Getting a Tax Refund? Use It on Home Improvements

February signals the start of tax season, a time when many Americans gain nearly $3,000 on average in the form of a tax refund, according to the IRS.

Splurging on a vacation or iPhone X is tempting, but as a homeowner, sinking refund cash into your house may be smarter, especially if debts are already under control, says Lisa Greene-Lewis, a certified public accountant and tax expert at TurboTax.

Even small home improvements can nudge home value — and your quality of life — in a positive direction. But how do you decide what to do?

The first question to ask, says Craig Webb, editor in chief of Remodeling magazine, is “How long do I plan to stay in the home?” The answer dictates how much you should spend on home improvements and which projects to prioritize.

If you’re staying put, focus on changes that make your life better and improve value, Webb says. Fix what’s broken before thinking about curb appeal.

Here are some home improvement ideas in several price ranges so you can put that tax refund to work.

» MORE: See how much your home is really worth

Around $100

Replace cabinet hardware. Changing knobs or handles is fairly simple, but gives the whole room a new look, says Colin Shaw, owner of Shaw Remodeling in Niantic, Connecticut.

Seal the driveway. You’ll reduce unsightly cracks and slow deterioration of the concrete or asphalt.

Get the HVAC system serviced. Regular cleaning can add 10 years to the life of your system, says Laura Hales, a real estate agent and owner of Hales and Associates in Overland Park, Kansas.

Around $500

Add a tile backsplash. Backsplashes provide an instant transformation at a fraction of what a full kitchen remodel costs.

Refresh interior paint. New paint in main rooms brightens the whole house, and doing it yourself saves on labor costs, Hales says.

Insulate the attic. Buyers love energy efficiency, and you’ll love lower utility bills.

Around $1,000

Get a new front door. Shaw recommends fiberglass doors that don’t swell or contract with the weather.

Replace inefficient appliances like the water heater, toilet, refrigerator or dishwasher.

Tile the bathroom floor. Heavy foot traffic leaves flooring dingy. Opt for bright, easy-to-clean tile instead.

Around $3,000

Install new kitchen countertops. Almost all buyers want granite, quartz and other solid surfaces, Hales says.

Replace the garage door. A new garage door recoups around 98% of its cost in improved home value, according to Remodeling magazine’s 2018 Cost vs. Value report.

Enhance your landscaping. Stone pavers, a fire pit or exterior lighting boost curb appeal and functionality.

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February 27, 2018

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Which renovations are worth your investment?

The cost of remodeling a home is easier to stomach when homeowners can expect to recoup a sizable percentage of the costs of the renovation. While basing renovations on their potential impact on resale value may be unwise, return on investment is something homeowners must consider when mulling renovation projects.

Many homeowners wonder which renovations will resonate most strongly with potential buyers when a home is put up for sale. According to Remodeling magazine, homeowners are less likely to recoup their investment in a major kitchen or bathroom remodel than they would with basic home maintenance, such as new siding. That’s because buyers are most interested in how the bones of the house – or those elements that keep the house protected and can be costly to fix – were maintained.

Each year, Remodeling magazine issues its “Cost vs. Value Report,” which highlights the projects that offer the most return on investment. In 2016, the No. 1 project was the installation of fiberglass attic insulation, which could produce 116.9 percent recouped cost and a resale value of $1,482. Rounding out the top five were manufactured stone veneer for the exterior, a standard new garage door, a steel entry door, and an upscale garage door.

For those considering more expensive renovations, keep these figures in mind, courtesy of Forbes.

  • A major remodel of a 200-square-foot kitchen can cost around $113,000, with homeowners recouping 60 percent.
  • Replacing 1,250 square feet of siding with new fiber siding can cost $13,000, but homeowners can expect to recoup 80 percent of that cost at resale.
  • Replacing 10 existing double-hung windows with vinyl low-e glass windows is valued at $14,000, and the return can be between 68 and 73 percent.

There are even renovations that seem like good ideas but can actually hurt the resale value of a home. MSN Money lists these projects as money-wasters for those who want to sell soon:

  • Lavish lighting fixtures can look dated in a few years when trends change.
  • Wallpaper or textured walls can be notoriously hard to change, and buyers know that.
  • Kitschy renovations, such as 1950s diner tiles, may appeal to only a select number of people. Neutral renovations are better if resale is the goal.
  • Many real estate experts warn against converting a bedroom into anything other than a bedroom – even for the purposes of a home office. Such conversions can immediately devalue the property. The same can be said about combining two small bedrooms into one larger space.

Homeowners should investigate potential renovations before committing the time and money to something that may offer little value at resale.

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  • Metro Creative | 

Ask the Expert: What to expect from your home remodel

When you dream about remodeling your home, you picture the end result. How beautiful it will be to enjoy an added sunroom, a remodeled kitchen or bathroom, a finished basement, or a new outdoor living space. You envision that the investment will pay off and your home will be greater than it was before.

That dream can be achieved, but it requires a lot of hard work, patience, a realistic budget and hiring the right contractor.  If not, your dream can become a nightmare.  Just to be clear, even if you find the right contractor, the remodeling process can be a long journey, filled with hard decisions, multiple options, and trade offs. There will also be times of disappointment when, and if your expectations are not met.

A home remodeling project requires a lot of communication between you and your contractor, as there will be a lot of ups and downs during the remodeling process. Weather, the availability of materials, and the coordination of subcontractors may delay your project. That is why it is pivotal for your contractor to maintain adequate and continuous communication before, during and after the project has been completed. Failure to do so may leave you feeling sorry you started the project in the first place.

Remodeling your home can be stressful for your family. There will be strangers in your home, your furniture will be pushed to the side or removed, and your living spaces may be off limits due to storage of materials or construction. When considering contractors for your home remodeling project, ask them how your daily activities will be affected by the project, and what portion of the house they will need to store materials and tools.

When planning your home remodeling project, it requires you and your significant other to have a clear picture of the goals for the project, a clear budget, and a reality check to align your wants and needs with your budget. One of the most difficult aspects of a home remodel is the stress it places on relationships.  Changes to the initial plan, the spending of additional money and the overwhelming sense of getting caught up in the moment, can lead to contention and anger between family members.

Finding the right contractor is pivotal for the success of your home remodeling project and potentially, your relationship. Working with a contractor that you are comfortable with, who communicates well, provides you with a comprehensive contract, a sensible payment schedule, who has great references, and who is fully licensed and insured are the key traits of a reputable, conscientious and professional home remodeling company that has their customers best interests in mind.

When interviewing a professional remodeler, ask about how the project is going to affect your life, and lifestyle. Ask how they handle delays due to weather, or what is the process when you are unhappy with the work that is being provided.  In addition to the fundamental hiring process, like checking the businesses licenses, insurance, references, and past work, it is also important to understand how your project will be supported. Who is the contact person at the contractor office if things are not done according to the contract, or if something came in or was installed with damage.

When interview a potential contractor, take advantage of the time they are with you, and understand what the role of the person who is standing in front of you plays in the organization. Is he connected to the organization or just a salesperson. Will he be involved in the remodeling project, or available if any concerns arise during the project.

When narrowing down your search for a contractor, request a site visit to an active client’s jobsite. Make it known that you are checking on the company and that you want feedback from other homeowners – a true professional considers that as a positive sign when working with a homeowner.

When hiring a general contracting firm, they will facilitate your entire project. The scope of work may include subcontractors, including; plumbers, electricians, HVAC installers, tile installers, roofing and siding installers, to name a few.  It is important that you are provided information about all the contractors that will be on your jobsite. Their references and workmanship should be just as good as the general contractor you have hired.

Subcontractors are essential in providing specialized services for your project. Licensed plumbers and electricians may be used if you are completely renovating a bathroom or kitchen, or if you are adding onto your home.  A HVAC company may be needed if you are renovating ductwork or replacing your heating or air conditioning system.

From the very beginning it is important to share your budget concerns with your contractor. Professionals are respectful of a client’s budget and will create a plan around it, not over it. Remember, your budget needs to include; the proposed cost by the contractor and architect, all products and materials you are responsible to purchase independent of the contract, contingencies and the potential of unforeseen existing conditions.

Prior to selecting your contractor, you should consult with an architect to identify if your project will need to be filed and permitted by the NYC Department of Buildings. Construction work without permits can lead to violations and stop work orders that will hinder your project. A reputable, local contractor, who is familiar with building code, will be able to determine if your project must be filed as well.

After selecting a contractor that you are comfortable with, it is important to review your contract word by word. Contracts should provide specific details about your project, the materials that will be used, your responsibilities as a homeowner if you will be providing materials for the job, warranty information, and a payment schedule based on benchmarks of completed items. Your contract not only protects you, it also protects your remodeler.

Homeowners are not as familiar with the remodeling process as the contractor they hire. It is important to ask questions about terms, or unfamiliar processes if you are not clear what they mean. Pay attention to the details about change orders, payments, additional fees, timelines and responsibilities. If it’s not in the contract, it doesn’t exist.

Decisions surrounding the selection of products and materials for your home remodel is an important process, as some of your choices may create a delay in the project. With so many options to choose from, product selections are one of the primary reasons for project timelines to be extended. Included in your contract should be the selections you have made for materials and products, and the allowances your contractor has provided for the materials they are purchasing on your behalf.

Once you hire your contractor, create a communication plan. A common downfall of a renovation is the lack of communication between  homeowners and contractors. Timelines should be provided for payments to the contractor which directly relay to the progress made on the project. In addition, you should clarify the roles of all subcontractors, suppliers, and workers. Make sure you are comfortable with the communication methods, and the availability and frequency of communication that is expected.

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Written By: By Lana Seidman – NARI-HIC of Staten Island, Inc.

Original Date: Feb 12 2018