Category Archives: Home Improvement

25 Rules to Grow Rich By: Real Estate Edition

Did you know there’s 25 rules to grow rich by?

Don’t worry if you don’t know them, I didn’t know them either.

But after reading them at CNN Money, thanks to an article from Simple Dollar, I’m not so sure they’re all true.

Now, not all of these rules relate to real estate, so we’ll be tackling the rules that deal with real estate only, since hey that’s what this website is all about. We’ll go through each rule one-by-one and see how valid and applicable they really are. Is it just a bunch of filler that the author of the article on CNN Money wrote or do they have merit?

When I read them, I started thinking, “Hmm.. is this really a rule? Or is it just an opinion?” Too many sites on the internet have tons of “rules” that we should supposedly follow in order to “lose 50 pounds in 8 days” or “achieve financial independence in one month by investing in timeshares” or some other nonsense. Here we’re all about separating the wheat from the chafe and finding out what works in real estate. What’s going to make us money. What’s going to give us the biggest bang for our buck in remodeling our homes. How to save money on your rental payments. Where to find the hottest real estate deals in the country.

There’s a little challenge with our goal of analyzing these 25 rules to grow rich by and modifying them.

There are only 6 rules that really apply to real estate. So we’re going to focus on them and really dissect them!

Here are the 6 rules in their original form (click on the Rule hyperlink for each one to read the revised version):

Rule 1: For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.

Rule 2: It’s worth refinancing your mortgage when you can cut your interest rate by at least one point.

Rule 3: Spend no more than two times your income on a home. For a down payment, it’s best to come up with at least 20%.

Rule 4: Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.

Rule 5: Never hire a roofer, driveway paver or chimney sweep who is going door to door.

Rule 11: If you don’t understand how an investment works, don’t buy it.

How to Extend the Life of Your Dishwasher

From Frugal Duchess:

From Miami Realtor - New Miami Beach Condos use Dishwashers!Here are easy ways to extend the life and efficiency of dishwashers, which typically last eight to 15 years.

• Check the filters. The filters, which trap or catch excess food, are at the base (interior floor) of the dishwasher. ”Always make sure the filters are clean after every load,” said Mike Kozlowski, director of product quality and support for Sears.

• Prevent rust. Examine the tines that hold dishes in place. Look for tines that are nicked or damaged under the rubber coating. Faulty tines could leave rust stains on dishes or break off and damage the pump.

You can fix the damaged tines with rack repair kits sold in the repair section of appliance stores or at major hardware stores. You can also purchase replacement dish racks.

• Inspect the spray arms, which are in the floor or ceiling of the appliance. A buildup of food or detergent can block holes in the arms, preventing the even distribution of water during the cleaning cycle.

• Remove large food particles from dishes, but let the dishwasher do the rest. For example, clear away the French fries, but don’t worry about the dried ketchup stain on the plate, even if you run a load only once a day. This strategy will save water, energy and effort.

”Some people literally clean their dishes before putting them in the dishwasher,” Kozlowski said.

Don’t make that mistake.

• Speed the process. Cycles are often prolonged so that machines can fill up with hot water. For instance, the dishwasher will continue to run water until the water is hot enough to begin a new wash cycle. To conserve time and energy, Kozlowski recommends running hot water for 10 seconds in the sink adjacent to the dishwasher before turning on the machine. This gives the dishwasher a head start by warming the water in the pipes and shortening the running time for the machine.

How to Get Tax Breaks on Your Home With Green Improvements

From Forbes: 

EPAct 2005 - from Miami RealtorLeveraging real estate ownership into deductions has long been an effective strategy for fending off the Internal Revenue Service. Now, if you’re willing to make green improvements, your home can lighten your tax burden even more.

In an effort to reduce energy consumption and pollution, loads of tax credits are available for homeowners looking to limit waste and emissions–consider it a stick and tofu approach. They’re the result of the 2005 Energy Policy Act, which became effective for the 2006 tax year.

The biggest projects carry the largest credits. A solar power system for creating electricity carries with it a 30% of cost tax credit up to $2,000. The same credit goes for solar-powered water heaters, so long as they’re used for residential purposes. Trying to write off a pool or Jacuzzi system will get you in hot water.

“Solar water heaters in the right kind of climate are the most accepted technology,” says Warren Karlenzig, chief strategy officer of SustainLane, a best practices consulting firm for state and local governments. “But they’re not as effective if you live in a place which doesn’t get a lot of sun.”

For the ambitious green-thumbed builder, any energy cell system that has an efficiency rating of 30% and a capacity of at least .5 kilowatts receives a 30% cost credit, as well as an additional $1,000 for every kilowatt of power the system can produce.

Spread The Wealth
But new tax credits for home efficiency improvements aren’t limited to large-scale enterprises. In fact, available credits exist for low-key projects that, in recent Aprils, have been out of bounds for tax breaks.

Substantial undertakings like building a driveway or adding a pool have been deductible for a long time, but in years past you couldn’t save money for window, floor or roof improvements. Now, if the materials are Energy Star-certified and fall under the scope of the Energy Policy Act, you can recoup some costs.

The effect is twofold, according to the Environmental Protection Agency (EPA), which estimates that efficient materials can reduce energy costs by 30%. It may have been a mild winter in many parts of the country, but the average American still spent $1,900 on energy bills last year.

Where To Begin
Throwing yourself headfirst into green improvement by going after tax incentives will help your tax return, but it may not be the best place to start for maximizing your home’s energy efficiency.

“Before you start thinking about using solar energy or any of the other high-tech options available,” says Karlenzig, “the first thing is to do an inventory.”

Most local utilities will perform one free. It highlights your home’s trouble spots where the most energy is being wasted. For a couple hundred dollars, private companies improve the service through the use of thermal imaging to graphically map out on a micro level the points at which energy loss occurs.

The biggest perpetrators are almost always windows and doorways, improvements that in the past haven’t been tax deductible but now carry credits if they improve energy efficiency.

Exterior windows and doors, including skylights, that meet Energy Star requirements have a 10% tax credit up to $200. This also goes for storm windows and doors. Roofing and insulation or sealing that meets efficiency requirements earns a 10% credit up to $500.

Going Green
The green building movement has legs in the high-end luxury market. Pharmaceuticals mogul Stewart Rahr has a geothermal cooling system in his $45 million home in the Hamptons, and former CIA Director R. James Woolsey has an expansive solar-powered energy system installed on the roof of his Maryland home.

But while the tax abatements are nice, the money saved in the long term and the ethical motivation to emit less are the primary motivations for green home improvement.

“It’s all connected–you save money, you save energy,” says Karen Schneider, an environmental protection specialist at the EPA. She points out that the average American home emitted 22,000 pounds of carbon last year. “Credits are paid for 2006 and 2007, but the payoff will be for the life of the product.”

Mother Nature’s Helper
If you’re looking for the most consistent long-term green solution, the answer lies at your local nursery–trees.

Summer heat flows through the east and west of a North American house, and the EPA estimates that mature trees planed on eastern and western exposures can reduce temperature by almost 10 degrees in summer months. In some cities, like Sacramento, Calif., the local government gives trees away in order to reduce strain on the grid.

Now that’s a green solution everyone can wrap arms around.