The Top 10 Remodeling Projects with the Highest Cost Recouped in Kansas City

If you’ve got a fixer-upper or just want to make some improvements on your home, there are some areas that you should focus on first.  Always take into consideration which remodeling projects will get you the highest rate of return.  The higher the cost recouped, the better your remodeling investment was!

So which remodeling projects tend to have the highest cost recouped here in Kansas City?  We took at look at the Remodeling 2013 Cost vs. Value Report which gave us an in-depth look at what homeowners from KC should focus on when it comes to remodeling. 

The top 10 remodeling projects with the highest cost recouped in Kansas City are:

1.  Entry Door Replacement (steel):  This remodeling project includes removing existing 3-0/6-8 entry door and jambs and replacing them with a new 2-gauge steel unit, including clear dual-pane half glass panel, jambs, and aluminum threshold with composite stop.  It also includes replacing the existing locket with a new bored-lock.

• Cost: $1,201
• Resale value: $913
• Cost recouped: 76.0%

2.  Deck Addition (wood):  Adding a deck to a home includes adding a 16-by-20 foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers.  This remodeling project includes installation of pressure-treated deck boards in a linear pattern, built-in benches and planters, stairs (3), and a complete railing system to include wood posts, railings and balusters. 

• Cost: $10,152
• Resale value: $7,231
• Cost recouped: 71.2%

3.  Deck Addition (Composite): Add a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers. Install composite deck material in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing using a matching system made of the same composite as the decking material. 

• Cost: $16,026
• Resale value: $11,356
• Cost recouped: 70.9%

4.  Garage Door Replacement:  A garage door replacement includes removing and disposing the existing 16x17 foot garage door and tracks.  Then, install a new 4-section garage door on a heavy-duty galvanized steel track (but reuse the existing motorized opener).  The new door is usually high tensile strength steel and foam insulated to minimum R-12 with thermal seals between pinch-resistant panels.  Windows in top panel are ½ inch insulated glass.  Hardware includes galvanized steel hinges and ball-bearing urethane rollers.  

• Cost: $1,551
• Resale value: $1,048
• Cost recouped: 67.6%

5.   Entry Door Replacement (fiberglass): For this project, remove existing 3-0/6-8 entry door and jambs and replace with new fiberglass unit with simulated wood grain, stained same color both sides; dual-pane, decorative halfglass panel with zinc caming; PVC-wrapped exterior trim in color to match existing trim; 2.5-inch interior colonial or ranch casings in hardwood stained to match door. Replace existing lockset with mortise lock with lever handle and integrated deadbolt in oil-rubbed bronze or satin-nickel finish.

• Cost: $2,834
• Resale value: $1,853
• Cost recouped: 65.4%

6.  Window Replacement (vinyl): In this project, replace 10 existing 3x5 foot double-hung windows with insulated vinyl replacement windows. 

• Cost: $10,299
• Resale value: $6,718
• Cost recouped: 65.2%

7.  Window Replacement (wood): Replace 10 existing 3x5 foot double-hung windows with insulated vinyl replacement windows. 

• Cost: $11,193
• Resale value: $7,225
• Cost recouped: 64.6%

8.  Minor Kitchen Remodel: A minor kitchen remodel includes a 200-square-foot kitchen with 30 linear feet of cabinetry and countertops.  Replace front of cabinet boxes with new raised-panel wood doors and drawers, including new hardware.  Replace wall oven and cooktop with new energy-efficient models.  Replace laminate countertops and install mid-priced sink and faucet.  Repaint all trim, add wall covering and remove and replace resilient flooring. 

• Cost: $19,539
• Resale value: $12,474
• Cost recouped: 63.8%

9.  Siding Replacement (vinyl):  This project includes replacing 1,250 square feet of existing siding with new vinyl siding.  Include all 4/4 and 5/4 trim using either fiber-cement boards or cellular PVC.

• Cost: $12,142
• Resale value: $7,378
• Cost recouped: 60.8% 

10.   Attic Bedroom Remodel:  This project includes converting unfinished attic space into a 15-by-15 foot bedroom and a 5-by-7-foot bathroom with shower. It includes a 15-foot shed dormer, four new windows, and closet space under the eaves. Insulate and finish ceiling and walls along with carpeting the floor.  Extend existing HVAC to new space; provide electrical wiring and lighting to code, retain existing stairs, and add a rail and baluster around stairwell.

• Cost: $51,932
• Resale value: $31,314
• Cost recouped: 60.3%

Top 4 Things Homeowners Need to Know About The Fiscal Cliff

The fiscal cliff.  You may have heard of it and you may know what it is.  But how does the fiscal cliff affect homeowners and the real estate industry?  I have narrowed down the top 4 things homeowners need to know about the fiscal cliff in 2013:

1.  It’s all about the dates. 
There are some important dates that will affect you as a homeowner.  But what day is important and what day isn’t?  Here’s what you really need to remember:

• The bill was signed into law by President Obama on January 2, 2013. 
• Mortgage Cancellation Relief is extended for one year to January 1, 2014.
• Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012.  
• 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
• 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

2.  Pease Limitations
Pease Limitations reduce the value of itemized deductions and are permanently repealed for most taxpayers.  These will, however, be reinstituted for high income filers (individuals earning more than $250,000 and joint filers earning above $300,000).  The amount of adjusted gross income above the threshold is multiplied by 3 percent, however, the total amount of reduction cannot exceed 80% of the filer’s itemized deductions.

3.  Capital Gains
Capital Gains rate stays at 15% for those in the top rate of $400,000 (individual) and $450,000 (joint) return.  After that, any gains above those amounts will be taxed at 20%.  The $250,000/$500,000 exclusion for sale of principal residence remains in place.

4.  Estate Tax
The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax.  After that the rate will be 40 percent, up from 35 percent.  The exemption amounts are indexed for inflation.

To learn more about the fiscal cliff, be sure to visit the following resources:

• Realtor.org
• Bonds.About.com
• Forbes.com  

Win a $200.00 or $50.00 Amex Gift Card from Team Ohlde!

During the holiday season, we all could use a little extra cash.  Lucky for you, that extra cash could be in the palm of your hand...just by visiting Team Ohlde on Facebook!

On December 14, 2012, Team Ohlde will be giving away both a $200.00 and a $50.00 American Express gift card—just in time for the holidays! 

How can you win? Simply “Like” Team Ohlde on Facebook before December 14, 2012 to enter to win!  Two lucky Facebook fans will be drawn on December 14^th and will win either a $200.00 or a $50.00 retail card from AMEX!  It’s that simple!!

So what do you say?  Want to do a little extra fun shopping this holiday season? Like Team Ohlde on Facebook and start your holidays off on the right foot!  Good luck!

Visit Team Ohlde: http://www.facebook.com/teamohlde?fref=ts &  @ToddOhlde 

The Impact of Natural Disasters on the Real Estate Market

The United States, and more specifically the Northeast states, are experiencing one of the largest hurricanes of all time.  At about the same size as the state of Texas, Hurricane Sandy has blown through the Northeast coast, leaving many New Yorkers in complete tragedy throughout the last few days of October 2012.  Sandy has threatened an estimated 284,000 homes and has caused approximately $87 billion in damages, according to CoreLogic.  Massapequa, located on the South Shore or Long Island, has more than $4.6 billion in total structure value at risk alone.

The impact of what is now being referred to as “Superstorm Sandy” does not only affect many families in the New York area, but Inman News has also reported that natural disasters, much like this one, can have a “chilling” effect on the real estate market. 

How so?

When natural disasters occur in certain areas, home buyer confidence greatly decreases.  In addition, these catastrophes have been proven to stall mortgage operations, hurt home sales and have even more dire consequences when combined with the current economic factors that our nation is experiencing. 

Take one of the nation’s most famous hurricanes of all time, for example—Hurricane Katrina.  Hurricane Katrina did more than kill more than 1,800 people and displace 750,000 households.  In addition, the number of homes sold in New Orleans dropped approximately 23% in just one year (May 2008-May 2009). 

The same exact outcome was reported in the real estate market after the 1989 and 1994 earthquakes in San Francisco.  Even after the massive oil spill on the Gulf Coast (although it was a man-made catastrophe rather than a natural disaster), the market crashed.  In fact, the Gulf Coast oil spill impacted the real estate industry so much that $60 million of BP’s $20 billion Claims Fund was set aside for real estate professionals. 

But that’s not to say that all catastrophes have a negative impact on the real estate market.  One of the biggest surges in the New York market happened immediately after 9/11.  After the terrorist attack, many home buyers took a stand against terrorism by purchasing even more homes in the beginning of 2002. 

Our homes mean everything to us—not only do they keep us safe and provide us with shelter, but they also hold a some of our favorite memories.  However, if you or your home ever undergoes a natural disaster, there are a few steps to take to alleviate the problem:

• First and foremost, take safety precautions.  Keep in mind that the water flowing into your home may be contaminated and should not be used until advised so.  Be mindful of trees and other structures that could be unstable around your house.
• Secondly, seek medical attention if needed.  Make sure that emergency services are able to get to your house or provide them with a safe alternate route in order to get there.  Always keep in mind where power lines and bridges are located. 
• Next, safeguard your property.  Assemble your most prized possessions and find a safe place for them.
• Contact your insurance company.  Take the time to fully understand what your homeowners or renters insurance policy does and does not cover. 
• Next, contact your creditors.  Make sure that your creditors are fully aware of what has happened and provide them with a temporary address if possible. 
• Finally, it’s time to do one of two things—repair or relocate. 

Natural disasters are an absolute tragedy and cannot be avoided.  From hurricanes to tornadoes, floods to fires, earthquakes to eruptions, we never know what to expect from Mother Nature.  The best thing to do during a time of natural disaster is to remain calm and stay safe. 

Team Ohlde would personally send our condolences to those affected by Hurricane Sandy.  We know that your home is an important part of your life and that the uncontrollability of natural disasters can weigh heavy on our hearts.  Thinking and praying for all of those on the Northeast coast.

What is the 3.8% Tax on Investment Income?

It’s enough of a shock that 2012 is nearing its end.  Where did the year go?  As we finish up the last few months of this year, it’s important to note a new tax that will go into effect on January 1, 2013.  It’s a brand new 3.8% tax on some investment income—and trust me, it’s a bit complicated.

How will this new tax affect your day-to-day life?  What should you prepare for?  And what do you really need to know about the 3.8% tax on investment income?  Team Ohlde is here to answer all of your questions.

What is the 3.8% tax?
It’s a misconception that the 3.8% tax will be imposed on all real estate transactions.  That is not the case.  In fact, the tax that will begin on January 1, 2013 will impose tax on “unearned income” such as investments, rental income and home sale profits over a certain exemption amount.

Myth vs. Fact
Recently, MSN Money put together a list of myths and facts about the 3.8% tax.  Read on to find out what’s true and what’s false:

• MYTH:  Tax will affect all homes or even most home sales.  FACT:  It is not a tax on total sales price.  It is also not a sales tax. 
• MYTH: The National Association of Realtors is working to get the tax repealed.  FACT: The association, instead, is trying to counteract what people call “grossly inaccurate” rumors about the levy.
• MYTH: The tax will only affect the very rich.  FACT: In some circumstances, the tax could affect people who are not considered extremely wealthy.  

Does the 3.8% tax apply to everyone?  
No—in fact, the tax will only fall on individuals with an adjusted gross income (or AGI) above $200,000.  It also affects couples filing joint returns with more than $250,000 AGI.

Why is the 3.8% tax going into effect?
In 2010, Congress passed the 3.8% tax in order to generate an estimated $210 billion (over 10 years) to help fund President Barack Obama’s health care and Medicare overhaul plans.

So how will this affect me?
As mentioned earlier, the 3.8% tax will only affect those with over $200,000 AGI (or $250,000 AGI for couples).  In addition, it will only tax income from interest, dividends, rents and capital gains.  To view various scenarios of how this could potentially affect you, please read The 3.8% Tax: Real Estate Scenarios & Examples, distributed by the National Association of Realtors.  The brochure will give insight to those looking for more information on capital gain, securities, rental income, sales of second homes, etc.

What should I do?
If you think you (or even your parents) could be subject to this new tax, it might be smart to sit down with a tax professional to talk about alternatives. Consider closing a home sale before December 31, 2012—or selling investments that could trigger the tax—that could save some money.  The best next step is to meet with a tax professional to determine if action is necessary.

What is the real estate industry’s view on the tax?
As a matter of fact, the NAR expressed strong objections against the tax when it was first proposed in March of 2010.  Legislation decided to pass the tax due to the party line vote.  It's not true that the National Association of Realtors is working to get the tax repealed. In fact, the association has been trying to counteract what a spokeswoman called "grossly inaccurate" rumors about the levy.

Which Home Appliances Are Worth Upgrading?

With buzz words like “energy efficiency” and brands like Energy Star are concepts often heard by homeowners, yet many are left wondering: which of my home appliances are actually worth upgrading?  Is upgrading my appliances a waste of time or something I need to look into?  How much will it cost to upgrade my appliances?

The questions go on and on...and sometimes the answers are not easy to find.  Lucky for you, here at Team Ohlde, we know exactly which appliances are most important to upgrade in your home.  Many appliances have made huge strides in the energy-saving world.  Others, like small appliances, just aren’t worth upgrading all together.  But did you know that 13% of your household’s energy costs come from appliances?  Cutting your appliances energy usage will often save you money over time!

My advice?  Upgrade the following appliances:

1. The Air Conditioner
We are all well aware that air conditioners tend to be very energy inefficient (especially in the summer!).  Today’s modern retail air conditioners usually uphold a 10 EER rating (the higher the number, the more efficient it is), when 10 year old air conditioners rate at about a 7 EER.  New Energy Star air conditioners usually run for about $220.00 when an Energy Star central air conditioner could run over $3,000 with installation.

Want a lower bill without investing in a new more energy efficient air conditioner?  Simply replace the filters, clean the coils or manage the ducts—you’ll see your bill go down in no time!

2. The Furnace
Moving on to the opposite of the air conditioner—the furnace.  Typical furnaces are measured in one of three ways: low efficiency, mid efficiency and high efficiency.  What’s the difference?  Higher efficiency models have ways to store and exchange heat while less efficient models do not.  Replacing your furnace with an Energy Star furnace will cost about $1,400.

3. The Dishwasher
A typical dishwasher usually uses about 10 gallons of water per cycle!  Thanks to Energy Star, however, modern, efficient dishwashers only use 5.8 gallons of water per cycle.  Plus, Energy Star dishwashers tend to be quieter and clean a little better.  Invest $550 in a new efficient dishwasher!

4. The Refrigerator 
The refrigerator is the appliance that has made leaps and bounds when it comes to energy efficiency.  The standard refrigerator now uses 40-60% less energy than it previously did in the 1990’s!  The average cost of a new refrigerator is about $1,100, but you can save up to $200 a year by upgrading!

Bouns!  Be sure to buy a fridge with a freezer on top.  It may seem old school, but it’s more efficient than the side-by-side models!

5. The Washing Machine
The final appliance on our list is the washing machine.  This machine has made vast improvements in the last few years—especially in its features.  Newer washing machine models now boast front-load clothes washers which use around 50% less water and 37% less energy than top-load models.  The average price of a new Energy Star washing machine is $750 and you can save over $135 a year with the upgrade!

When it comes to appliances, many of us do not upgrade until the machine breaks or is just too old to get the job done.  But now’s the time to consider upgrading your appliances not only because it may be breaking down, but because it could save you money in the long run (not to mention, it saves the earth!).

The Ins-and-Outs of First Time Homeowner’s Assistance

You’ve got the car, you’ve settled into your job and you feel like you’re finally ready to settle down.  What’s next?  Now it’s time to buy a house!  Owning a home for the first time a rewarding, yet complicated process that can be drastically simplified through first time homeowner’s assistance.  But what is this assistance all about, who qualifies and how can you get it?  Team Ohlde is here to help you investigate.

What’s First Time Homeowner’s Assistance All About?

First time homebuyer programs, such as The Johnson County Housing Services First Time Homebuyer Program, are designed to assist low-to-moderate income people who have been employed for at least two years in a certain area with the purchase of a home.  Programs such as Johnson Country’s are made possible through a HOME grant, which are given by the US Department of Housing and Urban Development.

Who Can Get It?

If you’re interested in first time homeowner’s assistance, you must fit in the following four categories:

1. Has never owned a house, or as not owned a house in the past 3 years OR
2. Is a single parent who is unmarried or legally separator with one or more minor children for whom the individual has custody or join custody, or is pregnant
3. Is a displaced homemaker who is an adult who has not worked full-time for a full year in the labor force for a number of years, but has, during such years, worked primarily without remuneration to care for the home and family; and is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment
4. Has an income less than the income limits displayed on this chart.

What’s Required?

If you’re interested in a first time homeowner’s assistance, you not only have the fit the bill, but you have to be dedicated too.  It’s not an easy process, but it could be worth it in the end.  The program will require the homeowner to:

1. Live in the newly purchased home for at least five years
2. Complete mandatory homeowner training including homeownership counseling sessions
3. Use the home as a primary resident
4. Occupy the home within 30 days of loan closing
5. Have more than 30% liquid assets of total purchase price of home
6. Have a down payment equal to 1% of the sales price (or $500)
7. Stay under 41% of gross income for Total House Payment (PITI) plus recurring debt

What Does the Program Entail?

The program seems a little complicated at first.  We’ll help you break it down to make it a bit simpler.  Each first time homeowner’s assistance program is different, so we will use Johnson County as a primary example:

• Down payment and closing cost assistance not to exceed $10,000 in the form of a deferred loan will be provided on behalf of the qualified participant. 
• The home must be purchased in Johnson County.
• The home must be inspected by Johnson County Housing Rehabilitation Specialist and pass all Housing Quality Standards.
• The home must go under an environmental review by the Johnson County Housing Services office.
• For homes build before 1978, a lead-based paint report must be submitted to Johnson County Housing Services with the real estate sales contract.
• Buyers of properties located within 2,500 feet of the Johnson County Executive Airport are required to execute an affidavit acknowledging that they are aware of the proximity to the airport.
• A fixed mortgage rate of 15-30 year term.
• Interested rate cannot be more than 1.5% over FHA rate.
• Participant must purchase Private Mortgage Insurance (PMI) – if lender requires.
• Purchase price must not exceed $204,250 (HUD guidelines). 

So...What Can I Get!?

There are a lot of options for first-time homeowners!  These include single-family homes, condominium units, townhouses, cooperative units and manufactured houses with lots. 

Sign Me Up! How Can I Get Started?

To apply for a first time homeowners assistance program in Johnson County, please click here and fill out the application and send to:

Johnson County Housing Services

12425 West 87th Street Parkway, Suite 200

Lenexa, KS 66215

Good luck with the purchase of your first home!  Be sure to learn more at http://hsa.jocogov.org/housing/fthba.shtml#a.  To learn even more about first time homeowner’s assistance or to start your home search right now, be sure to contact Team Ohlde and visit us online at http://www.overlandparkhomesbytoddohlde.com.