By staying in your existing home, you get to enjoy your home’s growing equity and move thoughtfully about your next moves without feeling market pressure.
- Scale Your Upgrades. Kitchen and bath remodels are the most popular improvements. You should choose your upgrades based partly on need and also on how long you plan to stay in your home. If you plan on selling in two years, favor projects with a higher return on investment. Owners planning to move soon should choose exterior projects that boost curb appeal. Another way to improve your odds of recouping costs is to make sure your upgrades fit your neighborhood. Keep a file of all your receipts. If you will have taxable gains when you sell, you can add to your cost basis by proving what you spent on improvements. And, be sure to give us a call at Pacific Kitchens for a free estimate on refacing your kitchen cabinetry!
- Keep Financing to a Minimum. Unless you can get a low interest rate (below 4%) and pay it off within a couple of years – it is best to cover your improvements with cash. If you are going to borrow, choose a Home Equity Line of Credit because you can usually get a lower interest rate for a short term loan.
- Pare Your Payments. Mortgage rates have been falling so refinance soon. Don’t bother if you are selling within two years, you probably won’t get back the closing costs. If you are staying put longer, lock in a lower rate and shorten your time frame.
Look for Energy Savings. A federal energy-efficiency tax credit is going to expire at the end of 2016. You can get up to $500 off your taxes for some energy saving projects including installation of energy efficient windows and doors, replacing older furnace and water heaters. Insulating the attic and basement also get you a tax credit of almost $6,000 for each. And it shaves 20-25% off your utility bills. Without the credit new LED fixtures, ceiling fans and energy-efficient window treatments can yield big short term savings on heating, cooling and other utility bills. If you plan on staying longer, consider solar panels. Solar pays off within 7 to 12 years. They qualify for a separate tax credit.
- Keep Things Up. Routine maintenance is a must for preserving your home’s value. Fixing a small foundation crack now can help prevent a major rehab later. Have major appliances serviced twice and year and inspect the roof annually for damage.