New Houses vs. Old: How Do You Know Which is Right for You?

Finding your perfect home is not always as easy process. With the surplus of homes for sale in most cities, buyers may find there are many properties –both new and old – that meet their search criteria. Choosing whether to renovate an old house or buy a new one can be a tricky decision for some.

ImageShould I Completely Renovate an Old House or Buy a New House?

When deciding on which type of house is right for you, it’s important to take into consideration the following factors:

Style – For many, the allure of an older home is its character and uniqueness. Many of the homes being built today are tract houses that lack personality and quality of construction. An older home will have the charm that many buyers are looking for, rather than being a “cookie cutter” model that someone else has. However, they require a lot of TLC that many buyers aren’t cut out for. Knowing whether to choose an old house or buy a new one largely depends on your style preferences. Do you prefer clean lines, open concepts and a modern look, or are you into a more traditional floor plan with closed rooms, built-ins and nooks?

Lifestyle – Think about how you like to spend your free time. Do you enjoy working on projects, building or creating things at home? Or would you rather spend the evenings and weekends outside of the house, traveling, hiking or shopping? If you answered the latter, an old house may not make sense for you in the long-term as they typically require more maintenance and care.

Resources – Aside from the funds needed to purchase the home, do you have the budget and resources to update and maintain an old house? Even an older home that has been updated can be expensive to maintain due to scarce availability of certain building materials and original fixtures. Many buyers become “house poor” after making their down payment and buying a house. With no savings they have little budget left over for these house updates. If you don’t have the resources to dedicate to updating and maintaining the home, it may be a better choice to buy a new house. Newer houses typically need no initial repairs, no additional budget and are move-in ready.

Patience – Old houses have character, but maintaining that sense of charm doesn’t come easy. Unless they were recently updated, older homes require time and energy to restore. Because they were built in a different time period, older houses may require custom or hard-to-fit materials, appliances and fixtures that many contractors are not skilled in using. These material and construction delays can greatly extend your project deadlines.

Knowledge – Are you knowledgeable about construction and home improvement? Knowing how long restoration and maintenance projects will take and how much they will cost is a major prerequisite for purchasing an older home, especially if you’re planning to completely renovate an old home. If you’re tight on budget and resources, are you able and willing to do some of the work yourself?

An older home can be a quality investment with long-term potential and timeless style. A newer home can be a no-hassle, peaceful retreat that doesn’t require extra money or time to move in. If you do the right planning and homework ahead of time, you’ll be able to find the house that fits your needs, budget and lifestyle and relax, knowing you made the best decision in choosing your new home.



Should I Sell or Rent My Home? A Quiz to Help You Decide

To sell or to rent. It’s a tricky question, especially in a down market. If you are relocating or just ready to move on from your ball and chain of a house, renting might make more sense than selling. Here is a quiz to help you decide whether you should sell or rent your home.

Can You Afford to Sell Your Home?

Here’s an example of a situation where a couple had to examine how affordable it was for them to sell their house. The couple knew they wanted to move to a new home, but they live in an area of Florida where houses have halved in value since the peak in 2006 – the same year their house was purchased. As they debated whether to sell their home, they realized that if they chose to sell, they would be forced to take a $150,000 cash loss, not including closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home that then became their primary residence. When you rent, you may take a loss on a monthly basis, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit.

Can You Afford to Rent Your Home?

Research the going rents in your market using tools like the MLS listings and Look for comparable properties in your neighborhood or similar neighborhoods to get sense for what your home might bring in as a rental. It is important to take features like square footage, number of rooms and upgrades such as granite kitchen counter tops, location and proximity to desirable schools into consideration while looking for comps. You can also talk to real estate agents and property managers to get their take on pricing. If it turns out that you can’t cover your mortgage with the projected rent, then calculate how much of a loss you can take to still be able to afford to rent the house.

Do You Need Tax Deductions?

You can often take losses and costs from rental properties as tax deductions. In addition to deducting the cost of your mortgage beyond the rental income, landlords can often deduct all expenses associated with the rental, including property management and maintenance fees. Consult your accountant to ensure that you know what the costs and benefits will be from a tax perspective before you make the decision to rent rather than sell your home.

Can Your Credit Take the Hit of a Short Sale?

If you don’t mind sacrificing your credit score for a few years, you can’t afford to rent and you really need to get out of your house, then a short sale is always an option. A short sale is a real estate transaction in which the bank agrees to accept less than the amount owed on the mortgage to release the owner from their financial obligation. For example, if the mortgage on a home is $200,000 and a buyer makes an offer for $150,000, the bank may accept this offer and forgive the additional debt. Besides mucking up your credit, a short sale can also contribute to your tax bill. Often, the forgiven amount (in this case, $50,000) can be added to your tax bill as taxable income. It is important to consult a lawyer or accountant so that you know the details of how a short sale will impact your taxes and your credit before you move ahead.

Should You Sell or Rent Your Home?

Depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.


It’s the Law!

Are you aware that you’re required by law to have a carbon monoxide alarm in your home? The Carbon Monoxide Poisoning Prevention Act was passed by the State Legislature in May 2010 making approved carbon monoxide alarms (CO alarms) mandatory for all California residents.

As of July 1, 2011, all single-family dwelling units with an attached garage or a gas heater should have installed a Carbon Monoxide alarm within the home and all other dwelling units have until January 1, 2013 to comply. What is the definition of a dwelling unit? Generally, a dwelling unit is where you sleep! It is a single-family dwelling, duplex, lodging house, dormitory, or dwelling unit in a multiple-unit dwelling unit building meaning any place where people live is covered under the law.

What is Carbon Monoxide (CO)? Known as the “silent killer”, this colorless, odorless, and poisonous gas kills approximately 500 people and sends nearly 20,000 more to the hospital each year. CO is naturally produced from heaters, fireplaces, furnaces, and many types of appliances and cooking devices when fuels burn incompletely,  which is why proper ventilation is imperative when using these devices. Carbon Monoxide poisoning is avoidable and preventable if each home takes the necessary procedures and remembers these keys to safety: Inspect, protect, and detect.

  • Inspect your fuel-burning appliances at home such as furnaces, hot water heaters, and stoves that require yearly maintenance.
  • Protect your family by obeying the law and purchasing an approved Carbon Monoxide alarm. Alarms that are approved by the State Fire Marshal can be found at:
  • Detect! If your alarm detects any sign of Carbon Monoxide immediately escape outside with your family and dial 9-1-1.

Carbon Monoxide alarms should be installed outside the sleeping area in a dwelling to alert occupants in an emergency. Smoke alarms/detectors and Carbon Monoxide devices are required by law and should be inspected regularly.

For more information regarding the new Carbon Monoxide Poisoning Prevention Act, visit the State Fire Marshal’s website, or contact the Corona Fire Department at (951) 736-2220. Take steps to avoid the “silent killer” and ensure the safety of your family by installing a carbon monoxide alarm today.

For Your Information
With lots of rich foliage and tiny white flowers, the spider plant is easy to grow as well as benefiting its owner with its ability to absorb benzene, formaldehyde, carbon monoxide and xylene.