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Green Home Trends: From Baby Steps to Extreme Updates

Posted: 11 Apr 2012 07:25 AM PDT

Recycling is one thing, but a composting toilet? That’s when you know you’re taking the going-green trend to its, um, “natural” conclusion.

While many home owners and builders are beginning to make changes to homes to incorporate eco-friendly products and materials, these are just the bud of the going-green trend. To really get the low-down on what the seriously green-minded homeowners can do to help the cause, we’ve rounded up a list of fixes that can be done in a house, whether it was built in 1912 or 2012.

Update your bulbs

You’re going to have to change out your standard incandescent bulbs eventually. This year marked the first stage of phasing out 100-watt incandescent bulbs under the CLEAN Energy Act, but 70-, 60- and 40-watt bulbs are next on the chopping block. Switching to compact fluorescent lights (CFL) or LEDs not only conserves significant electricity, but significant savings as well — more than $57 over the life of the CFL, one report found.

Energy-star appliances

One of the simplest ways to upgrade your home in a green way is to purchase an energy-saving appliance. The best bet is to find one that earns the government’s “Energy Star” rating. The appliances are designed to reduce greenhouse emissions as well as your energy usage over time. Many products can mean tax rebates for your green efforts.

This Alameda home for sale (below) includes all energy-saving appliances in the kitchen.

 

Reuse rain water

The simplest place to reuse rain water? In your garden. By installing an affordable rain barrel that catches runoff from your roof or gutters, you can save enough rain to water your lawn or growing spring garden.

Get geothermal

Even if your home state is plagued by cold winters or blistering hot summers, did you know that below the frost line the ground stays about the same temperature year-round? By tapping into this, you can cool or heat your home in a very eco-friendly way. This isn’t a way to create electricity, but rather reduce the amount of energy you use to maintain your home’s temperature. Installing a geothermal system isn’t cheap (estimates range from $11,000 to $30,000 for a 2,000-sq ft home), but with tax incentives and significant energy bill reductions, the savings are incredible. If you plan on being in your home for a long time, it could be worth it and perhaps add to your home’s re-sale value.

Solar panels

Solar energy has been powering calculators for years, but it’s only recently become more common in homes due to a drop in costs of installing a solar energy system. While powering your home using solar energy still isn’t cheap, it’s one of the few ways a homeowner can “live off the grid” by storing extra energy in batteries. The other option is to continue a connection to the utility grid, buying the power you need and selling the power back when you produce enough on your own.

Ground mount solar panels make this home for sale in Shingle Springs, CA (pictured below) very energy efficient.

Reuse gray water

The EPA estimates that an average family of four uses 400 gallons of water every day. While not all that water can be reused, gray water, which is water from your sink, laundry, but not contaminated by waste (i.e., not toilet water) can be recycled. While not as common as some other green home features, gray water recycling systems take the water from your morning shower or from yesterday’s washing machine cycle and filters it for reuse in your toilet or your garden.

Composting toilet

There’s green. Then there’s really green. Even a home completely “off-the-grid” won’t necessarily have a composting toilet, but when installed properly, a composting toilet is the final nod to going green. A composting toilet will break down the waste through natural decomposition — the only thing needed is the right temperature (about 65 degrees) and enough oxygen.  However to keep this environment, some key things need to be monitored, which may be more effort than most people are interested in.

Composting toilet - Flickr user redjar

  

 

Planning For You

Some clients are looking at down sizing for lower maintenance, having fewer steps to climb, etc and wondering how to finance.  If looking at bridge loans, equity based products, or reverse mortgages please allow me to help supply information and put them in touch with the right people. 

 

There are investors who have always done their own property management, but may need an alternative in the future.  A 1031 exchange into tenants in common property with a triple net lease situation might be appropriate.  This still provides monthly income, appreciation, and a depreciation deduction. 

 

If rents are not increasing cash flow every year, it may be time to exchange the property into one of the tenants in common situations that have an escalator clause.  Rent obsolescence should cause a 1031 exchange to be evaluated.  This obsolescence should also take neighborhoods and appreciation into account.

 

If an investment property has been held for five, ten fifteen years or more the cost basis used for depreciation should be evaluated.  There are times when increasing the tax deduction for depreciation as a result of a 1031 can mean a major tax savings.

 

Using real estate in a self directed IRA is becoming more common.  Compare real estate with other investments over different time spans and it is obvious that there is a place for it.

 

Investors or owners wanting cash for something else have several tools that may help.  Second homes and vacation homes also can be exchanged. 

 

When considering an irrevocable trust, far enough ahead of time, some of the preceding could come into play prior to the Medicaid look back period.

 

Many investors exchange out of a single family rental, duplex, or any other type of investment property and into a vacation/second home. Many tax/legal advisors believe it is possible to perform an exchange on a vacation property which has no rental history but can be considered held for investment.

 

REMODELING YOUR HOME:  HOW MUCH IS TOO MUCH?

 

     The classic way for homeowners to increase the value of their house is by remodeling existing rooms or adding on to its current plan.  Updating and remodeling need to be balanced against what the market is for the house you want to create and what the cost is.  I can provide market information and a CMA for your house as is and for what you are working toward.  It is attractive to have multiple cash flows as a result of tenants.  It may also be practical to remodel your sister's house to accommodate both of you.  I can help or refer you to those that can.

Some choose to build recreation rooms and studies while others add new appliances, fixtures and cabinets to enliven rooms and make their home more attractive to future buyers.  But, when should you decide to stop sinking money into a home and buy a bigger place?  And how much rehab is too much when it comes time to recovering remodeling costs through a home sale  For instance, if you’ve just spent $1,000 remodeling your living room and didn’t expand your small bathroom, the chances of increasing the number of interested buyers are slim.

     With these concerns in mind,  sales associates offer a few tips for those struggling to add value to their home.

     First, always protect the character of your home. Nothing sticks out more than a new addition that is in a completely different architectural style.  Be consistent.  Recognize your home’s character and stay within its framework.  The most financially rewarding areas to remodel are usually the kitchen and bath.  Newly re-done cooking spaces and cabinets can attract more buyers and may command a slightly higher price for the home than a comparable one on the market.  Simple repairs that are made to last will bring you the biggest returns upon sale.  Enlarged bathrooms are the most popular attraction for new home buyers, according to the National Kitchen and Bath Association.  Today, the most popular additions for younger buyers are sunken whirlpool baths and showers.  But be sure to install modest, solid amenities.  It’s easy to quickly over-spend on bathroom fixtures.  Buyers are, by convention, more interested in above-ground living space – not basements, yards and walkways.  Swimming pools can be a poor investment if installed for the sole purpose of increasing a home’s value; it’s rare that a pool’s cost will be recovered in a home sale.  It can also be a negative feature for potential buyers with very young children.  Replacing worn carpeting, tiles and wood floors can give your home an immediate advantage over similar properties in the area.  Updating paint colors in all areas of your home can also prove beneficial.

     However, it’s recommended that you use neutral colors, such as gray, beige and off-white when adding new floor and wall coverings.  Fewer buyers will then turn away because of differing tastes.  Stay simple with your remodeling and look at your home as though you were the buyer.  Chances are that if you find the upstairs bedroom could be brightened by a larger window, potential buyers will probably feel the same.  Don’t go overboard.  Concentrate on improving two or three deficiencies in your home.  More than likely, the time and money you spend adding quality to your home will be rewarded with greater profit at selling time.

 

 

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