.
So there are three ways to pay less in rent despite housing budget cuts. Next up in our series on how to navigate federal budget cuts, we’ll look at how to get around proposed cuts to energy and transportation.
If you like this, you might like these Genesis Communications Network talk shows: The Costa Report, Drop Your Energy Bill, Free Talk Live, Flow of Wisdom, America’s First News, America Tonight, Bill Martinez Live, Korelin Economics Report, The KrisAnne Hall Show, Radio Night Live, The Real Side, World Crisis Radio, The Tech Night Owl, The Dr. Katherine Albrecht Show, USA Prepares, American Survival Radio, Jim Brown’s Common Sense, Home Talk