Home Improvement Projects That Provide The Best Return On Investment

home repair home maintenance home expenses home costs home buying The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.

Home improvement projects can cost a lot of money when done correctly. Homeowners that are interested in selling their home for a profit in the future want to focus on home improvement projects that are going to provide them with the best return on their investment.

Larger endeavors like renovating kitchens and bathrooms are commonly chosen as the main projects to improve a home, but these projects can often cost much more money than you will get back when you sell your home. Focusing on home improvement projects that boost your property value is a smart way to ensure that your money continues to work for you, even after it has been spent on labor and materials.

According to research conducted by Remodeling Magazine (www.remodelingmagazine.com), which has been tracking these trends since 2002, here are the home improvement projects that will provide you with the best return on your investment.

 

Entry Door Replacement (steel) 96.6% (Entry Door Replacement (fiberglass) 70.8%)

According to the study, the single best investment that you can make in your home is replacing the entry door with a steel entry door. Homeowners that make this investment can expect a return of 96.6 percent on the money spent. The average price of the project investment is $1,162, making it a relatively low cost home improvement project to undertake. Replacing your entry door with a fiberglass entry door will only return 70.8 percent of your investment.

Replacing the entry door will also enhance the curb appeal of the home by transforming its appearance, potentially increasing the interest of potential buyers. If you are replacing a door that has been on the home for more than a decade, it may also give you significant energy savings by reducing the amount of air escaping your home from around the door.

 

Deck Addition (wood) 87.4% (Deck Addition (composite) 74.3%)

The addition of a wooden deck to the home is another home improvement project with an excellent return on investment, averaging an 87.4 percent ROI. Decks and patios are a great way to expand living space at a low cost, generally costing about a tenth as much as expanding rooms in a home. These are also versatile spaces that can be used throughout the year for different functions. The addition of a composite deck has an ROI that is a bit lower at 74.3 percent.

 

Siding Replacement (fiber-cement) 87.0% (Siding Replacement (vinyl) 81.6%)

Another good home improvement project with an excellent return on investment is replacing the siding on your home, which can significantly enhance the curb appeal of a home that is being sold. You want potential buyers to see siding that is clean and well cared for, giving them confidence that the rest of the home has been cared for as well. On the other hand, worn or damaged siding can reduce the value of your home by about 10 percent.

Replacing the siding on your home with new fiber-cement materials offers a return on investment of about 87 percent. Fiber-cement siding is generally viewed as high quality and quality is one of the most important traits considered by buyers when searching for a home to buy. Replacing damaged siding can also improve the energy efficiency of the home, resulting in savings on your utility bills after the project has been completed.

Vinyl siding is less expensive than fiber-cement siding and is easy to install, allowing many homeowners to tackle the product themselves with the help of a few friends or family members. The types of vinyl siding available today have long warranties and fade resistant finishes, guaranteeing that your siding will look great for years to come. Replacing the siding on your home with vinyl siding gives you a return on investment of about 81.6 percent.

 

Attic Bedroom 84.3%

Adding an extra bedroom to your home can result in a significant boost to your property value. Turning an attic into an attic bedroom is a great way to take a rarely used space and turn it into something that is functional for your family or for the people that will be purchasing your home from you. This project has an average return on investment of 84.3 percent and the project costs are generally low because the walls and ceiling of the room already exist.

 

Minor Kitchen Remodel 82.7%

Remodeling the kitchen area is a task that many homeowners undertake before attempting to sell their home. This is because the kitchen is one of the most used areas of the home, resulting in wear and tear on everything from the counters to the floor to the appliances. Doing minor remodeling to a kitchen area provides an average return on investment of 82.7 percent. Minor remodeling involves replacing the appliances, the lighting, the flooring, the countertops, or the cabinetry.

The average cost of the minor kitchen remodels in the report was $18,856, including labor costs. However, many of the tasks required for a minor kitchen remodel can be completed by the homeowner in a few hours, which can significantly decrease the cost of the remodel. Any tools that are needed can generally be rented from a home improvement store like Lowe’s or Home Depot.

Knowing which projects offer the best return on investment will help you make better decisions on where to invest your remodeling dollars. Whether making your space more livable for your family or improving your home to get a better sale price, focusing on the projects that give you the best return on investment is a smart way to increase the value of your property.

How about you all? Which home improvements projects have you completed which you felt like provided a good financial reward?

Share your experience by commenting below! 

Picture: http://en.wikipedia.org/wiki/Handyman#mediaviewer/File:FEMA_-_42428_-_Home_Repair_after_Flood.jpg

Saving Money On Holiday Gifts

money giving gifts gift ideas With the holidays upon us and so many people to get gifts for, it can be difficult to actually save any money.  However, coupons make it a lot easier for you to get great deals on many gifts for nearly everyone on your list, and helps save you a lot of money while making your friends and family very happy during the holidays and beyond.

Here are just a few examples of how you can use coupons on gifts to help get you through the holidays without breaking the bank.

  • Electronic Gifts

Electronics are on nearly everyone’s Christmas lists these days, it seems.  As you probably know already, many electronics are pretty expensive!  Getting these types of gifts for a bunch of family and friends can get really expensive, but thankfully coupons can be used to help you save some money. For example, the coupon site, Groupon Coupons, has teamed up with internet shopping giant Amazon.com to get you many of these gifts at price reductions of up to 75% off!  Everyone is happy with this kind of savings!

  • Weight Watchers Program Gift:

For those on your lists that are looking to shed a few pounds, avoid the dreaded holiday weight gain, or just trying to maintain a consistent healthy diet, there are a lot of coupons out there available for Weight Watchers, NutriSystem, or different gyms.  Get an early start on those New Year’s Resolutions and save money at the same time with these and other similar coupons.

  • SkyMall gifts for the frequent flyer:

If you or anyone else on your Christmas list is like me when they are flying, the SkyMall is a frequently read and enjoyed magazine that helps pass the time away and gives you a lot of ideas for gifts for others or for yourself.  SkyMall offers  several different coupons for various sales and discounts, which will make SkyMall enthusiasts jump for joy.  Right now, there are a few different deals going on, including 15% off and free shipping on many items in the SkyMall catalog.

  • Kid-related gifts:

Did someone on your Christmas list just have a new baby?  There are lots of coupons out there for many kids stores and websites to help save Mom and Dad some much needed cash with their new bundle of joy.  From  deals with Diapers.com that will give 20% off coupons for new customers, 20% off Earth’s Best Baby Food, or 20% off of many different toys and games, you can find the right coupon for you or the kids on your list  Raising kids can be expensive, but it certainly doesn’t have to be with coupons!

From electronics to gardening and from kids to grown-ups, there are coupons for just about everyone on your list.  A great way to make your loved ones happy during the holidays and keep a little more green in your wallet!

 https://www.flickr.com/photos/jimmiehomeschoolmom/4165199870/in/

How I Saved $40 A Month By Reviewing My Cable Bill

saving money frugal living financial planning cable tv The following post is by MPFJ staff writer Travis.  Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

“Dad, my TV stopped working,” said my son as he came down the stairs.  No investigation was necessary, because I knew exactly what had happened.

A letter had arrived a few weeks prior stating that our cable company was going completely digital, and as of a certain date every TV was required to have a digital cable box in order to receive the signal.  One box would be provided free for a year, but any additional boxes would cost $6.99 per month.

We currently have three televisions with cable boxes attached as part of our multi-room DVR system, but we have two TVs that did not; my son’s TV, and one in our guest bedroom.  I wasn’t particularly happy with the requirement to have a $6.99 a month box attached to every TV.  The reason given for dumping the analog signal is to free up bandwidth for more high definition stations and faster broadband service. Seems like progress, but with progress comes a price tag.

That afternoon, I picked up a cable box for my son’s room.  My wife and I decided that the guest room would no longer have a television, since it’s silly to pay $6.99 a month for cable to a room that is used only a couple times a year.  Even though our cable bill would not be changing due to the extra cable box for a year, we used this opportunity to review our cable package and see if there’s anything that we could do to decrease our overall bill.

I opened our latest cable bill, and went through it line by line.  We evaluated each service for value in relation to how much it cost and how much it was used.  Like an episode of Bar Rescue, I’ve agreed to open the books and share the process with you, the readers of My Personal Finance Journey.  Let’s get started.

  • Cable TV Service Gold Package: $99.99
  • DVR Service: $19.99
  • Digital Receiver Rental: $27.96
  • Internet Service: $49.99
  • Phone Service: $19.99
  • Taxes and Fees: $20.44

Total Bill:  $238.36

 

Package Summary:

We currently have a cable TV, broadband internet, and landline phone service bundle through Charter Communications.

 

TV Package Analysis:

Our cable company has really simplified its offerings in the last two years.  Gone are the seemingly limitless ala carte options to choose from.  We now have three packages to choose from:  Select ($79.99 per month), Silver ($89.00 per month), and Gold ($99.99).   We currently have the Gold package, giving us every channel offered by our cable company.  However, in reviewing the channels offered by each package, we only watch the channels in the Select package.  I can’t remember the last time I found something on the premium movie channels that I wanted to watch, and I never watch the obscure sports channels.  We have an opportunity to save $20 a month if we move to the Select package.

 

Equipment Rental Analysis:

Honestly, I was shocked to see how much I’m paying for the combination of the DVR service and the equipment rental.  We could dump the DVR service, but given the new requirement of having a digital converter on each TV, we’d just exchange the DVR boxes for basic digital tuner boxes which cost the same amount each month to rent.  We’d save the $20 a month without the DVR service, but we actually use that all the time.

 

Phone Analysis:

I honestly cannot believe we still have a landline.  I think the only reason I keep it is because we’ve had that number for close to 20 years now, and I’m afraid that someone won’t know how to get a hold of us.  But honestly, the only non-telemarketer that calls our home number is my parents and they could simply be told to call my cell phone number.

If we dump our landline, we’d save an additional $20 per month.

 

Broadband Analysis:

There’s really no option here.  My cable company used to have different speeds available for different prices, but that’s no longer the case.  We currently have 30mps service, and it’s scheduled to move to 60mps by the end of the year as part of their system upgrade.   The only other option we would have is DSL, which isn’t fast enough to support my connection to my employer.

 

Final Analysis:

Our analysis shows that we could easily cut $40 a month from our cable bill, and not even have to alter our lifestyle or television viewing habits.  That means that right now we’re really just wasting $40 each and every month.

The point of this article isn’t to debate whether cable TV is worth the money, or if we should go with a different solution.  That is a different post, one that I’ve already written and concluded that at this time, cable television fits our family’s lifestyle the best.  It is within our budget, and we consciously choose to spend our money on it.   It could very well happen that sometime in the future we may decide that cable TV is no longer worth the money we spend on it, and go in a different direction.  The point of this article is to drive home the fact that my wife and I periodically review all our expenses and look for ways to get as much value as we can out of the services we choose to have, and look for ways to maintain the lifestyle we want while not wasting money in doing so.

During this review cycle, we have identified $40 that we could cut from our cable bill without affecting our lifestyle at all.  Our family’s lifestyle and needs are constantly changing and evolving, meaning that evaluations of this kind are always a good idea from time to time.

Now, it’s time to give my cable company a call.

How about you, readers, do you periodically review your monthly expenses?  How often?

Share your experiences by commenting below! 

***Image courtesy of NayPong at FreeDigitalPhotos.net

How to Determine Which Home Improvement Projects to Tackle First

saving money home repair home maintenance home expenses home decorating home costs home buying frugal living financial planning The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

We bought a house in August, and while it is a nice house overall, it is 18 years old.  There have been no significant renovations, so much of the house is out of date.  There is definitely room for improvement.

Here are some of the projects we’d like to tackle:

Replacing Broken and Green Blinds.  We bought the house with all the blinds included.  After the sale went through, the owners e-mailed and informed us that the large blind in the master bedroom and the blind in the guest room are broken, so they will fall down if you try to open them.  (We’d already discovered this with the guest room blind during the home inspection.)  The rest of the blinds work fine, but they are a deep hunter green.  In some rooms, that color works.  In my daughters’ pink and purple room?  Not so much.

Lack of Sun Screens.  Many houses in Arizona have sun screens on them.  These are dark screens that go on the outside of the house and keep out the intense UV rays, protecting items in your home from sun fading, and more importantly, reducing how much the sun can heat up your house.  With sun shades, your cooling bill can be reduced substantially.  Our house had no sun screens.

Our home had a few other issues too.

Faucet that Hangs to Low Over the Sink.  The space from the faucet to the bottom of the kitchen sink measures 10 inches.  That means it’s impossible to fill the sink with soapy water to wash and still be able to rinse the dishes.  Even without water in the sink, rinsing a large pot is nearly impossible and involves me putting water in my hands to splash the soap off the sides of the pot that I can’t reach.

Pale Pink Kitchen Cabinets.  The kitchen cabinets are a pale pink, and the finish is coming off in many places, exposing the wood.  It’s ugly, and I would like nothing more than to paint all of the cabinets white.  The cabinets also lack hardware, so I’d like to add handles and knobs, too.

Orange and Brown Sponge Painted Living Room.  Finally, the living room is sponge painted ala the 1990s decor style in shades of orange and brown.  No thanks.

 

Choosing What Renovations to Make on a Limited Budget

While I would like to make all of the changes to our home at once so I could live in the house I want, that’s not possible thanks to budget constraints.

We’ve created a hierarchy of renovations.

 

Those That Will Save Us Money

The renovations and improvements that we are making a priority are those that will save us money.

Sun Screens.  We had a few hundred dollars available when we first moved in, so we immediately bought sun screens for the five windows that receive the morning and evening sun.  Doing so helped keep those rooms cooler and saved us on our electric bill.

We are now saving so that in March, when the temperatures in Arizona ramp up again, we’ll be able to buy solar screens for the three windows that receive the afternoon sun and heat up the master bedroom.

Kitchen Faucet.  Water is precious everywhere, but even more so when you live in the desert like we do.  Having a kitchen faucet that gives us so little room to manipulate pots and pans underneath it wastes a lot of water.  This is another priority repair, though this renovation may have to wait until after we install the sun screens.

 

Those That Will Increase the Value of the House

Next on our list of renovations are those that will improve the value of the house.  (This is important because we know this isn’t our forever home.  We will likely move in the next 5 to 7 years to be closer to family.)

Painting the Kitchen Cabinets.  Our kitchen has a lot of great features–open concept, huge island, eat-in dining space.  However, the cabinets are a real eyesore.  We plan to DIY paint the cabinets white and also install knobs and handles on the cupboard doors.  Just doing this, assuming we do it well, will increase the value of our home when we get ready to sell it.

Painting the Living Room.  Remember that sponge painted living room in desert brown colors?  That definitely has to be repainted before we sell.  In fact, when we were house hunting and I saw the pictures of the home online, I didn’t even want to look at the property because the living room was so ugly.  The sponge painting didn’t look like sponge painting in the picture but rather like some hideous wallpaper.  Besides being aesthetically pleasing to us, painting the living room will make the house more marketable in the future.

 

Those Projects That Will Wait

The Blinds That Fall Down.  The guest room is rarely used, so for now, we will leave that blind and not replace it.  I do want to replace the blinds in the master bedroom, especially since the window with the broken blind is the one that brings in the most sun light.  However, there are only a few months of winter left now, and in the summer we don’t open that blind to help keep the house cool.  Therefore, this improvement will wait until at least next winter.

The Green Blinds.  I really hate the hunter green blinds, but they’re functional, so they’re at the bottom of our renovation/improvement list.

Renovating and improving your house on a budget requires a great deal of patience, especially when it seems like several projects are important.  It also requires discipline, because as much as I know that the sun screens are important, I would much rather have a living room that I like to look at!

 

Make Those Home Improvements That Increase the Value of Your House First

If you, too, have a list of home improvements you’d like to make, the best bet from a financial stand point is to first make the improvements that increase the value of your house.

In general, these areas offer the most bang for your buck:

  1. Home systems. These include things like replacing hot water heaters, air conditioning/heating systems, and plumbing.  If you can replace the current model with an eco-friendly version without wrecking your budget, you’ll likely get even more value for your money.  However, don’t overspend for a “green” system because you won’t recoup that much.
  2. Kitchens. The kitchen is the heart of the home, so you want to make it as nice as you can.  This is one area where you’ll definitely improve your resale value.  Minor upgrades like painting the cabinets and installing hardware don’t cost that much money yet can dramatically improve your house’s value.
  3. Curb appeal. Finally, consider making your home more friendly from the outside.  Install outside lights, plant some greenery, consider adding a tree.  The front of the home is most important, and first impressions only happen once.

Deciding which home improvement project to tackle first is an individual decision, but financially, consider the one that will most improve the value of your home or will save you the most money.

How about you all? Do you own a home that needs or needed renovations or improvements?  If so, how did you decide which project to tackle first?

Share your experiences by commenting below! 

Six First-Time Homebuyer Mistakes To Avoid Like The Plague

saving money home repair home maintenance home loans home costs home buying financial planning The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

Remember a few short years ago when millions of people were losing their homes to foreclosure?

Some of them were hit by unfortunate circumstances – others simply walked away when the value of the property fell below the amount of the mortgage that they owed on it. But, it’s likely that most of them lost their homes because they made one or more major mistakes at the time they bought the property.

If you are in the market to buy a house, there are steps that you can take now to avoid falling into a similar trap. Here are six first time homebuyer mistakes to avoid like the plague.

 

1. Over-Buying

This is probably the single biggest reason why people get into trouble with homeownership. Simply put, they buy more house than they can comfortably afford.

They do this by buying at or above the highest house price level that they are qualified for. They may be pre-qualified to buy a home for $300,000, but end up buying one for $320,000.

That actually understates the problem. Whatever property value they are qualified to buy, they always have the option to buy beneath it. For example, they can easily buy a house for $240,000 and that will leave them plenty of room in their budget for non-housing expenses, including saving money.

But by buying at or above their highest qualification level, they essentially doom themselves to a life of always needing to stretch to meet their monthly budget. And should an emergency come along, they will be completely vulnerable.

Moral of the story: when buying a house, always leave yourself plenty of financial margin for error. You will probably need it.

 

2. Buying a House Before You’re Ready

A lot of people buy a house because of peer pressure, and not for legitimate need. The pressure often comes about from parents and from other family and friends who are certain that it is “the right thing” for everyone to become a homeowner, and to do it as soon as possible. You may even be persuaded to buy a home because of the tax benefits that it offers.

But none of these are legitimate reasons to take on a financial obligation as great as owning a house. Buy because you are in a position in your life – such as marriage or the arrival of children – that make it desirable. Or buy because it’s less expensive than renting a similar property in your area.

There are times in your life where owning a home can be the absolute wrong course of action.

Unfortunately, it isn’t a decision that is easily reversed. Be sure that you are ready for the commitment of both time and money that owning a home requires. If you’re not, relax and take your time.

 

3. Not Doing a Home Inspection

There are at least two reasons why homebuyers pass on having a home inspection done on the property they’re buying:

  1. They don’t want to spend the $200 or $300 that it will cost, or
  2. They are so in love with the property that they don’t want to learn any bad news that might cause them to not buy it.

Neither are legitimate reasons to not have a home inspection. That inspection will be your last opportunity to back out of what could very well be a very poor deal. Pay the extra money, or have a family member pay for it, but get a home inspection done, and pay close attention to what it contains.

Not having it done can cost you thousands of dollars later on – money that you may not have.

 

4. Ignoring the Possibility of Living on a Single Paycheck

This gets back to over-buying, but it’s more specific. If you are too tightly stretched on your house payment, there will be no room in your budget if one parent wants to stay on with a new baby, or even if one wants to quit his or her job to start a new business.

In an ideal world you will qualify for the house payment based primarily on a single income. While this is not always possible, doing so gives you the flexibility that may be absolutely necessary at a later date. At a minimum, try to get as close to qualifying on a single income as you can, which may allow you to make other arrangements in the event that it becomes necessary.

 

5. Buying a Bunch of New Stuff for the New House

Many homebuyers feel the absolute necessity to fill the new home with all kinds of new stuff. This can include new furniture, new window treatments, and even a brand-new car. It’s also not uncommon for new homebuyers to pull out perfectly good carpet and to replace it with new carpet or with wood floors.

That kind of activity costs money at a time when you’re probably already stretched thin. And you certainly don’t need to be running up credit card balances to make it happen.

After you buy your home, you should plan on being extremely conservative spending your money. It would be far better to put any extra money into savings, that way you will have a cushion in the event of unforeseen circumstances. After that, you can begin to make gradual improvements to the property, as additional funds become available.

 

6. Closing Broke

Next to over buying, this is likely the second-biggest mistake that first-time homebuyers make. Owning a home cost money, generally more than renting does. After all, if the heater melts down and needs to be replaced, you won’t be able pick up the phone and call the landlord to have it taken care of.

Mortgage lenders typically require that you have “cash reserves” – liquid savings equal to somewhere between two to six months of your house payment. Many homebuyers will show this amount only for qualification purposes, then the cash quickly disappears.

Owning a home requires that you maintain a certain amount of liquidity, and that needs to start from day one of your ownership. It sets a positive pattern, if you have money available right after the closing. Take this seriously, because trying to save up money when you’re broke and taking care of a home is not an easy task.

The standard advice from financial planners is to have somewhere between three and six months of living expenses in an emergency fund. The advice works extremely well for first-time homebuyers, even if lenders require far less.

Follow these six steps, and your life is a homeowner should be a relatively stress-free experience.

How about you all? What mistakes did you make when you first bought a house? Any of the ones above?

Share your experiences by commenting below! 

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