Getting a refund? Turn it into home equity by investing in great projects like a new front door that'll pay you back at resale. Image: Liz Foreman for HouseLogic
If this year is anything like the last, almost 7.2 million Americans will get a tax refund this spring averaging around $3,000. If you’re a homeowner getting this refund, you’re fortunate because you’ve got more creative ways to invest it for a profit. Doesn’t matter if you’re selling, staying put, or stuck in the middle. Here are three homeowner-only options to grow that refund:
1. If You’re Early Into Your Mortgage
It may not be as instantly gratifying as a treehouse vacation in Costa Rica, but spending your tax refund to pay down your mortgage principal could save you enough funds to take a splurge-loaded vacation a bit later.
Let’s assume you have a 30-year-loan at the average loan amount of $292,000, a 4.5% interest rate, and you’re getting that average refund of about $3,000. If you apply that “found” money to your principal each year, CPA Micah Fraim of Roanoke, Va., says you can shave years off your mortgage — in this case, nearly four. That’s about 95 mortgage payments you won’t need to make! Even better is the more than $70,000 that you’ll save in interest payments over the life of the loan.
If you don’t want to make an annual commitment, think about this: Make that payment just once and you’ll cut seven months off your payments and save more than $8,000 in interest. And when you decide to sell, you’ll have more equity.
2. If You’re Planning to Sell
Invest it in staging, and you may be surprised by how quickly your home gets plucked from the market.
“Staging lets prospective buyers see the space as their own, instead of as belonging to the people who currently live there,” said Ashley Lewkowicz, owner of Ashley Kay Design in Bucks County, Pa.
“A home that’s not staged can sit on the market for six months or more,” she added. “A home I recently staged sold in less than two.”
Not only is a faster sale better for your bank account in terms of saved mortgage payments and utility bills, but a drawn-out listing can cause a home’s price to wilt. That makes those throw pillows, decorative bath salts, and rented furniture way worth the investment.
For a large, suburban home in a major metro area, staging can cost about $2,000 upfront, and then about $500 per month for furniture and accessory rentals, according to Lewkowicz. But a faster sale at a higher price can definitely more than double your money over the course of the sales process.
And most staging can be accomplished with simple little touches.
Who knew your home could be your own personal ATM? For many DIYers, putting that $3,000 tax return into small home improvements can result in getting far more than their investment out of the house later.
A new steel front door costs about $250, but can add about $1,500 when you sell.
New wood flooring costs about $1,770, but is worth $5,000 when you sell.
Even new insulation, which costs about $700, can recoup about $2,000 at sale.
If you’re willing to scope materials yourself and put in a little elbow grease, your tax return can fund a renovation for you to enjoy now and reap the financial benefits later.
Mrb1007 1: This is what Mimi Boseman’s yard looked like at the beginning of her buffer restoration in May 2013. Coir logs stabilize the water’s edge and salt tolerant native grasses are planted near the water’s edge with native wildflowers and shrubs in the back. Photo by Mary Reid Barrow
mrb1007 3: Asters and goldenrod gone to seed and switchgrasses are part of the fall color in Boseman’s buffer. Photo by Mary Reid Barrow
THREE YEARS AGO the lawn at the river’s edge in Mimi Boseman’s Virginia Beach yard was an ugly scene – brown grass and muddy areas all covered in goose poop.
Today, the landscape has totally changed. Salt-tolerant, native marsh grasses that don’t mind the rising tide wave in the breeze. Native shrubs and flowers and wildlife brighten the area. You see all things wild and wonderful, except Canada geese.
Geese don’t like grasses and plants that block their line of vision to the water, so they stay away from this natural habitat. Boseman said she rarely sees geese in her yard, though dozens hang out in the neighbors’ yards nearby.
Boseman has had bluebirds nesting in a house she erected in her new buffer garden. She sees dragonflies and other pollinators buzzing about among the blooms of flowers like buttonbush and seaside goldenrod.
Leading to the boat dock is a meandering path through the grasses that rustle when you walk by. The shrubs and flowers are going to seed and turning toasty brown for the winter. The area is becoming what nature intended waterfront property to be. The plants prevent sediment and pollution from Boseman’s yard and the streets beyond from running into the Lynnhaven River. In reverse, the plants absorb flooding from the river when the water is high. And, of course, the plants prevent geese from taking up residence.
The area requires little maintenance, Boseman said, other than cutting back the saltbush that already has arrived of its own accord and seems to want to take over.
Boseman worked with Eric Gunderson who owns Southern Branch Nursery in Chesapeake. Gunderson is a landscaper and raises hard-to-come-by natives for use in his jobs and for sale to the public. A purist when it comes to using natives in his landscape plans, Gunderson has convinced Boseman of their value.
Not only are the native grasses, shrubs and flowers protecting the shoreline, they also are providing food and cover for wildlife. Pollinators are attracted to native plants and butterflies and other insects must have them as host plants for their young.
For example, Boseman used to like Knock Out roses and wondered why Gunderson suggested native marsh roses for her buffer.
“Eric said, ‘Don’t you want something that will feed the birds?’ ”
Birds dine on the marsh rose’s red rose hips, which now brighten the buffer garden. Caterpillars and other insects that are vital to a garden’s success won’t eat leaves of non-natives, like the Knock Out rose.
Boseman became such a believer in Gunderson’s approach that she went on to have him redo more of her backyard, a gentle slope that leads to the water from her expansive back deck in Birdneck Point.
Gunderson planted shrubs and trees like native beautyberry, elderberry, sumac and sassafras instead. The march of natives up the slope continued this spring when Gunderson planted native shrubs and flowers around the deck. Plants include deciduous native azalea, clethra, blueberries and native flowers like coneflower. In the three-year process, Boseman estimates she has removed about 50 percent of her lawn. Thought the initial expenses have been large, she thinks that she is saving every day on maintenance.
“Think of how much it costs to cut it, fertilize it, aerate it and seed it, “ she said. “Here all we have to is pull a few weeds and keep it mulched.”
Boseman loves the results. She loves the way it looks, and she loves that she is doing the right thing for the environment, whether the river or the wildlife.
“It’s not manicured,” she said. “We are so accustomed to a proper beautiful gardens that look like Morse code – dot, dot, dash.
“If it’s a little wild, it’s OK,” she said. “It’s organized chaos out there.”
Mary Reid Barrow,
firstname.lastname@example.org Follow Mary Reid’s blog at hamptonroads.com/maryreidbarrow.
There’s something desperately missing in your life. You decide to do something about it now, and so you sign up for one of a slew of websites that aim to help yearning hearts like yours find a match. You flip through profiles late at night, and certain phrases or well-lit photos make your heart skip a beat. And when you think you may have found “The One,” you figure it’s time to make an assessment in person.
Dating? Or house hunting?
It could be either.
Neither buying your dream home nor finding true love comes without effort. But just how deep does the comparison go? To find out, we pulled together some data about both—the emotional highs and devastating lows that people experience on their journeys. You be the judge.
Before you even begin to look for homes, you’ve probably heard all about rising home prices, bidding wars, stringent mortgage standards, and other rough-and-tumble tales (especially if you’re a regular reader of realtor.com®!). If you feel a little disheartened, you’re not alone. A little over half of home buyers (52%) believe they will find their dream home in their price range, while 48% say it’s impossible, according to a 2014 survey by BMO Harris Bank.
People are way more optimistic when it comes to love. A 2011 Marist pollshowed that 73% of Americans believe that they are destined to find their soul mate.
Life would be so much simpler if the first house you ever visited, or the first person you ever kissed, was The One—but you don’t live in a fairy tale. (Do you? If so, please contact us!)
Home buyers, be prepared for the long haul: Buyers typically search for 10 weeks and look at 10 homes before purchasing, according to the National Association of Realtors®.
Love doesn’t come easily, either. According to a British study, an average adult woman will have five relationships, four disaster dates, 15 kisses with different men, and two heartbreaks before meeting The one.
What about the guys? The “player” stereotype doesn’t really hold up: The average man will have six relationships and be stood up twice before finding his perfect half.
The Internet has made finding a home much easier than ever. The NAR report shows 92% of home buyers use the Internet at some point during their search. Online websites (such as, ahem, realtor.com) are deemed a very useful information source by 82% of buyers, while not quite as many (but still a high number: 78%) say the same about their flesh-and-blood real estate agent.
Although there’s been a sea change in the way that people view online dating (the idea of finding love on the Internet once fell somewhere on the scale between dubious and pathetic), people aren’t quite as quick to jump online to seek a mate as they are to look for a house.
A 2013 Pew Research Center survey showed 38% of Americans who were single and actively looking for a partner had used online dating sites or mobile dating apps. But among those who have, the majority say dating sites and apps help people find a better romantic match because of the wide range of potential partners they can access.
The first few minutes home buyers spend at an open house go a long way in influencing their decisions. Three-quarters (77%) of home buyers say they’ll know immediately when they’ve found their ideal house, says the BMO Harris Bank survey.
About half (52%) of Americans say they believe in love at first sight, reveals a Gallup poll. Another study shows it takes only 12 minutes for people on a first date to decide if they’re interested in the other person. As soon as people sit down, they will be immediately judged on their smile (64%), whether they make eye contact (58%), and their tone of voice (25%).
Just like the sexy-hot European sports car you bought which turns out to get 4.5 miles per gallon and not even have room for a suitcase in its trunk, the house that you spend months buying may turn out to be a bummer. About 80% of home buyers have at least one major regret about their new home, says an HSH.com survey. Some top complaints include being too small, not having enough storage space, neighbors, and school system.
The reality, of course, is that neither homes nor relationships are ever trulyperfect. But if you really work at understanding what you want and what you need, and taking the time to assess a variety of options, you’re likely to find a pretty good fit. Maybe even one that will improve with time.What about people? Well, the person that you pledge to share your life with can also turn out to be Mr. (or Mrs.) Wrong. A whopping 72% of married women have considered leaving their husband at some point, and more than half (57%) sometimes regret marrying him, according to a poll by Woman’s Day and AOL Living. Relax, that doesn’t mean all of them are getting a divorce. Despite the regrets, 71% still expect to be married to their spouse for the rest of their lives.