6 Types Of Reserves, Homeowners Should Create!

Many people are attracted, to be participants, in the so – called, American Dream, and own a home, of their own! As a Real Estate Licensed Salesperson, in the State of New York, for over 15 years, I have witnessed, many under – prepared, homeowners, who end – up, being, House – Rich, but financially – poor! This, often, occurs, because, they lack the necessary knowledge, to prepare, effectively, and thoroughly, regarding several key realities, associated, with home ownership! Although, many realize, they will need, to have, sufficient funds, for, the down – payment, and Closing Costs, many, don’t consider, and properly, prepare, for other, financial necessities. With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 6 types of reserves, smart homeowners, should create, and prepare for.

1. 6 months Mortgage payments: Doesn’t it, make sense, to be prepared, for whatever, life, brings us, and have, at least, 6 months, worth of mortgage payments, put – aside, and readily available? Contingency planning is the smartest approach!

2. Reserve for Unforeseen contingencies/ occurrences: While, we realize, we will have to, at some point, replace appliances, roofing, etc, we often, fail to consider, to prepare for potential, unsuspected occurrences! What, if, one needs, for example, to pay for damage, which exceeds, insurance coverage, as well as meet the deductibles? There are many examples of these types of possibilities!

3. Appliances Reserves: Don’t be surprised, when you need (or want) to replace some appliances, such as refrigerators, dishwashers, ovens/ stoves, washer, dryer, etc! It is wise, to have a reserve, ready, when this happens!

4. Major system reserves: The major systems of a house, include: HVAC (heating, and air – conditioning); plumbing, roofs, sewers, etc. Often, this may bring, larger, than anticipated, expenses, which should be planned – for!

5, Repairs: The difference, between repairs, and renovations, is, often, the latter, is voluntary, while, the former, may not be, expected! Some repairs, may, be minor, while others, might be major! Homeowners often, find the need to repair, items, such as, plumbing leaks (pipes, toilets, etc), exterior damages (including entrance – ways, walk – ways, etc), periodic painting (interior and exterior), roof repairs, etc.

6. Upgrades/ renovations: People often want to upgrade certain parts of their home, especially, the kitchens and bathrooms! This includes: kitchen cabinets; replacing floors and counter – tops; bathroom vanities; whole – house painting/ re – flooring/ carpeting, etc. Some decide to renovate areas, including: enlarging/ expanding, etc.

Smart homeowners prepare, so they can reduce stresses, by, having funds available, when needed. Using specific, dedicated, reserves, is often, a wise process, etc!

Computers and Cheap Watches

There are tons of expensive watches out there that cost hundreds or even thousands of dollars. The majority of these watches are all classic, mechanical pieces that have so many features it makes telling time incredibly difficult. What is the point of spending all that money for something that is not even going to serve the intended purpose? That is why one should greatly consider computer powered, cheap watches, also known as digital watches.Although many digital watches have a very low cost, there are many out there that can be almost as expensive as traditional watches. If you want a watch to look classy, then there is no point in shelling out tons of cash for a good looking digital watch, so those should be avoided. If you want to save money, then a digital watch is perfect for you. You can get a fairly decent digital watch for between twenty and fifty dollars, and there are some out there that are as low as ten dollars, but the quality of said watches is very low.Digital watches are great because they cost so little and serve the purpose of a watch exceptionally well. With a traditional watch, it can be somewhat difficult to tell the time, at least at a moment’s notice. Digital watches enable you to look quickly down at your hand and know the time right to the second, as long as the time you set it to is accurate.As computers and technology become more sophisticated, so will digital watches. Already at this point in time, there are many watches that have features that used to be found only in decades old computers. Thinking about that, it is amazing to think how far we have progressed. Who knows, perhaps we will be playing three dimensional games on our watches in just a few years. With the way things are going, that is not too far out there.

How to Claim Home Improvements on a Tax Return

Did you know that home improvements qualify for deductions on your Federal taxes? Due to current market conditions and the downturn in the real estate markets many homeowners are opting to improve the existing home over upgrading to a new home. These home improvements most likely qualify as deduction on your taxes and can be used to reduce the amount you owe on your annual taxes.What Home Improvements Qualify for Tax Deductions?Any home improvement which is done for medical reasons such as elevators, ramps, raised sinks and door widening may qualify for a tax deduction. With proper documentation as to costs involved you can recoup a percentage of your home improvement costs but without the right receipts you will have nothing to make a claim with.Improvements on your home related to energy savings may be eligible for tax credits and rebates both from Federal, State and local governments. In some states you can get as much as 25% of you total cost reimbursed to you for the installation of energy efficient heating and cooling devices. Home energy improvements are also beneficial for lowering your electric bills and additional savings over time. Improvements related to energy can add significant value to a home and increase the resale value as much as 15% or more in certain areas where power consumption costs more.What Home Improvements Do Not Qualify for Tax Deductions?As with anything from the government there are a number of requirements and limitations. One example is the difference between a home repair and a home improvement. Home repairs are generally not able to be used as tax deduction and the definition of repairs over improvement has caught more than one homeowner off guard in the past. An example of a home repair may be something like the replacement of a faulty roof or a broken water heater. An improvement would be something not necessary but which offers value in the long run.Be Careful And Don’t Get Carried AwayThe Internal Revenue Service has very strict requirements and standards on what can or cannot be claimed for tax deductions. Be sure to check with your tax accountant or financial advisor about what you can and cannot claim. We are general contractors in Florida and not tax attorneys but our experience has been that many homeowners will neglect to check what they can or cannot claim on their taxes and they often miss out on an opportunity to maximize their investment.There are limits on how much you can claim and the cost involved. For example building a wheelchair ramp with a covered path may seem nice but in most cases the tax breaks will be on the ramp alone and not the roof system. It’s not a necessary component to the improvement.Be aware of the many pitfalls and do your research before you make any decisions related to your finances. Tax deductions for improvements are a great way to reduce your total tax debt as long as they are done correctly.