Until it slows to a crawl, idles, or crashes, you likely take for granted that your laptop or desktop computer will do what you expect it to. But it’s risky to overlook regular computer maintenance and even worse to be in the dark about whether your backup system is functioning. The fact is your computer will give out on you one day; you just don’t know when. The average useful life expectancy of today’s computers is anywhere from two to five years, says Matthew Cohen, chief technologist for Clareity Consulting, a real estate technology firm based in Scottsdale, Ariz. But you’ll likely be able to increase the longevity of your devices—and eke out perhaps seven or eight good years—by following these tips. In short, a fast, fit, and trouble-free computer requires regular updates, cleanups, and backups.
Keeping It Clean
Your computer is probably covered with tiny dust particles, which can severely shorten its life span. “Dust is a killer,” says Burton Kelso, owner and chief technology helper of Integral Computer Consultants, a Kansas City, Mo., computer repair company. “When dust collects inside your technology, it can cause your devices to overheat, which will cause them to fail.”
To beat back interior dust bunnies, Kelso recommends his clients—15 percent of whom are real estate agents—clean the inside of their computers once a year. If you’re not comfortable with unscrewing the housing and zapping the inside with a can of compressed air, then hire a professional. The can costs less than $10, while professional help will set you back between $50 and $100 per hour.
Aside from keeping mechanical parts of your computer clean, you should also pay attention to software clutter. Delete programs and applications you don’t use. Cohen suggests using the “add and remove software” feature to cull old files and programs. “Always keep the hard drive at least 20 percent empty,” he adds. “If you have too much stuff, it’s time to upgrade your hard drive, with technical help, or remove unneeded files.”
Don’t install another program just to find out which programs to clean up. Cohen says practitioners should avoid utility apps that promise to optimize or clean your computer. “They cause more harm than good,” he says.
Older computers used to benefit from defragmenting, which basically compacted information on your hard drive, speeding up your system. Cohen says most Windows defragmentation utilities are set to run automatically. “However, sometimes, one needs to analyze and defragment the discs,” he adds. To do this, go to the Start menu, type “defragmenter,” and locate the “disc defragmenter” utility. Mac users “generally don’t have to defrag,” Cohen notes. “It does it on its own.” Finally, check your preferences and examine which programs launch automatically upon startup and which ones are constantly running in the background. You can almost always change the settings so that they use up less of your computer’s operating power.
Kelso says malware is the cause of many computer issues, so Windows and Mac users need to take protective steps. Always download antivirus software directly from the vendor site, and don’t share your account information with others.
Part of keeping your computer secure is limiting access to it. Marc Catuogno, director of information technology for Better Homes and Gardens Rand Realty in New City, N.Y., oversees 200 computers for 800 active agents and 23 offices. To keep data safe on corporate computers, Catuogno suggests centralizing important information and making it inaccessible to the general sales population.
“We keep our data in the main home office,” Catuogno says. “Anything really important we keep on our extranet, [which] is password-protected and limits the harm that agents can do to each other’s data.”
Keeping information stored this way can actually help agents’ computers run more efficiently, because the hard drive doesn’t have to store data locally. “There is very little information actually on the computers; everything is Internet-based,” Catuogno says. “We encourage the agents to keep their own portable thumbnail drives if they need to access things.”
And it’s not just other users you need to be careful about; be choosy about the web applications you use as well. Read their user agreements and research past security breaches before signing up. If you’re looking for a free e-mail solution, choose Gmail, Kelso says, over the less-secure Yahoo or AOL.
Sometimes computers are slow because you’ve been ignoring that box that pops up telling you it’s time to update programs, or even to get the latest operating system. If you’re really far behind, that can mean your software and hardware don’t have the patches they need to interact smoothly and safely.
However, don’t get too update-happy. Sometimes it’s best to wait a few days on major updates to make sure they work properly. United Real Estate Scottsdale broker Byron Short, who oversees information technology for 42 agents, warns practitioners against updating immediately. “There’s no reason to be on the bleeding edge,” Short says. “Let somebody else take the damage. Then come in when it’s proven and it works.”
Having an End Game
Everyone needs to prepare for the worst-case scenario: losing your data in a crash. Store critical business data on secure servers or using cloud-based systems like Carbonite or Dropbox. Even when your computer suffers a catastrophic failure, this doesn’t mean your business has to experience it as well. Kelley Skar, a real estate practitioner with CIR Realty in Calgary, Alberta, says the last time his laptop crashed in 2012, he lost 30 percent of his data. Fortunately, he’d backed the remainder up using online storage systems. Since then he’s spent about $300 to add a two-terabyte external hard drive that uses Apple’s Time Capsule program to back up his data locally once a month.
No matter how well you manage your computers, you’ll need to replace them eventually. Catuogno’s company uses Windows and Acer machines, but it doesn’t change out its inventory wholesale. Instead, he replaces the oldest machines with new PCs every 12 to 18 months. The company does keep older models that still have life in them available for agents who prefer to stick with what they know..
Michelle Hofmann is a Los Angeles-based freelance reporter who loves all things real estate. Connect on Twitter @realestatewritr or via LinkedIn or email@example.com.
Design changes, as does architecture. Trends don’t emerge as rapidly here as they do in say, food or fashion, but the economy, the environment, and demographics all spur shifts in the choices of materials, designs, layouts, and construction methods for single- and multifamily dwellings.
These 12 trends reflect ways to cope with environmental challenges, incorporate new building materials and methods, and alter the looks and functionality of our homes. Hear top designers and architects explain why these emerging trends are important and how they’ll influence real estate choices in the near future.
1. More Resilient, Sustainable Homes
Why it’s important: Mounting climate change pressures mean buildings need to better withstand natural disasters. Similarly, because our natural resources are dwindling, it’s increasingly important that structures be designed and built sustainably. Industry professionals are finding materials and construction techniques to meet both challenges. The Fortified Home Certification standard—created by the Insurance Institute for Business & Home Safety and Architectural Testing Inc.—represents engineering and building levels that provide sturdier structural envelopes that are more resilient against the worst weather conditions than those found in most current building codes. And the trends of making better use of natural resources and generating energy on site—for a double win of more energy and less money spent—will continue into 2016.
How this will impact real estate: Increased durability means more lives and buildings will be saved, costs to rebuild will be pared, and insurance premiums will be lowered. The trend is happening nationwide, not just in hurricane-prone locales like Florida, says Jacqueline Nunez, founder of WonderGroup LLC in Boston. Her Allandale Residences project, designed by Merge Architects in Boston, will be among the first residential developments in New England to be receive Net-Zero and LEED Platinum certifications. It will include 16 townhomes and four condos on a two-acre site in West Roxbury, Mass. “It’s responsible to build environmentally correct,” Nunez says. Such projects have the potential to change real estate offerings as home buyers ask professionals not just about square footage and amenities but also about materials and methods, especially in areas where climate change is most destructive— “where sea levels are rising and strong hurricane winds are blowing,” Nunez says.
2. Classics, Made More Affordable
Why it’s important: More home owners want quality, luxurious materials, but the finest choices aren’t always in the budget, says architect Michael Prifti, principal with BLT Architects in Philadelphia. “Home owners seem to prefer stone, for example, over brick, over clapboard, and over vinyl, but not everyone can afford stone,” he says. With construction and material costs increasing, the need has emerged for less expensive options that still look luxe and hold up well. For example, instead of solid stone facades, architects may opt for stone veneer on studs and drywall instead of plaster inside. Or, rather than go with terra-cotta, a timeless but expensive material, they can select a handsome thin terra-cotta veneer applied to manufactured panels, Prifti says. Both examples are less costly and reflect modern building methods, particularly for constructing multiunit developments.
How this will impact real estate: Smart real estate professionals should explain to cost-conscious fixer-upper clients that there are new materials out there that might better fit a tight budget. After all, architects and builders are constantly being challenged to find value for clients in both residential and commercial development, says Prifti. “We research to find new products and new ways to use existing materials, so they’re durable, affordable, and offer more colors and textures,” he says. According to colleague and BLT Senior Project Architect Jennifer Burnside, “Many of the new products, materials, and methods lend themselves to fabrication in large modular configurations in weather-controlled factories, are shipped on trucks to a site, and are erected with a crane, which saves time and labor.” Working this way also saves your clients money.
3. Drought Awareness
Why it’s important: Droughts continue to affect large areas of the U.S., making water more expensive and decreasing its availability, especially in the Southwest and California. Water-saving fixtures such as low-flow toilets and showerheads have become standard—even mandated—in many areas, but architect Gita Nandan, with architectural firm thread collective in Brooklyn, N.Y., says buyers are looking for more. In the backyard and rooftop of a four-unit Brooklyn building her firm designed, there’s a rainwater harvesting system with modular vertical tanks connected to a drain from the rooftop. The rainwater is used to irrigate the roof gardens and the yard. The building also features low-flow fixtures. Since these features were added, the building has seen a 30 percent drop in water consumption.
How this will impact real estate: Water conservation will become as important as energy conservation, and homes that collect as much water as they consume will be as popular with buyers as Net-Zero–energy homes now are, Nandan predicts. She expects that real estate professionals will see more demand for water-saving measures such as water-smart irrigation sensors, composting toilets, gray-water recycling systems, and rainwater harvesting.
4. Digitized Manufacturing
Why it’s important: Sustainable materials such as glass, in conjunction with new manufacturing technologies, are expanding the choice of colors, textures, and sizes of materials available for home design. At the same time, 3-D manufacturing, what some call the third industrial revolution, has created a new panoply of readily available, prefabricated materials as an alternative to more expensive custom choices, says architect Cecil Baker, founding partner of Cecil Baker + Partners in Philadelphia. One example Baker cites is a new manufactured technology for glass, which makes it possible to incorporate patterns and etched surfaces directly into the glass. This new process means that glass can also be manufactured with LED lighting built in, which adds sophistication and also illumination, a double win, Baker says.
How this will impact real estate: The glass-and-LED combination is just one new technique that can result in a product that incorporates a sustainable material into a sturdy, practical, energy-efficient, and glamorous new surface for kitchen and bathroom countertops. Such choices greatly personalize rooms much more than another granite, laminate, or Corian top might do, and help to distinguish listings in a crowded market.
5. Reclaimed Wood Floors
Why they’re important: Many home owners crave authenticity, no matter how durable, affordable, and convincing the imitations may be. A case in point: the increased demand for reclaimed wood boards, which wear well, show the patina of age, and reveal visual character, says Jamie Hammel whose The Hudson Co. custom mills and finishes flooring, paneling, and beams at its mill in Pine Plains, N.Y. “People like knowing the history of their materials and products — the provenance — and these materials tell a story,” Hammel says. He adds that consumers are drawn to the sustainability of reuse as well as the health benefits of choosing older materials that don’t off-gas. “There’s a parallel with what’s happening in the food industry,” Hammel says.
How this will impact real estate: The type of wood flooring found in many homes will take on greater importance for many segments of the homebuying population, and it may be that soon not just any wood will do. The crème de la crème of wood flooring —reclaimed boards—may become the equivalent of once sought after granite and now quartz or marble. You may also see more home owners favor this option when they replace existing floors. Finally, be aware that the latest generation of reclaimed boards displays a lighter, Scandinavian matte finish that looks better with contemporary furnishings that are becoming more in vogue than traditional furniture.
6. Softening Modern Severity
Why it’s important: With so many home owners now favoring modern design, yet not wanting a harsh, laboratory look, designers search for alternatives. Architects Ada I. Corral and Camille Jobe, of Jobe Corral Architects in Austin, Texas, are among those with a solution: Select materials that offer a handcrafted, warmer style rather than an “off-the-shelf,” cold, mass-produced look for their modern settings. “We’re trying to bring craftsmanship back while maintaining a clean, crisp overall look,” Corral says. One favorite choice is burnt wood, a Japanese technique that works well with cypress and cedar and makes the wood look older, yet also strengthens its resilience against rot, pests, and fire. Another favorite is metal that’s shaped into thin, elegant veneers for shelving, beams, drawer handles, around doorframes.
How this will impact real estate: Keep this trend in mind while staging modern-styled properties or alerting buyers and sellers to new decor ideas. These types of materials and new applications add surprising touches and warmth in modern dwellings — a feeling of a more lived-in, loved setting. And their appeal will only grow, pundits predict. “So many people have tired of having their houses look like spare hotels. These choices differentiate — and warm — rooms and homes,” Jobe says.
7. The Tiny House Movement on Wheels
Why it’s important: Downsizing is big, reflected in part by the growth of the tiny house movement. But flexibility and mobility are also sought after, and many desire a hipper method of attaining this than RVs can offer. Enter the “Escape Sport”, an 8 1/2-foot-by-20-foot, 170-square-foot house on wheels that meets these challenges and more. It can comfortably sleep up to four people and can withstand bad weather with its steel frame, aluminum siding, and weather-resistant wood. It’s also environmentally friendly with a solar power system, composting feature, incinerating toilet, gray water irrigation hook-up, rainwater integration, advanced electric fireplace, and energy-efficient induction cooktop. And its toilet and sink are full sized, which is not always the case with RVs. Developer Dan Dobrowolski says this option will appeal to home owners who want to travel in smaller spaces, but don’t want to feel claustrophobic or give up the comforts of a bigger home.
How this will impact real estate: The design profession keeps looking for options beyond traditional, stick-built houses, hence the uptick in prefabricated, manufactured housing. This brand-new example offers shelter to those who are keen on smaller houses, but don’t like the idea of always staying put, Dobrowolski says. It also offers other possibilities for the real estate industry. It allows some home owners to “test drive” small-scale living. And if the trend continues to expand, landowners may find empty lots in vacation areas to be the perfect spot to rent out to these home owners on wheels.
8. Walk-In, Universal Design Pantries
Why it’s important: Currently there are 78 million baby boomers and the aging population is increasing — in fact, it’s expected to rise by 50 percent between 2010 and 2020, according to Aging in Place, a state survey of livability policies and practices. A deep, wide walk-in pantry allows a walker or wheelchair to maneuver through easily. If the pantry also has a flexible shelving system that can be lowered through special hardware that’s another boon for home owners seeking to remain independent, says Rosemarie Rossetti, an expert in universal design who constructed a demonstration home and garden with her husband in Columbus, Ohio, after she had a spinal cord injury at age 44, 11 years ago. “A pantry with proper shelving has a lot of benefits for seniors lacking mobility and not able to open folding doors or reach high items,” she says.
How this will impact real estate: Walk-in pantries and pocket doors, which are easier to open and close than traditional doors and save 10 square feet of floor space, are just two of many universal design features becoming more desired and even edging into the mainstream. “Children and those who are shorter also will be able to reach shelves easier, and when outfitted with better lighting, pantries are safer,” Rossetti says. Homes that have universal design features will be in greater demand by both the senior market and younger informed home buyers, says Joseph Mezera, a Seniors Real Estate Specialist who focuses on this niche through his Seniors First Realty in Columbus, Ohio. “Some may not want big doorways and high toilets that they associate with nursing homes, but those who are smart will listen to trained salespeople explain that it’s better to take preventive measures.”
9. Better Integration of Indoors and Outdoors
Why it’s important: Screened porches once were the prime quasi-outdoor space in a home that could protect occupants from bad weather yet offer a feeling of the outdoors. But many porches block daylight and views, and they can only be used part of the year in some climates. Now, well-designed, large-scale door panels that fold up like garage doors or open into a home’s walls via big pocket doors are becoming more readily available at affordable prices, says architect Elizabeth Demetriades of Demetriades + Walker in Lakeville, Conn. Some have highly functional, retractable insect screens, too.
How this will impact real estate: These new bigger openings permit better views of the outdoors, greater enjoyment, and easier access between indoors and outdoors. “Blurring the distinction seems to be a leitmotif for many of our clients these days,” says Demetriades. And the trend may further increase interest in landscape design since the greater connection will make yards more a part of homes rather than separate entities, only to be enjoyed in prime weather.
10. Softer, Layered Color Palettes
Why they’re important: Color trendsetter Pantone typically debuts only one superstar color of the year. But in 2016, two are taking center stage: “rose quartz” and “serenity.” Both reflect the rise of softer colors, along with the continued use of whites and creams. Some designers think this color direction and its layered palettes lead to a more personalized, sophisticated design. Cheryl Kees Clendenon of In Detail Interiors in Pensacola, Fla., is a fan. “I like the layered approach since it evokes a more emotional response and doesn’t read as a single, stark color,” she says. Clendenon attributes the situation to current affairs as much as to design. “When people get more nervous, which many are because of what’s happening in the world and [it being] an election year, they want colors that aren’t wild and crazy but calming, which these are,” she says. Time will tell if a non-election year and fewer terrorism threats may inspire a return to bolder hues.
How this will impact real estate: These new colors are already turning up inside homes in countertops and backsplashes, as seen by Prexury by Cosentino’s “rose quartz,” a durable, easy-maintenance manmade aggregate of semi-precious stones. Elsewhere in homes, the more complex color palettes will inspire buyers and sellers when making selections for everything from paint to fabrics and furnishings. But pairings are key. Clendenon suggests using Prexury’s rose quartz with off-white or cream cabinets. Along with this approach will come more textures and patterns, but again in subtle combinations, she says.
11. Copper Chic Surges (Even More)
Why it’s important: The old standby of copper—think of those pots your parents, grandparents, or Julia Child used—started its re-emergence last year. And the reason that it’s becoming a more widespread alternative to stainless steel, wood, and other materials isn’t all surface. Yes, copper can add sheen, sparkle, and a 1940s Hollywood glamour. But an equally big impetus is that it reduces more than 99.9 percent of bacteria in between routine cleanings, important because antibiotic-resistant superbugs are on the rise, according to The Copper Development Association, based in New York.
How this will impact real estate: This shiny, goldlike hue will become more prevalent in homes as concern grows about buying healthy houses without mold, toxins, and bacteria. To help, U.S. manufacturers are producing more options in copper than just refrigerator, oven, and other appliance fronts, the developments that initially helped revive the trend. Throughout homes, buyers can add copper sinks, door handles, light switches, and trim. To enhance its appeal, manufacturers are also expanding the types of hues available. Already, there’s a copper-penny color, brushed nickel, yellow brassiness, and bronze on the market.
12. Enhancing Entertainment Space With Niches and “Back Kitchens”
Why it’s important: Living keeps getting more casual, and this is certainly the case in the kitchen. “Everything happens in the kitchen, and people don’t want to be closed away from interaction with their families,” says Chicago kitchen designer Mick De Giulio of de Giulio Kitchen Design, author of Kitchen (Pointed Leaf Press, 2015). Consequently, they’re willing to put more into their kitchens — more space (500 square feet is not uncommon, he says), bigger budgets, better design, more windows and light, and the types of detailing, like moldings and beams, once reserved for more formal spaces.
How this will impact real estate: As open plans that incorporate more important kitchen space become commonplace, finding ways to keep the workspace neat becomes key, too. This may mean more niches and elements that hide small appliances built into the main kitchen. Home owners with more room and a bigger budget might consider adding a “back kitchen,” where preparations take place and small appliances like toasters and coffee makers are stored. To maintain the interflowing social feel, the spaces remain open to one another. A growing number of home buyers may be willing to forgo a dining room, says De Giulio.
Be on the lookout for these trends in 2016. You’ll be in better tune with buyers who are searching for these features in their new homes or want to add them as space and budgets permit. And staying aware of the latest trends can help you guide sellers to differentiate their listings beyond location, size, and amenities.
Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space. Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman
In King of the Mountain, if you aren’t fighting hard, you aren’t really playing. And if you aren’t playing, you’re losing. In this children’s game, where the goal is to push whoever is occupying the high ground out of the way and take his or her spot at the top of the mountain, the only person whose success doesn’t depend on improving in position is the king.
But maintaining the status quo doesn’t benefit anyone besides the king. And even the king can’t just cruise along — when everyone else’s full energy is directed toward taking you down, you won’t last long if you aren’t constantly defending your territory. If you want your brokerage to end up on top, you have to make sure your sales associates are playing to win.
What percentage of agents on your team are sincerely playing to improve rather than playing to cruise? The answer is a telling indicator of your team’s potential. People who are cruising stick with what they’ve always done. They’re content with where they are. In contrast, those playing to improve constantly ask themselves “What can I do to get better?” They’re focused not on maintaining but on looking for the next opportunity and stepping into it. Just as King of the Mountain players can’t depose the monarch of the moment without stepping up their game, a team in cruise control is in no position to grow and reach new heights.
If you’re leading a team that has an abundance of cruisers, it’s time to shift to a new gear. Make it your 2016 goal to change people’s mindsets so that at least 80 percent of your team is operating in “improvement” mode at any given time. You won’t hit that target overnight, but you’ll start seeing rapid and sustainable improvement by making the following three adjustments to your team’s culture.
Build a Culture That Rewards Going For It
Too often, team cultures promote the “safe play”—put in your time, don’t rock the boat, follow the script, and, after x years, you’ll be in line for a payout. But you didn’t get into real estate to play it safe. Such a culture stifles innovation and puts your team in prime position to get lapped by the competition. Shake things up by finding ways to publicly praise your outside-the-box thinkers and doers. Make sure agents understand that the way it’s been done before probably isn’t some magic formula that’ll always work. Empower them to bring you any idea they’re willing to own — and to pitch the ones you approve to colleagues.
Challenge People to Set Big Goals
Use every coaching opportunity you have, whether a formal performance evaluation or a hallway high-five on a big sale, to lead your team members to dream boldly about what’s next. Let them know you’re pleased when they hit a home run, but don’t let them milk previous successes. You’re leading a team of people who have chosen a career in sales, so it’s safe to assume they’re okay with competition. Use that fact to snowball individual aspirations and successes into teamwide goals and big-time wins.
Only Add Team Members Who Raise the Bar
Building a team that’s fully on board with what you’re working toward is never more important than when you bring on someone new. Only hire people who will raise the bar. Think of each hire as an opportunity to add a piece you don’t have yet, and you’ll stimulate everyone to step up.
These three enhancements to your team’s culture aren’t rocket science, but they require a strong commitment to continuous improvement that starts with you. The results you’ll see aren’t hard to interpret, either. Your team should be either on top of the mountain or striving to get there. And either way, the fight to improve continues.
Jason Forrest is a sales trainer; management coach; member of the National Speakers Association’s Million Dollar Speakers Group; and author of three books, including his latest, Leadership Sales Coaching. One of Training magazine’s Top Young Trainers of 2012, Jason is an expert at creating high-performance sales cultures through complete training programs. He incorporates experiential learning to increase sales, implement cultural accountability, and transform companies into sales organizations. Learn more at
You can deduct all of the mortgage interest (not principal) payments you make on your home, up to a $1-million loan for a couple filing jointly. This applies to your home equity line of credit (on a loan up $100,000) and second mortgage as well.
If you own a second home, such as a vacation cottage or mobile home, you can deduct the mortgage interest for it as well, so long as you reside there for the longer of 14 days per year or 10 percent of the time it is rented out.
Mortgage points and insurance
In addition to the mortgage interest, you can also deduct the points you pay on your mortgage for your main home in the year you pay them, as well as points paid for a home equity loan. Points paid for refinancing your home mortgage generally have to be amortized over the length of the loan.
You can also deduct any premiums paid for private mortgage insurance (PMI) on your loan if you earned less than $109,000 in 2015 and the policy was taken out after 2006.
As strange as it sounds, you can deduct taxes on your taxes! Your property taxes are a deductible expense. Keep your property tax bills and proof of payment.
If you have some sort of home-based business, you may be entitled to a home office deduction on your taxes. There are several hoops to jump through to qualify for the deduction, the two biggest being that your home must be your primary place of business, and that you use the office space only for work. (The IRS spells out the rules for claiming the home office deduction in Publication 587.)
There are two ways to calculate your deduction. Under the simplified option, you can deduct $5 per square foot of your home office’s area, up to a maximum 300 square feet.
The more complex (but often more advantageous) option involves dividing the square footage of your office by the total square footage of your home; this yields the “business percentage” of your home. You then multiply allowable home costs — namely mortgage interest and utilities — by the business percentage to arrive at the deductible amounts.
If you implemented energy-efficient improvements to your home, you can get a credit of up to 10 percent of the cost of those improvements, to a maximum of $500. This covers expenses like new windows and doors, insulation, and high-efficiency heating and cooling systems. You could also get a credit for 30 percent of the cost of renewable energy systems, like solar power.
There could also be state tax credits for these items as well which you can stack on top of your federal credit.
Medical home improvements
If you have a medical condition that necessitates home improvements, such as adding a stair lift because you have arthritis or an air filter because your spouse suffers from allergies, you may be able to write off some of these costs as part of your medical deduction.
However, you can deduct only that portion of your medical costs that exceed 10 percent of your adjusted gross income (7.5 percent if you are 65 or older).
And in most cases, you can deduct only the difference between the cost of the equipment and the increase in value to the home from this improvement. Some improvements (such widening doorways to accommodate a wheelchair) add no marketable value to the home but are fully deductible if you meet certain income requirements.
If you sold your home in the last year, you could be eligible for some tax savings resulting from that transaction. The costs of your real estate agent’s fees, advertising, and title insurance are deductible expenses. You can also deduct improvements you made to the home in order to sell it, but only if you have a taxable capital gain from the sale.
If your home was damaged by weather, fire, theft, or another disaster, you’ve suffered a casualty loss, a portion of which may be deductible. If your loss was greater than 10 percent of your income and was not covered by insurance, you can deduct the loss. You’ll need to be able to document the value of what was lost, however.
Credit to Brette Sember
Brette Sember is a former attorney and author of more than 40 books, including The Divorce Organizer & Planner, The Complete Divorce, and How to Parent with Your Ex. She writes often about law, parenting, food, travel, health, and more. Brette also writes for AvvoStories.
In December 1962, Korea underwent one of the harshest winters and worst harvests. People struggled to feed their families and find work. My family was one of the victims of this tragic period. I distinctly remember, eating the same grain day after day – millet. At the time, I only saw it as a way to fill my stomach. But years later, I now realize that we were blessed to eating one of the healthiest and highly valued grains in the world.
A vivid memory I have of poverty as a boy is when I went to Seoul for the first time. I was with my mother and older brother who was a proud student of Seoul University. At the time, he rented a small room by his university. My mother wanted to help organize his room. So at the break of dawn, my mother, brother, and I headed to Ui-Sung train station in the midst of a blizzard.
When the three of us arrived, my mother only purchased two tickets to Seoul, one for my brother and one for herself, none for me. Rides were free for children who were 6 years old and younger. Let me take this moment to say that despite being 11 years old, I looked like I was 6 – I was a late bloomer. So my mother used my youthful appearance to save money on one ticket. While one ticket may not seem costly to most, it was enough to help our family find our next meal. But my memory of poverty does not stop here. In fact, it began at 10:30AM – the time our train arrived.
Hundreds of people scurried through the narrow doors and within seconds the limited seats were taken. My brother, mother and I opted to stand as the train took off. Hours later, at 8PM the train finally arrived at Chung-rang-lee Station in Seoul. With weary eyes, I looked around and noticed the conductor punching the tickets. One by one, he checked all the passengers and made clicking sounds as he punched their tickets. Eventually, he asked my brother for our tickets. Since I was still young, I did not quite understand what was going on. But I noticed their expressions. My mother and brother seemed uneasy and were trying to explain why I didn’t have a ticket. They lied that I was 6, but the conductor was not convinced.
As we squeezed through the crowded halls, I tightly held onto my brother’s hand. I was confused and worried. Finally, we met the director. Within seconds, the director looked at my brother and I with piercing eyes, and slapped my brother’s face. I was shocked. The conductor insulted my brother, calling him a fraud. He scolded him for attending and wearing a badge from a prestigious school, yet committing dishonesty. My brother only replied with, “I’m sorry, Sir”. My heart was broken as I saw my brother being torn down. I looked back and saw my mother witnessing everything with horror. After 52 years, I still have feelings of agony and guilt for my mother and brother. At the time, I didn’t know what to do. And quite frankly, as a kid, there was nothing I could do. When I saw my mother, even from a distance, I could see tears streaming down her face. She rushed over to us and knelt down in front of the director and begged for forgiveness.
She apologized, saying “I’m sorry, Sir. I’m the one who told my son to lie. He’s not guilty. I am. So please punish me instead.” She trembled as she sobbed with fear.
The memory I have watching her fragile shoulders, shaking with so much pain, still breaks my heart to this day as a 63 year old man. And even now, I can still see my mother’s trembling shoulders.
Written by Chris MoonKey Nam / New Star Realty & Inv.
If you’re a buy and hold rental property investor and you own a condominium, you’ll want to make sure that you have the right coverage since buying condo insurance is different than buying single family home insurance.
In order to mitigate the risk of damage or loss to your rental property, here are some important things to consider when selecting your condo insurance policy.
Understand the Terms
Insurance companies offer different coverage for different properties based on the terms defined in your insurance policy. For example, coverage differs greatly between a condominium and a single family home. The coverage also differs on whether or not the property is defined in the policy as your primary dwelling or rental property.
Read and reread the terms and conditions for any condo insurance policy before agreeing to their terms. You want to ensure that you are selecting the policy that best covers your investment from loss or damage.
HOA Coverage vs. Personal Property Coverage
Condominium insurance differs from single family home insurance in that condo owners share insurance liabilities with the condo’s homeowner’s association (HOA). Because of this, it can be difficult to understand which policy covers what events and damage.
Personal property condo coverage generally includes:
A condo owner’s personal property insurance is responsible for everything within the interior structure, starting at the studs and working your way in. Any damage that occurs to the electrical, plumbing, floors, drywall, fixtures, and appliances, for example, falls to the property owner and needs to be covered under their personal property insurance.
If the condominium is a rental property, however, you will not need to have as much coverage for personal belongings since that liability will fall to the tenant under their rental insurance.
Loss assessment is a type of coverage that offers protection against damage caused to common areas owned by the condo’s homeowner’s association. If severe damage to HOA property exceeds the covered losses to the buildings or common areas, you and all other members of the HOA may need to supplement the difference to pay for repairs. If you have loss assessment coverage, you won’t have to pay for your portion of the repairs out of pocket. Pools, elevators, common areas, and recreation areas, for example, would fall under this coverage.
Your personal property insurance coverage should also cover liability in the event that a person gets injured or their belongings become damaged while within your condo. This liability coverage helps cover the bills in case you’re held responsible for their injuries.
Loss of use
If your condo becomes uninhabitable due to a loss covered by your overall policy, this coverage can provide you with the fair rental value of the property.
HOA insurance master policies generally cover:
Exterior structures, common areas, and grounds
While your personal property coverage is responsible for everything within the interior structure, your HOA’s insurance is responsible for every exterior structure, including the roof, exterior walls, grounds, community buildings, and shared amenities.
The specifics of what an HOA’s master policy will cover varies by association, so it’s important to review the master policy thoroughly. Make sure that you understand the bylaws of your HOA as well as the details of their insurance coverage.
Ask about flood, water, and natural disaster coverage, so that you understand what you will be responsible for as a condominium owner. Research whether you need flood insurance for your condo and if your community abides by FEMA’s recommendations under the new Homeowner Flood Insurance Affordability Act of 2014. If the master policy doesn’t include flood insurance, you may need to ensure that you’re covered under your individual insurance policy or a supplemental food insurance coverage policy.
Understand the Best Coverage by Region
Many different factors affect how much your condo insurance premiums will be. Your location, the age of the structure, and its vulnerability to natural disasters, for example, all play into how high (or low) of a premium your insurance company will offer.
If your condominium is located in an area frequently affected by natural disasters, you can expect your insurance premiums to be higher. In fact, if you live in Florida, Texas, or Louisiana, you can expect to pay some of the highest premiums in the country.
If you would like to do more research how your region will affect your coverage, the National Association of Insurance Commissioner’s (NAIC) latest homeowners insurance report provides the most recently validated data on market distribution and average cost by policy form and amount of insurance.
When looking for condo insurance, it will be in your best interest to receive quotes from several different insurance companies. State Farm, Travelers, Liberty Mutual, Geico, and Progressive are of course some of the bigger and more well-known insurance companies that offer condo coverage. However, it might serve your interests to conduct a quick search of the Better Business Bureau to find a highly rated insurance company local to your area.
The National Association of Insurance Commissioners also recently published a comprehensive list of the “Property and Casualty Insurance Industry 2015 Top 25 Groups and Companies by Countrywide Premium.” This study can be helpful in guiding your decision on which company to trust with your insurance coverage.
Once you have quotes from several different companies, assess the coverage offered by the policy compared to price and the deductible. When you’re armed with quotes and policy coverage plans from other companies, you can use those policies as a tool to perhaps receive more coverage for a lower cost from a company’s competitor, saving you money on insurance in the long run.
Do Your Homework
Finding the right policy for your condo can be a time-consuming and frustrating task, but doing the research and making sure you have enough (but not too much) coverage will save you a lot of money down the line.
Remember always to request a copy of the master policy so you can see what is and is not covered by your HOA. Research whether or not you need flood insurance, and always compare quotes from multiple companies before settling on a policy.
Credit to Louis Conrad
Louis Conrad is currently the Co-Owner of Surge Homes, a company that develops land, builds houses and condominiums, and offers real estate sales and marketing services for all of its communities in and around Houston, TX.
What IS a Home Inspection?
A home inspection is an inspection of the major systems and physical attributes of a property. Think furnace, AC, plumbing, electrical, roof, basement. The inspector comes into the home and sets up any testing like radon or mold. Then the inspector goes around the house looking at everything.
Each inspector has their own system and typically works from a checklist. They take a ton of pictures as they go through the house and make notes for their report.
They look at the age of each mechanical and also test to see if it is in working order. (Testing AC units when there is a low exterior temperature can cause system failure, so if your inspection is taking place in January in Colorado, that’s not a system that will be tested.)
They’ll turn the furnace way up to see how easily it turns on. Inspectors check the status of the unit — clean, dusty, not working at all — and include a note about all of this in their report, along with a basic life expectancy.
Example: Furnace is 9 years old. Average life expectancy for a furnace is 20-25 years. It was in working order when tested. Verify service history with seller.
If the inspector finds damaged or missing items, they will note those, too. The image below was taken directly from the inspection report for my most recent sale.
The missing item is not a big deal — it certainly doesn’t affect the unit, and it’s an easy fix.
What a Home Inspection is NOT
A home inspection will not guarantee that the systems are going to last for X years. It is entirely feasible to have a home inspection today and have every system stop working tomorrow. It’s not likely, but it could happen. The home inspection is a snapshot of the home at that particular time.
A home inspection will also not give you any information about the legal status of the home — they don’t cover title work or get into liens or permits.
Make the Most of Your Inspection
Be there. Physically be at the home during the inspection if at all possible. Get there right on time, and walk around the home with the inspector so they can show you everything they are seeing.
If you have small children, this is an ideal time for a babysitter. If you can’t find someone to watch them at your home, at the very least have someone watch them where the home inspection is taking place. You need to be able to focus as much as possible on the home inspector and what they are saying.
Ask questions! This is the only time the home inspector is going to be in the house. Trust me, it is FAR better to pepper him with questions about the property than to leave something unanswered. You are paying for this inspection — so ask any question you want, and keep asking until you completely understand the answer.
Do I Really Need an Inspection?
Here’s my Home Inspection Rule of Thumb.
If you’re asking if you need one, you need one.
It doesn’t make you a bad person. I get home inspections for every property I buy. It makes me feel more comfortable about the whole purchase. Even though I’ve been investing since before dirt was invented, I still want to know what I’m getting into.
A few years ago, I was looking at a townhouse in an awesome area. Newly rehabbed, I wasn’t expecting anything to be wrong with it, but I still wanted a home inspection. As we were outside finishing up, the inspector casually mentioned that the exterior was not stucco, but something called EIFS — Exterior Insulation Finishing System.
Hmm, what’s EIFS? Thankfully Google existed even back then, and a quick search told me I wanted no part of any property covered in EIFS. When installed correctly, it looks like beautiful stucco at a fraction of the price. When installed incorrectly, water gets trapped behind the product and can cause massive mold damage — to the point that the property becomes uninhabitable.
I didn’t stick around long enough to deal with that. Mold isn’t my thing, and the property wasn’t enough of a steal for me to figure that out.
Another thing was that exterior issues in a townhome or condo become the responsibility of the association. And anyone who has ever tried to deal with an association knows what a difficult task that can be. So, I walked. And I was happy to spend that $400 to discover that issue. Maybe “happy” isn’t the right word — but certainly not mad about it.
Pre-Inspected ISN’T a Good Thing
I’m on the MLS all the time. I’m either looking for properties for clients or myself or doing research into prices in a certain area.
I look at a LOT of listings, and something that pops up frequently is “Home is pre-inspected and comes with a brand name home warranty!”
This makes it SOUND like a good thing, but is it really? Who did that home inspection? You weren’t there to ask the inspector questions. You don’t know what he did or did not look at. You don’t know how long the inspector was in the property.
A home inspection lasts a LONG time. Multiple hours. You don’t know if the guy came through on a scooter and spent nine minutes in the house or if he got up on a ladder and inspected every single thing with a fine toothed comb. Pro tip: Pre-inspected homes aren’t gone over with a fine toothed comb.
Cheaper isn’t always better. In fact, most of the time it’s NOT better at all. Do you think the seller spent top dollar on a home inspection to provide to potential buyers? Probably not.
Do your own due diligence. This includes a home inspection. Trust but verify.
It’s Brand New — Do I Still Need One?
There is a difference between a home inspection and a building inspection. The building inspection is what you get when you are constructing a home to make sure the home meets current building codes. A home inspection is what you get when you are buying a home.
My dad bought a home once. Actually, I grew up a corporate brat — similar to a military brat, but he was on the corporate track rather than in the military. Corporate brats still get to move around a lot, though. Three schools in second grade, and all of the sudden I’m no longer shy. We moved on average every three years. I’ve never lived in a home for more than five years.
So my dad bought this house, and since it was brand new, he didn’t get a home inspection. Once we moved in, we discovered there was no attic access. No soffit vents, no attic vents, and the basement flooded every time it rained. My parents no longer have a wedding album.
When it was time to sell, it was no longer brand new, and the people who were buying it from us DID get a home inspection. Even though we lived there for eight years, that home inspection discovered that the fireplace — you know, that giant stack of HEAVY bricks and mortar on the side of the house — had no additional support underneath it, and it had started to sink. Pro tip: That’s not a cheap fix.
Home Inspections Are So Expensive — I Know What I’m Doing
Not everyone needs a home inspection. If you are an inspector, go ahead and do it yourself. If you’ve done 500 deals, you might not need one, either. If the property is a 100 percent teardown, you can probably skip it then, too.
But to forego an inspection simply because it is too expensive is the wrong reason to skip it. And the “wasted” $500, $800, $1,000 can actually save you tens of thousands in unexpected issues.
You can almost bet that your end buyer is going to get a home inspection.
Check for permitted rehabs. If the property you are buying is recently rehabbed or has been rehabbed since it was built — think built in the ’60s but looks like the ’80s — check with the city to make sure all the permits were pulled, inspected and completed. This isn’t covered in a property inspection, so you should do it yourself.
My current home was purchased through foreclosure. It had an original house and a large addition. I’ve been investing since before dirt was invented, but I didn’t think to check on permits. Guess what happened? We applied for a permit to build over the existing large first-level addition and were told that the addition didn’t exist. Uh-oh.
The illegal addition didn’t meet current setbacks, but my city is gracious enough to grandfather in existing structures as long as they meet current code.
An inspector came out and checked the foundation, which I had to dig up by hand. (Jealous?)
It turns out that even though the addition wasn’t permitted, it was still OK. We had to do some monkey business around the foundation for freeze/thaw issues, but we didn’t have to tear the whole thing down.
I have heard of people with unpermitted basements who had to rip out several parts of the drywall and ceiling to have the electric and plumbing inspected. If you’re unsure, a quick call or stop into the permit office can tell you an awful lot about your property.
How Do I Find A Good Home Inspector?
I’m hoping you have a good real estate agent who can give a great recommendation, but even that isn’t always the best way to find a good inspector.
Get recommendations from several different people — the forums or a local meetup is a great place to start networking with people. Other investors don’t have any skin in the game, so it makes no difference to them if you close on the house — or if you choose to walk away from it due to inspection issues. They’ll be more inclined to refer you to a great inspector.
A home inspection isn’t cheap, and it isn’t a guarantee. But skipping it — and finding huge issues after you’ve bought the home — can cost you so much more.
Do yourself a favor and get a good, quality home inspection
Credit to Mindy Jensen
Mindy has flipped numerous homes in the past 10 years, one at a time and doing much of the work with her husband. She lives in Longmont, CO, and is always looking for an ugly duckling to turn into a swan.
First-time home buyers aren’t typically versed in the intricacies of agency disclosure, nor do they understand the concepts of a buyer’s agent and seller’s agent. They only know that the person they meet at an open house or email about a listing is an “agent.”
When they start getting more serious and want to inquire about a property, its price, condition or history, they typically direct their questions to the seller’s agent — which presents an immediate conflict of interest.
So what’s a buyer to do? It helps to understand the concept of agency before this happens.
A real estate agent’s loyalties and responsibilities change depending on the transaction. Here’s a quick rundown of the different roles an agent can play in any one transaction.
The listing agent
The listing agent or seller’s agent works for the seller and represents their interests in the sale. The seller hires their agent, typically in writing, to market and sell their home.
The listing agent’s responsibility is to get the seller the highest amount of money in the shortest period. Their fiduciary goals and loyalty should be with the seller at all times.
The buyer’s agent
Purchasing a home can be emotionally draining, not to mention financially stressful. Many consumers seek independent counsel from a buyer’s agent.
A buyer’s agent works with them for as long as it takes to make a purchase. They teach the buyers the market, show them lots of homes, and eventually advise when it comes time to make an offer and negotiate with the seller. An invaluable resource, a buyer’s agent stands by the buyer’s side for the duration of their home search.
The dual agent
Sometimes a buyer forgoes independent representation and chooses to work directly with the listing agent. This situation isn’t allowed in some states because of the conflict of interest. Where it is allowed, a dual agent represents both sides of the transaction at the same time.
In the case of a dual agent, it’s impossible for the agent to be completely loyal to either party. Both parties must agree to dual agency in writing, in advance.
Who pays for the agent?
The seller pays the real estate agent’s commission when the deal closes. The two agents then split the commission. In the case of the dual agent, the agent takes home the entire commission.
Should you use the listing agent as a dual agent?
Unless you are an experienced real estate investor, it’s best to stick with a buyer’s agent. There’s no cost, and a good buyer’s agent will provide an invaluable amount of advice and support in what can end up being a very stressful period.
The home search can involve many twists and turns, so having a loyal adviser along the way will help you make an informed decision on what is likely the largest purchase of your life.
Brendon DeSimone is a nationally recognized real estate expert and author of the book, Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling. A fifteen year veteran of the residential real estate industry, Brendon has completed hundreds of transactions totaling more than $250M. His expert advice is often sought out by reporters and journalists, and he is regularly quoted in local and national press. Brendon is a regularly featured guest on major television networks and programs including CNBC, FOX News, Bloomberg, Good Morning America, ABC’s 20/20 and HGTV. Brendon is the manager of the Bedford and Pound Ridge Offices of Houlihan Lawrence, the leading real estate brokerage north of New York City.