Traditional vinyl siding, long the go-to material for home builders, is increasingly being snubbed in favor of trendier manufactured stone products that may or may not contain any actual stone. The appeal of faux stone to builders and home owners is easy to understand: Fabricated stone or stone veneer exteriors are lighter weight and less expensive than natural stone and are offered in a wide array of colors and styles. Manufacturers have reported double-digit sales increases in recent years. But home inspectors are sounding off about the need for caution: Reports of water damage due to poor installation techniques have become widespread.
Home inspector Scott Patterson with Trace Inspections in Nashville, Tenn., says that in nine out of 10 homes he inspects with stone veneer siding, the product has been applied incorrectly. And home owners are reporting that water seepage behind the siding is leading to rotting walls and mold problems. Sometimes the problems don’t become evident for years after installation.
These damage reports related to manufactured stone sound eerily similar to those from the 1990s when synthetic stucco (also known as exterior insulation finish systems or EIFS) generated a lot of public attention. Like artificial stone, synthetic stucco was initially touted as a more affordable, versatile alternative to the genuine product. EIFS were also more crack-resistant than traditional stucco. Years later, home owners discovered water penetrating small openings around windows and doors, leading to costly repairs. Home owners filed lawsuits against manufacturers, and class action settlements resulted in affected home owners receiving generous payouts.
3 Ways to Protect Home Exteriors
Most siding materials require little to no upkeep. Brick, engineered wood, stone (both natural and manufactured), and fiber cement are thought to last for the life of a home, according to a report released by the National Association of Home Builders and Bank of America, “Study of Life Expectancy of Home Components.” But Frank Lesh, executive director of the American Society of Home Inspectors, offers some pointers you can share with home owners to help them protect their siding from damage, including:
Keep foliage away. Make sure no plants are growing on the siding. “Plants can trap moisture and allow insects and animals to infiltrate,” Lesh says. “You want the siding to be exposed to the elements.”
Watch where water may be getting in. Check areas around windows and doors to see if water is getting in. Moisture can linger and eventually cause rotting or fungal growth. Make sure those areas have been properly caulked or tuckpointed to prevent seepage.
Keep the gutters cleaned. Many home owners think they only need to check for clogged gutters in autumn when leaves are falling. A neighbor’s stray tennis ball, a bird’s nest, or even squirrels stocking up for winter can quickly become a serious problem. If water gets backed up in your gutter, it could damage your siding too, Lesh notes. Have gutters checked at least twice a year. Or better yet, clean them four times a year to prevent back-ups.
To avoid a case of history repeating itself, the American Society of Home Inspectors has urged members to become familiar with manufactured stone siding and to inspect it vigilantly for budding problems given its porous nature compared to actual stone. ASHI has offered seminars about how to spot problems resulting from improper installation. Home inspectors nationwide are also posting articles on their websites warning home owners to have their manufactured stone inspected.
That said, not all homes with these exteriors are doomed, says Frank Lesh, executive director at ASHI. Home owners typically experience no problems when faux stone is installed correctly and appreciate it as an affordable, lightweight alternative to natural stone exteriors. The artificial product, running about $3 to $8 per square foot before installation, is one-third to one-half the cost of genuine stone, though still about double the cost of vinyl siding. “It’s a durable, long-lasting product, but there are still things to watch out for,” says Lesh. “It has to be installed the correct way, and among subcontractors—of even some big builders—unfortunately this isn’t always the case.”
Consumers purchasing a home featuring manufactured stone veneer might consider hiring a home inspector with specialized training. Real estate pros can direct clients to ASHI’s homeinspector.org website and recommend that they search for inspectors who list an expertise in these materials in their profiles.
So how do home owners know if they have a problem? There may be visible signs; Patterson recalls one recent incident where home owners noticed the trim boards inside their home were starting to separate and found a slight discoloration on a section of their hardwood flooring. Patterson discovered the exterior’s artificial stone was not installed with sealants or the needed backer rods around a huge window frame, which led to water pouring into the walls and eventually damaging the interior wall.
Another test for potential problems is to simply tap on the stone to see if anything feels loose. “If there’s water behind it, the glue starts to come off and you may get some movement,” Lesh says. Also, look for water damage around the siding. However, inspectors warn that the problems are often hidden behind the stonework and difficult to detect until the damage has become extensive.
That’s where specialized equipment can come in handy. Patterson uses a moisture meter and an infrared camera if he suspects a problem. He also looks to make sure the artificial stone comes up to the window or door frame, with only about a half-inch buffer between the two. That space should be filled with a foam rod and a flexible sealant that seals the entire area on top. He also checks to make sure the artificial stone isn’t buried underground. There should be about six inches between the ground and the base of the stone to prevent water from seeping in.
If damage is found, recommend that your clients consider hiring a structural engineer to complete a more invasive moisture testing procedure to learn the extent of the damage to the walls behind the stonework. Many of the same contractors who fixed EIFS in the 1990s and early 2000s are working on repairing stone veneers too. Home owners may find that builders can help resolve an installation issue as well.
Repairing the damage is no small job. The cost of replacing improperly installed manufactured stone runs from about $30 to $38 per square foot of wall. And that doesn’t include repairing any damaged landscape or the replacement of the product itself.
Meanwhile, home owners’ interest in manufactured stone veneer remains strong. The vast selection of colors and textures are a draw, and when it’s installed correctly, home owners find it worth every penny. Indeed, Remodeling magazine’s 2016 Cost vs. Value Report highlighted manufactured stone veneer as having the second highest ROI out of 27 home projects, with nearly 93 percent of the cost recouped at resale. (Only attic insulation, with an ROI of nearly 117 percent, came in higher.) But don’t leave any stone unturned when doing research about the benefits and pitfalls of this emerging product category.
Cerdit to Melissa Dittmann Tracey
Contributing Editor
Melissa Dittmann Tracey is a contributing editor for REALTOR® magazine.
There are four factors that all renters consider before signing or renewing a lease; Location, Price, Condition, and You. That’s right, I said you!
Since you can’t change the location but still obviously want to command a higher price, you have to provide incentives that improve the condition, convenience, or the level of customer service.
If the location and property condition are not ideal, and you’re not willing to do anything about it, you’ll then have to provide financial incentives to spark interest. Realistically, most people would live almost anywhere, and in less-than-favorable conditions, if the rent were low enough.
Types of Incentives
…No one should get a prize for doing what is expected of them in the lease.
Whether you are trying to convince an applicant to sign a lease, or encourage a great renter to renew, incentives act as the carrot at the end of the proverbial stick.
With that said, I believe that no one should get a prize for doing the bare minimum or fulfilling what is expected of them in the lease.
1. Early Payment Discount
I believe that a landlord should never discount the rent if a renter pays it on-time – which usually means the absolutely last possible day. However, a small discount might be in order if the renter pays rent 10, or even 15 days early.
2. Rent Decrease
Rent decreases are a great way to convince excellent renters to sign another long-term lease. For this to be profitable, you really need to run the numbers. A $50 discount for 12 months would cost $600/year. Considering vacancy and upkeep, you must ask yourself “will keeping these renters for another year save me $600?”
3. Property Upgrades
Benefiting both the landlord and renter, anything that is a permanent change to the dwelling would be considered an upgrade. Renters who view the property as their “home”, will often ask for an upgrade.
If an appliance is near the end of its life, I’ll usually entertain the request – especially if it gets the renter to renew. Other simple upgrades can include painting, new carpet, additional parking, or even a bathroom/kitchen remodel.
4. Flexible Lease Terms
Sometimes, the ability to break a lease with 30 day notice, or the approval to have pets, is valuable to a renter. Again, you have to weigh the risk vs. reward, but sometimes it’s worth it.
Further, allowing other flexible terms, such as the ability to sublet, will entice a new renter or keep a current one. Student renters often travel home for the summer and want the ability to sublet their room.
5. Online Rent Payments
For many people, their rent payment is the only check they write all month. They would jump at the opportunity to pay their rent online, and finally ditch their checkbook. This added convenience can make a huge difference when marketing to new renters and instantly makes your property more appealing.
Every time I tell a potential applicant that they can pay their rent online, they get really excited. It’s obvious that they are tired of writing rent checks. It’s no secret that I use Cozy to self-manage all my properties, and my tenants love it. I haven’t had a single late payment since switching to online rent collection with Cozy.
6. First Month Free
Larger apartment complexes have the additional cash flow to cushion a free month worth of rent. However, often times, the 11 other months are increased by 1/11th the price to make up for it. Without realizing it, this incentive allows a renter to spread the first month’s payment over the term or the lease, but gives the impression that they are getting something for free. For better or worse, this incentive appeals to renters with little or no cash liquidity.
7. Zero or Partial Security Deposit
Waiving the deposit requirement is popular with large apartment complexes as a means to reduce vacancies, but it’s not feasible for an independent landlord. A landlord needs the deposit as security against unpaid rent and physical damages to the unit. Without it, the landlord has no leverage or protection.
Alternatively, spreading the deposit payments over the first three months will lighten the financial blow to the renter who often cannot afford to pay for first month’s rent and the deposit at the same time. However, it might not be wise to rent to someone who can’t pay the deposit in full.
8. Anything They Want (within reason)
Last but not least, perhaps it’s best to let the renter request the incentive. You just never know what they are thinking. For example, if they don’t have transportation, perhaps you could let them borrow your bike for the year. Or, maybe providing a partially furnished unit, or an early move-in date, would convince them to sign a lease.
At the end of the day, every landlord needs to market creatively to attract the best possible renters, and to keep the ones who care for the property and pay rent on time.
Many times, it’s the incentives that provide the extra push needed to seal the deal.
Credit to Lucas Hall
Lucas is the Chief Landlordologist at Cozy. He has been a successful landlord for over 10 years, with dozens of happy tenants and a profitable income property portfolio.
Solar power is a booming industry in the United States. Photovoltaic (PV) solar panels are still expensive, trends in production efficiency and cost of materials point to a continued drop in the price of PV units that could make the technology accessible to middle-class incomes within a decade.
9 Crucial Steps to Prepare For Solar Power
Whether you’re chomping at the bit to add some solar units to your roof or simply investigating the scope of the process, there’s plenty to be done in preparation for the shift to solar. Here are 9 crucial steps to prepare for solar power at your home.
Step 1: Consider Your Options
Solar energy is rising in popularity as prices continue to drop, leading to greater competition among solar contractors, installers, and manufacturers alike. Because of this, there have never been more opportunities available to consumers when it comes to solar energy.
The list of solar panel manufacturers continues to grow as parts and materials become cheaper, but speaking with a solar energy contractor about the specific goals for your solar energy plan can help determine the scope and costs of your project going forward.
Because you’ll need help from building inspectors and the power company in your community, it is advised that you consult with your local resources and find a solar installer that has experience in permitting and project management to ensure the process goes smoothly. Homeowners looking to implement solar power should order a cost/benefit analysis survey from a certified solar installer. This survey will identify roof slope, property orientation, shading, optimal placement sites, power distribution and storage (if applicable), and finally, aesthetic considerations.
Step 2: Find Rebates and Incentives
Depending on your geographic location, your local public works department or utility company may offer impressive rebates on the purchase costs or installation of solar panels on your property. A full list is available here, complete with breakdowns of individual solar energy rebate programs by state.
In some instances, such as in Texas, some utility companies will pay as much as 45% of the initial cost of installation – a huge motivating factor for homeowners, especially taking into account the additional 30% write-off at the end of tax season.
Step 3: Secure Financing
Under the Consolidated Appropriations Act of December 2015, the federal government will provide a 30% tax credit to homeowners for qualified expenditures toward a PV system. In order to secure the full credit, systems must be placed into service by 12/31/2019. The same rebates are available to businesses operating within the United States.
The U.S. Department of Energy, the U.S. Small Business Administration, and various other federal agencies offer loan programs for both homeowners and businesses seeking to invest in solar power. Compared to a conventional mortgage or residential energy efficiency improvement loan from Fannie Mae or Freddie Mac, securing a loan for energy improvements through the SBA can more than double the maximum loan amount available – up to $750,000.
As far as the costs of the panels themselves, the average cost per watt generated reached less than $0.74 in 2013, but in areas such as Massachusetts, Louisiana, and California, the payback period (or the return on investment) is fewer than 10 years.
Step 4: Make the Necessary Repairs and Upgrades
In order to prepare your property for solar panel installation, you’ll need to consult with a building inspector to ensure your roof is structurally sound and capable of housing heavy solar arrays.
Due to the weight and surface area utilized when installing solar arrays on a residential rooftop, it’s important to first check the condition of your roofing materials before committing to a solar solution. Because any repairs made to the roof after installation will require complete removal of the solar panels, it’s wise to order roofing repairs or replacement in advance of adopting solar energy systems into your home’s energy profile. While these upgrades may not be as invasive as an indoor home remodel project, the scope and technical nature of the project may require additional prep work before contractors can get started.
Most PV panels are mounted on south-facing roofs, but roofs with east-west orientations or flat-roofs are acceptable, as installers can position the arrays at optimal angles to maximize exposure to sunlight.
In preparation for installation, consider building a separate utility nook or storage cabinet to house a battery, electrical inverters, and Balance of System (BOS) equipment to integrate the solar modules for use with the home’s existing electrical system. Because solar energy is becoming increasingly affordable, more and more companies are expected to enter the market, bringing new and exciting products and solutions for energy-conscious homeowners. The frontrunner in this department is Tesla’s Powerwall, which will provide 6.4 kWh of home energy storage capacity when consumer models ship in 2017. Designed for use with solar panels, the Powerwall allows homeowners to actively capture solar energy for later use or sell the excess energy back to the grid.
Step 5: Permitting and Rebate Process
Most city utility companies require the following documentation before installation can begin:
Level 1 Interconnection Application and Agreement for inverter-based generating systems
Electrical diagram of proposed generating system
Specifications of inverter
Application for electrical service (required for use with meters and various state/local production incentive programs)
A qualified solar installer or contractor should have these documents prepared or available to you upon request.
Furthermore, the solar contractor must obtain an electrical permit prior to installation. Your local building or planning department will require an electrical inspection before replacing your old meter with a reverse-power meter.
After installing and implementing a solar energy solution in your home, you should be eligible to receive as much as a 30% credit on your federal income tax bill. Through December 2016, homeowners who invest in an energy efficiency solution will be able to complete IRS Form 5695 – Residential Energy Credits. According to the instructions for the form, qualified applications of the tax credit are for costs related to the following:
“Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home does not have to be your main home.”
Your state and local governments, utility companies, and energy efficiency coalitions may offer additional grants, credits, and rebates toward the adoption of solar power in your home. For a complete list of the possible benefits, check the Database of State Incentives for Renewables and Efficiency.
If you plan to help offset the cost of your solar energy system by selling excess generated power back to the grid, you’ll need a production meter installed and configured by your local electric company.
A production meter measures the amount of electricity generated by an energy source, operating essentially opposite of your standard utility metering system. Production meters connect to your system via the AC disconnect on your solar inverter before passing through the main interconnection breaker on your property.
Utility companies commonly read production meters at the same rate by which they monitor standard meters, sending the homeowner an annual report with information pertaining to the kilowatt-hours produced by your solar energy system. Using that data, you’ll need to complete a yearly application for compensation for excess energy your system provided for the grid. Incentives arrive either in the form of service credits or check by mail.
Among the first consumer-grade electrical storage system was Tesla Motor’s Powerwall, which actively captures and stores solar-generated energy for backup use or daily electrical needs. While other companies are following suit and producing low-cost, high-capacity batteries for solar-powered buildings, Tesla is considered the leader in the still gestating industry. The company estimates each unit will perform at 92% round-trip DC efficiency and initial models will store 7 kWh (about 1/3 the average daily energy used per American household as of 2014). Because residential electrical systems operate on AC power, a converter will be necessary in order to utilize the energy stored by the Powerwall.
Step 7: Finalize Power Efficiency Solutions
As with most energy-efficiency upgrades, adding solar power to your home will only work to maximum efficiency if other aspects of your home are working in concert with your new system.
Some low-impact, DIY projects to put on your list:
Check each door and window for broken or cracked seals.
Add a layer of protective window film to further improve energy efficiency indoors.
Replace your old bulbs with high-efficiency CFL or LEDs.
Install energy-saving smart thermostats.
Order a rain barrel to collect excess rainwater for later use.
Replace air filters in air conditioning and heating systems, vents, and appliances.
Invest in energy-smart power strips and timers for electronics.
Add additional insulation to problem or leaky rooms.
Check your roof and attic for leaks or install ventilation systems to prevent capturing hot air.
Once again, a home energy audit from an energy-efficiency professional will be the best way to analyze and assess the strengths and weaknesses in your home’s energy efficiency standards.
Step 8: Installation and Implementation
Before installation, your solar energy contractor will assess the following:
Viability of available solar resources.
Size of system necessary to meet your home’s average electrical requirements.
Ideal placement of control system and electrical infrastructure
Potential for connection to grid or potential for off-the-grid use.
Safety and reliability standards.
While it’s not unheard of homeowners installing solar electric systems on their own, it’s highly recommended (and sometimes, depending on your location and system of choice, required) that you hire a professional solar installer to oversee the entire project.
When choosing a contractor for your solar power system, consider the following:
Request separate bids for roof-mounted systems and ground-installed PV solutions.
Inquire as to the level of experience of the contractor in question. How many solar energy systems have they installed? How often?
Ask for proof of certification or licensing. Your state’s licensing board should have information regarding each licensed contractor in the industry.
Check for disciplinary actions or pending complaints against the contractor. The Better Business Bureau and your city government should have information regarding any pending liens or judgments against a company.
Ask for energy/cost estimates based on the solar resource of each prospective installation site, size/scale of the system, type of PV panels intended for use, and the current conditions of your home’s existing energy efficiency solutions.
Unless your solar electric solution is part of a new, energy-efficient home construction project, chances are you’ll also need a licensed electrician to install and verify a few secondary but critical aspects of your new energy system. Both stand-alone and grid-connected solar energy systems require power conditioning equipment that must be implemented within your home alongside your new PV panels and batteries. For reasons that should be clear, it’s never a good idea to leave electrical work to a handyman or a DIY project. The current requirements for grid-interactive power inverters, known as UL 1741, should serve as a reference point for solar contractors moving forward.
Safety Considerations
Every electrical system is at risk of failure, damage, and deadly surges that must be addressed on a system-by-system basis. According to the National Fire Protection Association and its updated National Electrical Code, renewable solar energy systems should implement the following to ensure safe and continued operation:
Safety disconnects to protect internal system wiring, allow for safe repairs, and ensure isolation from the grid.
Grounding equipment that provides a safe, low-resistance path for errand surges, lightning strikes, and equipment malfunctions to discharge into the ground.
Surge protection equipment to protect electrical gear against lightning strikes and electrical storms.
Step 9: Testing and Analysis
There are several ways to evaluate the efficacy and reliability of your system. First, built-in meters and instruments on your solar control or energy monitoring panels should provide enough information about energy usage, current storage levels, rate of energy generation, and amount of converted energy to date.
Some solar energy systems provide connectivity to third-party smartphone monitoring apps and provide better visual representations of data collected within your home over longer periods of time. Other gadgets such as Nest work seamlessly with modern energy systems, helping to better use and conserve energy, reducing the amount of maintenance required by the homeowner in order to reach maximum efficiency.
Finally, in order to fully understand and appreciate the effectiveness of your solar energy system, you’ll want to keep your old utility bills from the previous year and measure year-to-year comparisons once you’ve had your system operational for a full year. Ordering a home energy audit after installation of your solar energy system will also provide valuable feedback on methods to further improve your home’s efficiency capabilities headed into the next several decades.
The benefits of solar power are clear and costs continue to fall. Is your home prepared for the future of energy? Find a solar installer in your area by visiting the North American Board of Certified Energy Practitioners and begin your journey to true energy independence today.
A Long Term Investment
One final note — choosing solar power for your home is a long term investment. Review.com, a website dedicated to conducting unbiased and in-depth research about products and services, spent six weeks researching 188 contenders, consulting engineers and solar energy experts, and scouring user reviews and publications. They analyzed and compared the following;
Watts of power
Efficiency ratings
Customer service
Age of the companies
Ultimately, their research culminated in the recommendation of five solar panel companies. In addition to those recommendations there is also a tremendous amount of information to soak up.
Credit to Drew Hendricks
Drew Hendricks is a tech, social media, and environmental addict. He’s written for many major publications, such as Forbes and Entrepreneur.
If you have ever been in a situation where you felt confident about getting all of your security deposit back, only to find that you were charged for areas you never even considered checking, this checklist is for you.
The coveted return of the security deposit, at the end of tenancy, can feel elusive to some renters. In fact, according to a Rent.com survey, 1 in 4 renters have not gotten their security deposit back when they expected to. The security deposit is not something that should leave your mind as soon as it’s paid, only to come back around at the end of your lease.
In most cases, a landlord will want to return the full security deposit back to you, because that means there was no damage or extra cleaning that needed to be done to the property. Be sure to be aware of the lease agreement throughout your tenancy, and be active about making sure you’ll get your deposit back. Ensuring that your security deposit is returned can require day-to-day tending to during your time as a tenant.
Follow Rental Agreement: Not all security deposit charges are due to direct abuse of property. Your landlord can charge for any work required to make the property look like it did before the start of tenancy. Additionally, a rental lease will include terms to further prevent property alterations and unauthorized changes to your rental.
Even if you consider a change, like a new paint job or new window treatments, upgrades, your landlord might disagree. If you do not have formal permission from your landlord, you could be charged for the living room’s new paint job, or the hole created to install that new curtain rod you put in.
Other lease-breaking damage charges can be caused due simply to negligence throughout your residence on the property. If you failed to change the air filter in the central air system, causing damage, or you didn’t keep the property clean—thus encouraging bugs, you could face a truncated return at the end of your lease.
Deep Clean Before Leaving: Even if you factiously clean your rental, there are always problem areas that are left in the dust. Places like baseboards, the tops of cupboards, and under the entertainment center are rarely examined on a daily basis—and even more rarely cleaned.
Furthermore, high traffic areas can start to look dingy and dirty after a few years. Deep clean and pull out all the stops—use a steam mop, get on your hands-and-knees, and use that elbow grease to make your rental shine! Ensuring that your landlord won’t have to pay a professional cleaner because of a mess you leave behind, is a surefire way to increase your deposit return.
Alternatively, consider hiring your own cleaning service before moving. You will probably find a better rate if you contract a professional house cleaner, than if you leave it up to your landlord to find one with your security deposit fees. If you hate cleaning, or don’t feel like spending time scrubbing the floors during the moving chaos this may be the best option for you.
Touch Up Minor Damage: If you have areas with small holes in the wall from nails or screws, touch them up so your landlord does not need to. A landlord faced with minor damages, will also need to consider the time spent repairing them, save yourself the cash (and your landlord the hassle) by making it a non-issue from the start. Apply this same attentiveness to falling or lose hinges on the cupboards, or any other areas that might have small repairs that could be done. Consider this trick from Nestment, about re-caulking your bathroom to instantly make the shower look new again.
Finally, if you do find that you did not receive your deposit back, or only received a portion of the original amount knowing your rights as a renter can help you find out why you were charged. In most states, it is a requirement that the landlord inform their tenant in writing of the charges to your security deposit. If you live in a state that requires it, this required written document can help you learn what damages you need to avoid for the next time you rent, or can ensure that you were not charged for an issue that you shouldn’t have been.
Credit to Brentnie
Brentnie is a contributor for Rentec Direct. She occasionally stops by to deliver practical industry tips, providing guidance for tenants and landlords alike.
When looking for a home to buy, it pays to be aware of common problems found in many homes. Once you make the purchase, you take over responsibility for all of the existing issues in the home. Keep an eye out for these issues so you can adjust your offer accordingly, or move on to another property that is relatively problem-free.
If you are a perspective home seller reading this please make mental note of these common home sale issues so you can be well prepared to identify and address them before you put your home up for sale. You will be glad you did!
1. Roof Problems
The roof is one of the most important components of the home. A damaged or poorly maintained roof can lead to serious problems, including water damage. Major roof repairs can be expensive, and should definitely be factored into the price of the home if they exist. The roof is an area that most buyers will not compromise on. Keep in mind however that when you have a home inspection and your inspector tells you that there are only a few years of expected life in the roof, you shouldn’t expect the seller to replace it. Most sellers are not going to replace a roof when there are years of life left before issues arise.
2. Old Appliances
Appliances are built to last only so long, especially if they are not regularly maintained. The cost of replacing appliances can be substantial and should be considered. Granted, higher quality appliances last longer. It is worthwhile to do some research on the year, brand and model of the major appliances in a property to get a clear picture of what you are purchasing.
3. Handrails
This may seem minor, but functional handrails are necessary on staircases and along balconies for safety. Test all of the handrails in a home, and ensure that all appropriate areas have handrails before buying. One of the common trouble spots is on decks. This becomes especially important when the deck is elevated off of the ground where someone could get seriously hurt if falling from a greater height.
4. Storm Damage
Each area of the country experiences extreme weather – weather that can do serious damage to a home. From hurricanes to hail storms, these weather events can damage roofs, siding and even foundations in the event of flooding. Hail storms can be very destructive without a home owner even realizing it. A few years ago in Hopkinton Massachusetts, over a third of the homes in town received new roofs because of a vicious hail storm.
This is something that most good homeowners insurance policies will cover. Unfortunately there were also a number of people in Hopkinton who did not even think to check that they had hail damage. Upon selling their home, the buyer would get a home inspection and that’s when they found out they had damage. For many of these home sellers it was too late to file a claim. The tough part of hail damage is that it is not often visible to the naked eye. A good home inspector will be able to spot hail damage by getting up on the roof or possibly by using high-powered binoculars.
5. Rotten Wood
Even modern, pressure-treated wood will break down under the elements eventually. Look for rotten wood around the base of the home, along the roof and anywhere else where moisture may have been an issue. Some of the most common areas you will find wood rot on a home are on the window sills.
While rotted window sills can be found on any age home, there has been a prevalence of it in homes that were built in the 80’s and 90’s due to lesser-quality, finger-jointed woodwork. Finger-jointed materials, if not constantly painted, will rot a lot more quickly due to water penetration and just an overall lack of quality.
6. Cooling or Heating Systems
Temperature control systems wear out over time, and they can be expensive to replace. Check on the age, integrity and maintenance schedule of any heating or cooling system present in the home. Newer models are notably more efficient, making them a much better deal in the long run.
One of the most important things you can do as a home buyer is to check the current owners’ upkeep of these items. It is certainly possible a well-maintained boiler can last thirty years or more. It is just as easy for that same boiler to last half as long if not maintained yearly with regular servicing.
7. Environmental Issues
Environmental regulations become increasingly strict as time goes on. This is good for buyers of new homes, but it does not necessarily protect you if you are purchasing an older home. Radon, lead-based paint, mold and asbestos are all health concerns.
Be aware of the dangers of these materials and verify whether they are present in each property. If the home is serviced by a well (as opposed to public water), it is also a good idea to get that tested too. Often times standard well tests will only do a limited screening for such things as iron, copper, manganese, etc. You will want to make sure you also test for more dangerous compounds such as arsenic, mercury and lead.
8. Poor Drainage
Water damage is a risk in areas with poor drainage. Verify that each home you consider has adequate drainage to deal with area rainfall. Because water damage can lead to expensive repair work and mold infestation, you need to ensure that drainage is sufficient on any property you purchase. This is one issue as a home seller not to mess with. There is nothing that will kill a real estate sale quicker than a water issue. Buyers do not want to even think about having a water problem with their home.
9. Electrical Safety Concerns
Older homes may not have electrical systems up to current codes. Things like ground fault breaker outlets in bathrooms and kitchens, as well as grounded outlets throughout the house are necessary for a safe living environment, especially when you consider the current electrical load people put on their homes with new appliances and electronics. In older homes look out for knob and tube wiring.
Most lenders will not provide a loan and most insurance companies will not ensure a home with knob and tube wiring. Eliminating a huge chunk of the buyer pool is not going to help you get top dollar for your home. This is an issue you would want to address before listing your home for sale.
10. Roof Water Control
Gutters may seem like a minor part of a home, but they do a very important job in keeping your house free from water intrusion. Clogged or poorly maintained gutters can leave your home exposed to water and the mold that comes along with it. Sellers that have plants growing in their gutters bring negative attention to their homes. It looks like you could care less about the upkeep of your property and makes buyers look more closely at other potential problems.
11. Plumbing Problems
Plumbing may be hidden from site in homes, but it is a large part of what makes the modern home livable and comfortable. Older homes with older pipes can present problems, though. Make sure your potential home has plumbing that works, and no serious plumbing issues right around the corner. Things like tree root growth can quickly stop up your plumbing and may be a problem with older pipes.
12. Bad Insulation
Modern insulation is excellent at keeping the temperature in your home comfortable. However, some home builders, especially in older homes, did not always insulate adequately. If you view a home in summer, you may be surprised come winter when the house will just not hold heat. Have someone who knows verify that the home has good insulation before you buy. It is common for older homes to not have nearly the same energy efficiency due to lack of insulation in walls and sometimes in the attic as well.
13. Poor Ventilation
A home that does not allow airflow is at risk of developing mold problems, a nightmare for any homeowner. Verify that the home you are looking at allows airflow throughout the house, including the attic. It may be impossible to achieve perfect airflow in every room, especially basements, but the home should allow airflow through most rooms of the house.
One of the most notable home imperfections is a bathroom vent dumping into the attic and not out through the roof. While a bathroom being vented through the roof is now code in most states, this was not the case until recently. It is very common to see homes that have venting leading into the attic, creating the perfect environment for moisture and mold growth.
14. Foreclosed Homes
Foreclosures may initially present an excellent deal, but they also present certain risks. Sometimes earlier owners will do serious damage to such homes before exiting the property. This can include anything from stripping copper piping to tearing out cabinets or other valuable fixtures.
Always look over the property before getting your hopes up, because sometimes you do get what you pay for. When real estate deals seem to good to be true they usually are! Keep in mind when you purchase a foreclosed home the lender who now owns the home generally will know very little about the previous owners’ upkeep and maintenance.
The Help of Someone Who Knows
If these 14 things seem like a lot to keep track of, it is because they are. This is why the help of an experienced professional real estate agent can prove so valuable. They look for such things as a matter of course. However, if you choose to go it alone, make sure to download a home viewing checklist to make sure you cover all of your bases before making an offer.
These are all common items that can certainly be discovered at a home inspection by a qualified home inspector. As a buyer, you should be making mental notes of these items before hand so you can make an offer and budget accordingly. When you are mentally prepared for these types of issues when purchasing real estate, there will be a lot less stress involved with your transaction should one or more of these problems crop up. Don’t lose your cool when you find a problem. Take it slow and do the necessary research to resolve the problem by speaking with a few reputable contractors and getting necessary estimates for repair.
Credit to Bill Gassett
Bill Gassett is a nationally recognized real estate leader who has been helping people move in and out of the Metrowest Massachusetts area for the past twenty six plus years. He has been one of the top RE/MAX REALTORS® in New England for the past decade. In 2012 he was the #1 RE/MAX agent in all of New England.
Closing a real estate sale requires a big investment of your time and money. Whether expenses are business, personal, or something in between can be unclear — leading to missed deductions and overpayment of taxes.
This is key knowledge regardless of who’s doing your taxes. Understanding which expenses are allowed will help you deduct with confidence and avoid overpaying on your quarterly and year-end taxes, no matter where you are in your career.
1. Vehicle Mileage or Expense
You spend your days driving between properties and appointments. How do you determine whether to go with the standard mileage deduction or track all your auto-related expenses? If you drive 10,000 miles or more per year for your real estate business, you will most likely get the greatest tax benefit by taking the standard mileage deduction.
The IRS requires you to keep a detailed log in order to claim this deduction, which includes date, time, mileage and purpose of the trip. Mileage tracking apps can streamline this process, automatically capturing trip date, length, and time of day for easy categorization.
If you are a lower mileage driver, or have especially high car payments, the actual cost method may yield a higher deduction. The two methods can be compared in more detail in this article.
2. Marketing and Advertising
To be a success and scale their business in a predictable way, most real estate professionals invest heavily in marketing and advertising. Remember that you can deduct not only the direct cost of promotions such as business cards, flyers, signs, ads, and promos but also the production costs, such as writing and design fees, whether the materials are produced by an agency or part-time hire.
Digital and online advertising costs are quickly becoming the greatest area of spending. This includes website design and hosting fees, search engine marketing, pay per click advertising, video production, and any other IT-related costs. Be sure to track all these business expenses.
3. Home Office Deduction
Do you have a dedicated area of your home for work? If so, you’re eligible for a home office deduction even if you also have office space at your broker’s office — unless you’re deducting desk fees already (see more below). Like the vehicle deduction, the home office deduction offers an option: the regular method or a simplified method. Most self-employed people find that the simplified method maximizes their deduction. However, if you have a particularly large home office, or live in a very high-cost area, the regular method — in which you track actual expenses — may yield the highest deduction.
4. Desk Fees
Whether you are hanging your license under a national franchise or with an independent broker, your desk fees are deductible. Note, however, that if you are taking a deduction for brokerage desk fees, you will not be able to claim the home office deduction.
5. Office Supplies and Equipment
Regardless of which office deduction you take, you can claim other office-related expenses, such as stationery, photocopies, and any other consumables needed to run your business. Other large purchases that can be expensed in full – or depreciated over a number of years –include furniture, fax machines, copiers, computers, or you telephone and associated bill.
If you have a dedicated landline telephone for business, you can fully deduct this expense. Increasingly, agents are using a cell phone for both business and personal use. If you do, you are eligible to deduct only the business percentage of that expense.
6. Meals and Entertainment
There are two situations in which you can deduct meals as a business expense: when you are travelling on business and when you are dining with clients or with other professionals for the purpose of conducting business or generating referral business. In either case, you can deduct 50 percent of your total expense, which includes tax and tip for the meal. In the case of business entertainment, you are allowed to take the meal deduction only if business was discussed during the meal, or immediately before or after.
In the case of events that are provided to the general public, such as a well-advertised open house, you are able to deduct 100 percent of the cost of refreshments and food.
7. Fees, Licenses, Memberships and Insurance
Annual fees are a common costs of doing business and are deductible. In real estate, that means your state license renewal, professional memberships, and MLS dues. An important caveat with regard to professional memberships: The portion of your membership dues attributable to lobbying and political advocacy is not deductible. General business insurance and Errors and Omissions (E&O) insurance are both fully deductible business expenses. Additionally, you can deduct real estate taxes necessary for your business, but not self-employment taxes.
8. Professional Development and Travel
Given rapid industry change, continuing education is a great way to stay competitive. It’s also a requirement in most states. Many real estate professionals pursue professional development through classes, trade shows, conferences, or coaching. If you need to travel to attend an event or meet with a coach you may be able to deduct those transportation and/or accommodation costs.
9. Software and Business Tools
Any software needed to run your business is fully deductible – including lead generation subscription services such as customer-relationship management (CRM) software. Products such as QuickBooks Self-Employed not only help you automatically track your expenses and mileage, but may be fully deducted as well.
Credit to QuickBooks Self-Employed
QuickBooks Self-Employed helps real estate professionals like you keep more of what you earn. Categorize business expenses with a single swipe and let our mobile app track your mileage while you drive. When it’s time to file your taxes, QuickBooks Self-Employed integrates seamlessly with TurboTax and your accountant. With your business income and expenses in one place, you’ll always know where your business stands.
Just as real estate professionals are struggling to understand what defines advances in efficiency and smart-home technology, appraisers are also working to help define and quantify what this trend means for home sales now and in the near future.
Today, more and more homes are being built or retrofitted as “green” or “high-performance” properties. But what exactly qualifies a home as truly green, and how are these new features recognized in the marketplace? Real estate professionals, appraisers, and even some home owners are asking these questions, and The Appraisal Foundation is attempting to answer them as part of a five-year partnership with the U.S. Department of Energy.
What Exactly Is a Green Home?
Simply put, a green or high-performance home is one designed to use less energy or water or improve indoor air quality. However, just because a home has new windows or low-flow water features doesn’t make it automatically “green” or “high-performance.” Such descriptors are usually reserved for properties that have a combination of a wide variety of features.
The spectrum of energy-efficient characteristics a home may possess can make the appraisal process complicated. A number of rating and certification systems have emerged in recent years that can help identify these types of properties. However, ratings can’t catch everything; most residential properties currently have green or high-performance elements that haven’t been documented by such programs and therefore may be difficult to identify. This makes a real estate professional’s communication with an appraiser even more vital in such transactions.
For homes with green or high-performance features, appraisers need to answer more than just the simplistic question of whether they are green or high-performance homes. They want to understand the features that make it green or efficient. They also need to know how green the property is relative to what buyers in this particular marketplace are expecting.
This is why the actual terms “green” and “high performance” are not the most important concern. Instead, the appraiser’s job is to note the features a property has, understand how the market values those features, and determine whether those features have any particular relevance to their appraisal assignment.
How Do Appraisers Recognize These Features?
Appraisers might identify the high-performance features of a property through a wide variety of sources: the review of building plans and specifications, permits, MLS information, and interviews with property owners and occupants, among others. Appraisers may also observe green features first-hand when inspecting a property. They might also look at third-party sources, including ratings and certifications from Energy Star (administered by EPA), LEED (from the U.S. Green Building Council), and HERS (conveyed by Residential Energy Services Network professionals).
One major challenge for appraisers in this situation is the lack of verifiable data about energy efficiency. Although the fundamental appraisal process is no different for a green home, many MLSs and other data sources were designed a long time ago, before there was a way to convey accurate or complete information regarding a home’s energy-efficient features. However, because green homes have become more prominent in recent years, many MLSs are updating their systems to ensure this type of information is being captured and accurately reported. Appraisers all around the country are working with agents and brokers in an attempt to identify the type and extent of data that will help facilitate smooth transactions.
In the interim, this challenge for the appraiser may offer an excellent opportunity for the real estate professional. Providing crucial information about a property that might otherwise be unavailable to the appraiser may not only assist in facilitating the immediate transaction, but could also pay future dividends by helping to create more informed and knowledgeable appraisers and a more complete MLS database.
Does Green Mean Dollars?
While a home with photovoltaic solar electricity might be at the top of some buyers’ wish lists, others may not be quite as enamored. In some markets green homes are all the rage, while others may be quite tepid about such upgrades.
But that’s the way it is with many other home features, and it’s important that appraisers can recognize and account for them properly in order to develop credible opinions about value. At the end of the day, it’s the buyers and sellers who determine how much any particular feature contributes to a home’s value. For a successful transaction, it’s important that the appraiser and real estate professional are on the same page with consumers.
Credit to David S. Bunton
President of The Appraisal Foundation
Mr. Bunton has served as the senior staff member of The Appraisal Foundation since May of 1990. As President, he is the chief executive officer of the Foundation. Prior to joining The Appraisal Foundation, he served as the Vice President of Government Affairs and Communications for the Federal Asset Disposition Association. He also previously served as a legislative assistant in the U.S. Senate for eight years and was a Congressional Chief of Staff in the House of Representatives for four years. Mr. Bunton holds a BA degree in Government and Politics from the University of Maryland.
