Replace It Anyway

If it’s not broken, why would a homeowner consider replacing something as expensive as a toilet when there may be other things in the home to replace that provide more aesthetic appeal? Don’t be too quick to ignore the functionality and the reliability of this basic convenience.toilet.jpg

The first rationalization might take place at the economic level. A water-saving model could easily pay for itself in a few years, and then there is the good feeling of participating in the conservation of our natural resources.

Having to plunge a toilet more than once a week could motivate a homeowner to spend money on a replacement, especially if having made repairs to the flapper and fill valve didn’t solve the issue.

Maybe your existing toilet has ugly scratches that make it difficult to clean. Maybe there are cracks in the tank or bowl that you’re concerned will develop into a leak at the worst possible time.

The average cost to replace a toilet is around $400 with models ranging more and less based on the features and brands. Round toilet bowls tend to take up less room, are less expensive and better suited for children. Elongated bowls generally take more room, have more powerful flushing action, are more comfortable, more stylish, and cost more.

Replacing the shut-off valve for the toilet could be a good thing to do while you’re replacing the toilet. Generally, it is as old as the toilet and having a reliable valve that works could be very convenient at the point of a future repair or emergency.

There are a variety of videos on YouTube that could give you the confidence to do it yourself or simply to have a better understanding of the scope of the project.

A final note: One of the more common toilet-related repair issues is a leaking wax ring that sits between the toilet and the waste line the base of the toilet fastens over. That is a separate issue from any need to replace the toilet itself, but since the toilet has to be unbolted and moved for that project anyway, it could be an opportune time.

Before You Leave Town…

Along with all the planning of what you’re going to do and where you’re going to stay, consider this checklist to make you feel more comfortable while you’re away from home.

  • Ask a trusted friend to pick up your mail, newspaper and keep yard picked up to avoid an appearance of not being at home.
  • Stop your mail (USPS Hold Mail Service) and your newspaper.29938746-250.jpg
  • Don’t post about your trip on Facebook and other social media until you return; some burglars look for this type of announcement to schedule their activities.
  • Do notify police or neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.
  • Light timers make it look like someone is home. Set multiple timers for various times to better simulate someone at home. There are plug-in modules for lights and appliances that would allow you to control them from your phone while your out of town.
  • Do unplug certain appliances – TV, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.
  • Don’t hide a key; burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may help protect your belongings while you’re gone while adding a level of serenity to your trip.

Owning Makes More Sense

When comparing the cost of owning a home to renting, there is more to consider than the difference between a mortgage payment and the rent currently being paid. The mortgage payment very well could be lower than the rent, but when you consider the other benefits, owning could be much lower cost than renting.31066694-250.jpg

A portion of each mortgage payment is reducing the principal balance and building equity for the owner. Similarly, the home appreciates and also adds to the equity increase over time.

There are additional expenses for owning a home that renters don’t have, like repairs and possibly, a homeowner’s association. To get a clear picture, look at the following example of a $300,000 home with a 3.5% down payment on a 4.5%, 30-year mortgage.

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The total payment is $2,264 including principal, interest, property taxes, property and mortgage insurance. However, when you consider the monthly principal reduction, appreciation, maintenance and HOA, the net cost of housing is $1,218. It costs $1,282 more to rent at $2,500 a month than to own. In a year’s time, it would cost $15,000 more to rent than to own which is more than the down payment and closing costs to buy the home.

With normal amortization and 3% annual appreciation, the $10,500 down payment in this example turns into $112,00 in equity in seven years. Check out your own numbers using the Rent vs. Own or call me at (316) 337-5154. Owning a home makes sense and can be one of the best investments a person will ever make.

A Word Homeowners Need to Understand

Acquisition Debt is the amount of money borrowed used to buy, build or improve a principal residence or second home. Under the new tax law, mortgages taken after 12/14/17 are limited to a combined Acquisition Debt total of $750,000 on the first and second homes. The mortgage interest on this debt is tax deductible when itemizing deductions.12844696-250.jpg

It is a dynamic number that is reduced with each payment as the unpaid balance goes down. The only way to increase acquisition debt is to borrow money to make capital improvements.

Prior to the new law, homeowners could additionally borrow up to $100,000 of home equity debt for any purpose and deduct the interest when itemizing deductions. Mortgage interest on home equity debt is no longer deductible unless it is for capital improvements.

Acquisition debt cannot be increased by refinancing. Some confusion occurs because mortgage lenders make home loans to be repaid according to the terms of the note and using the home as collateral. But, that alone does not qualify a mortgage as tax-deductible.

Another thing that adds confusion to the issue is that lenders annually report the amount of interest paid, but only the amount that is attributable to acquisition debt is deductible.

Even if the interest on a cash-out refinance is not deductible, it may be advantageous to replace higher interest debt such as credit card debt with lower interest mortgage debt.

It is the responsibility of the taxpayer to know what part of their mortgage debt is deductible. The challenge becomes more difficult after a cash-out refinance. Homeowners should keep records of all financing and capital improvements and consult with their tax professional.

Unexpected Expenses

It’s common for Sellers to consider offering a home warranty or protection plan to make their home more marketable. A growing number of homeowners are now purchasing this type of protection for themselves to limit the unexpected expenses of repairs and replacements.34399062-250.png

A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience of being connected with a qualified service provider as well as minimizing the cost of the repairs or replacements.

There are a variety of companies that offer home warranties and the coverage may differ, but the majority cover heating and air condition systems, water heaters, most built-in and some free-standing appliances, and electrical and plumbing items. Coverage may also be available for specialty items like pool and spa equipment.

Some investors are even placing this coverage on their rental properties to limit the amount of repairs during the year. It’s a viable way to manage financial risk and the stress of dealing with unexpected breakdowns and expenses.

Call me at (316) 337-5154 if you’d like a recommendation of available programs.