Our Real Estate Blog
When building and decorating a new home, there are many things you can do to make the space look more elegant and refined. If your home building and decorating budget is tighter, there are some things you can do to elevate the look of your home without spending a large amount of money. These tips will help you get there.
1. Add Some Crown Molding
Crown molding is an elegant finishing touch to your space. Whether at the ceiling or at chair-rail height, crown molding gives your room and your home a finished look. It’s actually quite affordable, even with the elegant look that it creates, making it a good finishing touch to your home. Get creative with higher baseboard molding, ceiling beams, medallions and more.
2. Paint with Color
Many newly built homes are painted all white. While this is a great neutral palette, it does not add character to the space. Instead, add a color to your home. For an elegant finishing touch, choose either a bold and dramatic palette or a soft, understated one.
3. Invest in Unique Hardware
When building or re-decorating a home, you have to have drawer pulls, knobs and other hardware, so why not elevate them a bit? Instead of the common styles you see in just about any home, consider choosing something unique. This will make your home more interesting and give you a more elegant feel. The bulk pieces you can pick out at any hardware store won’t do, however. If your budget is tight, look at small local hardware stores, antique shops and flea markets to find something elegant to elevate your space.
4. Ditch the Standard Light Fixtures
Light fixtures are another place where you can easily add elegance to your new home. Most builders will have standard light fixtures they use. Either during the building phase or as soon as you move into the home, ditch these for something more elegant and unique. This is another place where you can find interesting pieces by shopping second-hand, if your budget is tight, or spring for one particularly elegant light for your main living room or dining room, and build your decor around it.
5. Choose Hardwood-Look Floors
When building a new home, you have some options for flooring. If possible, choose something that resembles hardwood rather than choosing to carpet the home from one end to the other. Even if you don’t have the budget for actual hardwood, a luxury vinyl or laminate floor can give your home that elegant, timeless look you crave, and you can always add a rug for some softness.
Having a beautiful, elegant home is a goal worth reaching for, and it is achievable on a budget. Use these tips to give your home that finishing touch that you will be proud to call your own, all while staying within your home building and decorating budget.
Property owners got clobbered in the Great Recession of 2008, but that was the exception rather than the rule. Real estate typically weathers hard times well compared to other investments. Still, there’s always the possibility you could get squeezed if property values drop or if your personal or business income takes a hit. Whether you’re an individual homeowner with perhaps a second home or a rental or two, or you have significant investments in many kinds of real estate, here are a few thoughts about readying yourself for a recession.
Preserve and Increase Liquidity
A big recession risk is that your income will decline (either real estate rentals or unrelated income) and you’ll have trouble meeting mortgage payments or other expenses such as upkeep and taxes. You may be forced to sell property at an unfavorable time. Having cash, or assets easily converted to cash, helps you meet your obligations. In addition, there will be others eager to sell and bargains to be had, and if you have cash on hand you’ll be able to take advantage.
If you suspect hard times are on the horizon, consider some these options:
Get rid of low-performing assets. This includes selling real estate that produces inadequate return or is at risk of depreciating. It might also be time to rebalance your non-real estate portfolio toward more recession-friendly assets.
Defer major expenditures. Put off buying that vacation home or taking that expensive vacation. Don’t get in a position where you hold assets that are hard to turn into dollars.
Be prepared to reduce your good tenants’ rent. They may be struggling too, and getting something from them is better than if they move out and give you nothing at all, or if you acquire problem tenants in their place. The goodwill you generate may pay off.
Own the Right Kind of Real Estate
All properties are not equal when the economy retracts.
The most hard-hit are vacation rentals, industrial properties, office buildings and hotels.
Apartments will generally continue to do well. Also multi-family units such as duplexes, triplexes, and multiplexes. In many parts of the country there are high occupancy rates and demand for your apartments could actually increase. Student apartments in college areas are another good bet.
Self-storage units do well when families have to downsize and store belongings.
REITs and crowdfunded real estate follow the same patterns. Those investing in apartments and multifamily dwellings are the best positioned.
Invest based on cash flow rather than hoped-for appreciation. You may be in for a few years where cash flow is all you get.
When the next recession comes, it’s unlikely that real estate will bear the brunt, but that doesn't mean you can pooh-pooh the risk. However, if you have access to enough cash and own recession-friendly properties, you have a good chance of coming through in solid shape.
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When many homeowners set out to declutter their home, they aren’t quite sure of what they’re getting into. Decluttering is a big job that requires some planning and an understanding of your end goals.
Some homeowners are setting out to declutter their home because they’re moving in the near future and want to simplify their move or make their home more appealing to potential buyers. Others have just noticed the junk piling up in their drawers and on their countertops and are fed up.
Regardless of your situation, if you want to declutter you’ve come to the right place.
In today’s post, we’re going to talk about one of the best ways to set out on your mission of decluttering your home.
Why room by room?
Decluttering a home can take a lot of time and can be demotivating if you aren’t seeing a lot of progress. One way to break this process down into more manageable pieces is to declutter your home one room at a time.
This method also helps you manage the time you plan on spending decluttering. If your goal is to declutter one room per week until you move, then make sure you have 4 or 5 weeks to complete your cleaning and decluttering.
We’ll start with one of the smaller and easier rooms in your home, the bathroom. A good way to start is by going through your closet and cabinet and getting rid of old supplies and medicines.
Have a first aid kit that you haven’t touched in five years? There’s a good chance most things in it are expired anyway.
Once you’re done throwing out expired items, see if you can reorganize what’s left. A good way to take advantage of the space in a small bathroom is to use door hangers on the inside of your bathroom closet for hanging brooms, dustpans, mops, etc.
Does your bathroom also have messy stacks of assorted towels? One good solution is to roll up your hand towels and store them vertically in a basket that will be kept in your closet. This prevents your stacks of towels from tumbling over, never to be straightened again.
It’s amazing how kitchen utensils and appliances can add up over the years. Do you have a garlic clove grinder that’s been sitting in your drawer for years? Chances are you can toss it out.
Once you’ve made some space in your kitchen drawers and cabinets, bring some order to what’s left by using compartments and stackable organizers. This will help keep you on track by giving each item in your kitchen a “home.”
You probably already guessed it, but the most disorganized area in most bedrooms is the closet. A good rule of thumb when cleaning out clothes is to ask yourself if you’ve worn the item since this time last year. If not, there’s a good chance you can safely donate it to a thrift store.
Have a tendency of throwing dirty clothes in piles on the floor? Make things easier on yourself by keeping a clothing bin nearby that you can toss all of your dirty clothes into and worry about sorting them later.
Suppose you’ve inherited your parents’ longtime home. Suppose they paid $100,000 for it, and it’s now worth $300,000. Had they sold it while it was in their possession, they would have avoided paying capital gains tax due to the Taxpayer Relief Act of 1997.
Now that it’s yours, has that tax avoidance opportunity been lost? If you sell it for $300,000, will you have to pay taxes on the $200,000 gain?
The answer is no, and the reason is step-up basis.
What is step-up basis?
When you sell an asset, you may owe capital gains tax. For example, if you buy stock for $10,000 and sell it 10 years later for $15,000, you owe tax on the $5,000 you profited. The original cost, the $10,000, is your basis, and you are taxed on your sale proceeds minus that basis.
If you buy stock, the original cost is your basis. But if you inherit stock, your basis is stepped up to what it’s worth when you inherit. If your mother leaves you that same stock, now worth $15,000, your basis is $15,000, not the $10,000 she paid. The IRS looks at it as if you acquired the stock for $15,000. If you sell it later for $18,000, your taxable gain is ($18,000 - $15,000) or $3,000.
Real estate works the same way. Going back to our example, your basis in the inherited home is $300,000, not the $100,000 your parents paid. If you sell it immediately for $300,000, you've made no taxable profit and you keep everything. You pay no capital gains tax at all. If you sell in a few years for $350,000, you pay tax only on the $50,000 difference. The appreciation that happened while your folks were alive never gets taxed.
If you decide to rent that house out (or if you inherit an apartment building) there’s yet another benefit. You can depreciate the dwelling at the step-up value, even if the previous owner used it as an income property and depreciated it. For that $300,000 building, you can deduct $10,909 a year from your rent income over the 27 ½ year depreciation period, rather than the $3,636 if your basis had been $100,000. You’d pay taxes on $7,273 less every year for a long time.
Step-Up During Your Lifetime
Under special circumstances you can take advantage of step-up basis on real estate when you give it away. You can donate property to a charity and deduct the step-up amount rather than your original basis. However, rules are strict. There are appraisal requirements, limitations based on taxable income and the charity must use the property in its work rather than resell it.
There is an even more specialized opportunity under the recent Tax Cuts and Jobs Act to sell appreciated property, invest in a designated opportunity zone, and defer or avoid taxes on your gain.
In both of these specialized cases, you must follow stringent regulations. Don’t wade in without the help of an expert.