We make 0k per year and live in a 3-room HDB flat. Should we save to buy an investment property, upgrade to a condo, or larger flat?, Lifestyle News

We make $180k per year and live in a 3-room HDB flat. Should we save to buy an investment property, upgrade to a condo, or larger flat?, Lifestyle News

by Investment Property

Hello,

We’ve read with interest on your advice columns, and we especially appreciate the effort and detail put into the responses.

My wife and I are in a bit of a dilemma. 

We live in a 3-room HDB flat in Clementi Ridges which we bought for close to $400k. Our MOP is up in April this year. We’re in our mid-30s and together we make $15,000 gross a month, with no debts other than our HDB loan. We don’t plan to have kids.

Our goal is to have a retirement nest egg; the question is how best to go about building it. We’re not sure if our next move should be to:

(1) Upgrade to a freehold condo – we’re only interested in one located in Districts 9, 10, 11, 20, or 21;

(2) Save up to buy an additional investment property; or

(3) Upgrade to a larger HDB through resale/2nd BTO.

Sincerely hoping you could share some insights to help in our decision-making. Thank you very much!

1) Outstanding loan – $238,000

2) CPF used plus accrued interest – $128,000 from me + $36,000 from my wife

Hi there!

Thanks for reaching out to us!

It’s always good to start the retirement planning process early, as there is a lot you can do to build that nest egg from now till then. With so many possible pathways to take, it can be difficult to decide on the best option.

We will do our best to shed some light on the possibilities and hopefully, it will make your decision-making process a little easier. Let’s start by looking at affordability.

Affordability

These are some of the recent 3-room transactions for Clementi Ridges:











Date Block Level Size (sqm) Price
Oct 2022 312B 19 to 21 69 $615,000
Sep 2022 312A 19 to 21 69 $660,000
Sep 2022 312B 16 to 18 69 $660,000
Aug 2022 312A 13 to 15 69 $608,000
Jul 2022 312A 13 to 15 69 $565,000
Jul 2022 312A 13 to 15 69 $638,000
Jul 2022 312A 22 to 24 69 $642,800

Source: HDB

We will use the average selling price of $626,971 for calculation purposes.








Description Amount
Selling price $626,971
Outstanding loan $238,000
CPF used plus accrued interest $164,000
Cash proceeds $224,971

Affordability (For a private property)










Description Amount
Maximum loan based on a fixed monthly income of $15K and ages 35 $1,728,055 (30 years tenure)
CPF funds $164,000
Cash $224,971
Maximum affordability based on CPF and cash of $388,971 $1,555,884
BSD based on $1,555,884 $46,835
Estimated affordability $1,509,049

Due to the available amount of CPF and cash that make up the 25per cent downpayment, you will not be able to take the maximum loan

Affordability (For an HDB)










Description Amount
Maximum loan based on a fixed monthly income of $15K and ages 35 $852,536 (25 years tenure)
CPF funds $164,000
Cash $224,971
Total loan + CPF + Cash $1,241,507
BSD based on $34,260
Estimated affordability $1,207,247

Option 1: Upgrade to a freehold condo in D9, 10, 11, 20 or 21

With a budget of $1.5 million, you’ll most likely be looking at a 1 + Study or a two-bedder in these locations. As you do not plan to have children, this should suffice but as most of these units are rather compact, it may take some getting used to from a 3-room HDB flat which is typically bigger in comparison.

If you were to do a quick search online, you’ll see that the current pickings are rather slim, and the majority of the developments that fall within this price range are boutique projects.

District 9 District 10 District 11 District 21

The developments shown above are those with available units that match your affordability. You’ll notice that after the launch, their transaction volumes are generally low, resulting in the trend lines appearing somewhat volatile. This is a usual concern with boutique developments because if the turnover rates are low, it is difficult for prices to move since banks value a property based on recent transactions. You can see from the graphs that prices are relatively stagnant for most of the projects, as compared to other freehold condos in the same district.

Also, many of these developments are made up of predominantly one and two- bedders which are catered more towards investors since the barriers to entry are lower. This is another issue as investors usually go wherever the money is, so if they find a better investment opportunity, they are less hesitant to let go of their units (even at a loss). This differs from genuine homeowners, who may be emotionally attached to their properties. It is advisable to get a development with a good unit mix, which caters to both homeowners as well as investors as prices are generally more protected.

Compared to an HDB flat, these projects are usually a better potential store of value. This is especially so in the long run as there is no lease decay issue. But if you’re looking for capital appreciation in the short to medium term, these may not be the best options.

That being said, we do believe there is potential for growth in the CCR provided you select the right properties.

Property Price Index (PPI) of non-landed residential properties in the different regions











Price Indices Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 (Flash)
  QoQper cent change QoQper cent change QoQper cent change QoQper cent change YoY per cent change QoQper cent change QoQper cent change QoQper cent change QoQper cent change YoY per cent change
Overall PPI 3.3 0.8 1.1 5.0 10.6 0.7 3.5 3.8 0.2 8.4
Landed 6.7 -0.3 2.6 3.9 13.3 4.2 2.9 1.6 0.5 9.5
Non-landed 2.5 1.1 0.7 5.3 9.8 -0.3 3.6 4.4 0.1 8.0
CCR 0.5 1.1 -0.5 2.7 3.8 -0.1 1.9 2.3 0.5 4.6
RCR 6.1 0.1 2.6 6.7 16.3 -2.7 6.4 2.8 2.6 9.2
OCR 1.1 1.9 -0.1 5.7 8.8 2.2 2.1 7.5 -2.6 9.3

Source: URA, Propnex Research

Drawing from the Property Price Index (PPI) in the different regions, we can see that prices in the RCR and OCR have appreciated significantly more than in the CCR in recent years. We do expect that prices in the CCR will eventually right themselves and the growth rate will catch up. We have recently also written a piece about the narrowing gap between prices of new RCR and CCR projects, which you can read here.

If CCR prices pick up can we expect prices of these boutique developments to pick up too?

Option 2: Save up to buy an additional investment property

Given that you currently own a flat, which we assume is under both your names, and have an outstanding housing loan, there are several things to take into consideration when purchasing a second property.

Loan-To-Value ratio (LTV)

When purchasing your first property, depending on your income, you may be eligible to loan up to a maximum of 75 per cent of the property value (for a bank loan). However, if you’re purchasing a second property while still repaying an existing mortgage loan for the first one, the LTV drops to 45 per cent of the property value.

Higher downpayment

As the LTV for a second property is reduced, naturally the downpayment increases. The downpayment is split into two portions; minimally 25 per cent needs to be paid in cash and the remaining 30 per cent can be paid using your CPF should you have sufficient funds.

Additional Buyer Stamp Duty (ABSD)

The current ABSD rate for Singaporeans buying a second property is 17 per cent which is on top of the regular BSD. Do note that when purchasing a private property, the stamp duty has to be paid in cash first, as this has to be done within 14 days after you have exercised the Option to Purchase (which isn’t enough time to apply for the withdrawal from CPF), and if you have sufficient funds in your CPF to pay for it, the cash will be reimbursed to you afterward.

CPF requirements

When buying a second property, you will need to set aside the following before you can utilise your CPF funds for the purchase:

  • The latest Basic Retirement Sum (BRS) if you have at least one property bought using CPF or the property that you are buying can cover you till age 95*

  • The latest Full Retirement Sum (FRS) if you do not have any property that can cover you till age 95

* If you subsequently sell the property that can cover you till age 95, you will need to set aside the FRS instead.

Also, the maximum amount of CPF that can be used for your second property depends on whether the remaining lease of this property can cover the youngest owner up to the age of 95.

Source: CPF

Let’s say you were to purchase a second property at $1 million for the sake of simple calculations:









Description Amount
Purchase price $1,000,000
25per cent cash downpayment $250,000
30per cent CPF/cash downpayment $300,000
BSD $24,600
ABSD of 17per cent $170,000

As we can see from the calculations above, the cash outlay required in order to purchase a second property is pretty substantial and it will likely take a long time to save up.

We’ve written a detailed piece on the merits of paying for the ABSD for an investment property, but in short, it’s not what we’d typically recommend.

Option 3: Upgrade to a larger flat (resale/BTO)

Being able to buy a BTO is a Singaporean privilege, and since we have two chances at it, most individuals/households will try for the second time if they are eligible. Of course, it’s much tougher the second time around given that only two to five per cent of BTO launches are set aside for second-timers. Also, the income ceiling to apply for a BTO is $14,000 which your household has unfortunately (or fortunately) exceeded so you are no longer eligible.

As you’ve mentioned you’re looking to build your retirement nest, buying a flat may not be the best investment choice. It is no doubt a good stepping stone for buyers looking to upgrade since you’d likely make some profits if you bought a BTO, or if you purchased a resale and managed to gain from the CPF Housing Grants.

Source: Edgeprop

Given the reduced supply of newer MOP flats coming onto the resale market in the next couple of years, prices of HDB prices could still hold up in the short term. But even so, it is public housing after all; prices are regulated by the government in order to keep them affordable for the masses.

Alternative option

We’ve said this many times before, but a freehold property does not necessarily mean it’s better than a leasehold, and there are many other factors that contribute to the performance of a property besides its tenure. Perhaps instead of looking at freehold options in the districts you’ve identified, you can look at leasehold options instead, which will give you more choices to choose from. And if you were to open up to other locations, you’d have even more options.

These are some available 99-year leasehold units on the market that is within your affordability:









Project District Completion year Unit type Size Asking price
Sophia Hills 09 2018 2b2b 689 $1,482,000
The Panorama 20 2019 2b2b 797 $1,488,888
Thomson Impressions 20 2019 2b2b 764 $1,500,000
Sky Vue 20 2017 2b2b 678 $1,380,000
Daintree Residences 21 2023 2b2b 679 $1,399,999

These projects are picked out based on the fact that they are in your preferred districts, and for their age, so they may or may not be the most suitable for you. We would suggest you consult with an agent for further analysis.

In the ideal situation, you’ll stay in this property for the short to medium term and if it does appreciate well over the next few year, you can then upgrade again; perhaps to a bigger unit or a freehold development, which you can then live in for the longer term. You can eventually cash out for your retirement while you right size to a smaller unit.

Conclusion

Let’s do a quick recap of the options:

For the first option of buying a freehold condominium in District 9, 10, 11, 20, or 21, your choices are rather limited and the available developments are mostly boutique projects (which as mentioned, we do have some concerns over). You will have to pick carefully, as a freehold property definitely doesn’t always mean it will be a good investment.

The second option of saving up to purchase a second property for investment will require a huge cash outlay, which may take a considerable amount of time to save up for.

As for the last option of upgrading to a bigger HDB, unfortunately, your household is no longer eligible to apply for a second BTO due to your income. Regardless, buying an HDB is not the best investment tool given that it is after all a regulated market.

We will suggest looking at some younger leasehold developments that still have the potential for growth which will open you up to more choices. You can stay in this property while you wait for it to appreciate and from there, move on to a bigger unit or a freehold development where you can stay for the long term. As you’re only in your mid-30s, you’re able to maximise the loan tenure. We get that moving might be a pain, but it’s inevitable if you wish to cash out on your property which will go towards building your retirement nest.

ALSO READ: We make $15k per month and live in a 4-room HDB flat. Should we upgrade to a condo now once interest rates drop?

At Home: Beware the four most expensive words in home remodeling | Lifestyle

At Home: Beware the four most expensive words in home remodeling | Lifestyle

by Home Improvement

The moment all over again, even while I know much better, all those four tiny words, usually uttered in the throes of a property remodel, got me: As long as we’re remodeling the kitchen area, let’s update the visitor lavatory! Yeep!

That innocuous minimal phrase, “as extensive as we’re,” and its falsely implied benefit, also masquerades as the equally risky (and high-priced) 4 phrases: when we’re at it. …. After these humble phrases typically appear the words and phrases why don’t we, or we must, or let’s. Next point you know, your entire property is torn aside.

My husband and I had been reworking our kitchen area and had picked new stone for the counters. If you have under no circumstances done this, it involves acquiring slabs of the rock the sizing of freeway ramps. To steer clear of unseemly seams in your counters, you generally will need to get additional slab than you technically require, which indicates you are going to have pieces remaining. Sometimes huge pieces. Which you personal and will go to waste, unless ….

Legitimate to my Scottish blood, I could not abandon all that excellent bought-and-paid-for quartzite, but where by? How? Ding! The upstairs visitor tub!

Here’s the place the tailspin begins. When we acquired the Happier Yellow Household 5 decades in the past, I realized I desired to transform this Jack-and-Jill bathroom. Created with little ones in thoughts, the double-sink vainness was only 31 inches higher. Regular counter top is 36 inches.

Even I, at a towering 5’ 3” with sneakers on, truly feel like a basketball participant in that area. Because most of our guests are in excess of 4 feet tall, I preferred a normal-peak vainness with new counters. The present countertop was a molded marble-wanna-be product that flowed right into the sink basins. Great 20 a long time back, I suppose.

On the other hand, the considered of tearing out the outdated (scarcely made use of) vanity, finding a new a person, acquiring new sinks and taps, and pulling out the plated glass mirror that would want to go if the counter moved up, seemed daunting and pricey. By my mental estimate, which normally falls short, it rang in at all-around $5,000. So we did absolutely nothing.

Right up until, ding!

When the gal from the stone set up business arrived to measure for the kitchen area counters, she outlined the stone remnants.

Being aware of the potholes, cliffs and brambles that lay in advance, I nearly mentioned nothing, but just before motive intervened, the words and phrases had been out. “Just curious, would we have ample stone still left to do a rest room upstairs?”

“Let’s appear,” she claimed.

We stood there, two giants surveying the scenario. “You have far more than plenty of stone,” mentioned the counter gal, who has been executing this for 30 yrs.

“Builders do not do these kid-large sinks any more,” she added. “Kids improve up.”

Your weekly local update on arts, entertainment, and everyday living in Colorado Springs! Sent each and every Thursday to your inbox.

Results! Thank you for subscribing to our e-newsletter.

“Meanwhile, they can use a stool,” I mentioned.

Then, as if reading my head, she eradicated just one task obstacle following yet another. The exact same contractor who would be doing the carpentry get the job done in the kitchen area could get rid of the existing counter and increase the vainness to standard height. Her corporation could give new porcelain basins. We could reuse the present (yet again scarcely used) chrome taps.

This was beginning to make feeling, but the sinking issue remained. How considerably? She labored up a price. To make and set up the quartzite counters and backsplash, $850, like sinks. For the carpenter’s section, to eliminate the old counter and mirror, increase the current double vainness 5 inches, put in a new toe kick, and reconnect the faucets as soon as new counters were being in, $875.

My coronary heart was skipping. I necessarily mean, when was the final time a house style and design venture price tag much less than you believed? What is additional, I wouldn’t be destroying a flawlessly fantastic vanity or throwing away great stone. Moreover, I had equally the staff and the elements in hand. In this working day of supply chain delays and labor shortages, when that happens, you seize the minute.

I had only 1 hurdle remaining. “Honey?” I approached my partner. “As long as we’re …”

Getting on an supplemental home enhancement when you are in the center of a further just one can be a significant, high priced miscalculation. But not often. Here’s what to consider up coming time individuals four little text cross your head:

• You’ve assumed it via. Be watchful of producing impulsive remodeling moves. If the project is a single you’ve been pondering about and seeking to do, but the timing or value have not been right until finally now, look at going for it.

• Your know your expenses and scope of the extra challenge. Be confident you have a superior tackle on the labor and material expenses for your current project as very well as the new 1 in advance of you start in. So prices really don’t spiral, know just before you dedicate what you will have to have to invest in, what you can reuse, and who will do the work for how significantly.

• You have staff and materials in hand. A large upside to undertaking two projects at the moment is efficiency. Employees can do the perform at just one time. If you have trustworthy contractors all set to go, and the components are available, you could appear out ahead in time, cash and hassle.

• You can preserve disruption to a bare minimum. Feel two times just before tearing up far too much of your home at after. The inconvenience could possibly not be truly worth it, particularly if you have to move out.

• The improvement suits the rest of your household. Be positive the new update will combine with the rest of the household. Alterations have to have to harmonize or the new upgrades will appear out of place.

• The advancement suits with the relaxation of your community. If resale value issues, and it must even if you’re not organizing to transfer, then make positive your neighborhood can guidance your dwelling advancement. You never ever want to be the ideal residence on the block. Nonetheless, if every person all over you has up-to-date their a long time-previous kitchens but you, you might want to step up to satisfy market norms.

Marni Jameson is the author of 6 house and way of life books, which include “What to Do With All the things You Possess to Depart the Legacy You Want,” “Downsizing the Household Property – What to Help you save, What to Allow Go” and “Downsizing the Blended Household – When Two Homes Grow to be One particular.” You may perhaps reach her at www.marnijameson.com.

At Home: Which home renovations get the best returns? | Lifestyle

At Home: Which home renovations get the best returns? | Lifestyle

by Home Improvement

CRASH! THUNK! Growth! The loud clamor jolts me out of my patio chair, exactly where I am seeking to compose this column. The canines startle from their naps. “Did you hear that!?” their expressions beg.

“I know it sounds like 25 cars and trucks and a locomotive slamming into a block wall,” I reassure them, “but it is just the roofers future doorway.”

We settle back down. A couple minutes afterwards, KABOOM! We jump. This scene repeats all early morning as the hardworking roofers future doorway detach old clay roof tiles, and shove them by mounds into a dumpster 15 ft below. It is not peaceful.

Nevertheless, according to a report that is practically in my hand, it will be worthy of it. As it transpired, I was creating this column about which residence advancements provide the most lender for the buck. The 2022 Reworking Effect report, out from the Nationwide Association of Realtors, appeared at the best outdoor and indoor improvements homeowners could make to get most, all or additional of their dollars back again. Researchers surveyed remodelers to uncover the typical charges for jobs and actual estate brokers to obtain out how much each and every enhancement would incorporate to the home’s resale worth.

Topping the list of out of doors tasks, offering a 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} return on investment decision: a new roof.

This is small consolation for my neighbor who keeps apologizing for the inconvenience, such as the roofer’s design truck blocking our driveway.

“Don’t stress about it,” I confident her, yelling over the commotion. KERBAM! “I will get you again.”

“I’ve been dreading this, but didn’t know it would be so bad,” she stated. CALUMPH!

“What? Can’t hear you!”

“I’m so sorry! It is a nightmare,” she hollered.

“You’ll be happy,” I assured her, and intended it.

“Why does a new roof top rated the listing?” I requested Jessica Lautz, NAR’s vice president of demographics and behavioral insights and a single of the report’s authors. “I necessarily mean, no a person drives up to your dwelling and suggests, ‘I love your roof.’”

“Homebuyers know that replacing a roof is a expensive, messy, loud, dirty, depressing career so will fork out for that,” she said. One more good bet is a new garage door, which can increase control enchantment, increase insulation and also return all your financial commitment.

As for indoor improvements, the best spot goes to hardwood floors. Refinishing the ones you have returns an normal of 147{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the value, when putting in new wooden floors success in an normal return of 118{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}. Although a decidedly unsexy improvement, new insulation delivers a 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} regular return, as well as the strength savings.

If you’re on the lookout for far more to do, ending an attic or basement can result in a 75{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}-86{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} return, respectively, whilst kitchen renovations — the egocentric explanation I was fascinated in this report, so I could secretly develop a scenario to encourage my husband — returned among 67{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for a modest upgrade (new counters, new appliances, refreshed cabinet fronts) and 75{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} for a finish renovation (new structure, new cabinets, included island, moreover the higher than).

Separately, Groundworks, a basement remodeling company with workplaces all over the nation, noted that a modest kitchen remodel offered an 81{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} return. I’m likely with that.

Although the NAR report did not look at decrease-value assignments, people can spend off handsomely. New landscaping, very good lawn treatment and a freshly painted front door can boost a home’s sale rate very well past the price tag of the hard work. Based on the colour, this means don’t do something ridiculous, portray your home’s interior can net a 107{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} return, according to Groundworks, which is likely why 63{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of serious-estate brokers recommend their sellers paint their inside partitions, Lautz additional.

Of study course, authentic existence doesn’t arrive down to a single survey and very simple math. To get a lot more out of your home than you put in, you have to have to make the proper renovations on the right residence in the proper area at the correct time. Here’s what else to take into consideration ahead of you get out the jackhammer:

• Necessity. Any benefit your household improvement adds is dependent on whether or not the undertaking needed to be completed. Now I know, your definition of wanted and your partner’s definition could vary. But, in basic, improvements include benefit when they enhance outdated, worn and out-of-date resources, or improve livability. So, if you tear out a new kitchen and put in a different new kitchen, you most likely will not gain a lot.

• Taste. How a great deal worth you include assumes that what you do appears far better than before, and that many others concur. Once more, your strategy of appears superior and somebody else’s might fluctuate. Seek the advice of magazines, houses in your place, a designer or a true estate agent if you are doubtful. In typical, never be way too bizarre.

• Neighborhood. What provides price to a household in one particular neck of the woods may be sunk revenue in a different. Question a true estate agent who appreciates your location regardless of whether the marketplace will help the advancement you’re considering.

• Age and issue. The NAR report was based mostly on houses in fantastic condition constructed immediately after 1981. More mature residences are more probable to have hidden troubles lurking driving partitions and price a lot more to transform since proprietors will have to convey them up to recent building codes. In other terms, placing a gleaming new lavatory in a dilapidated house is like placing a bow on a burro.

• Pleasure factor. Because dwelling improvement is not all about the funds (Proper? Ideal?), the NAR report also calculated the joy aspect, which tended to be 10 out of 10 for most jobs.

Although you may well not get back again all you put in financially, really do not forget about the value of having fun with the advancement oneself.

CRASH! THUNK! Increase! Appears like income to me.

Marni Jameson is the creator of six residence and life-style books. Get to her at marnijameson.com.

Home renovation: Lifestyle changes, aging homes, rising prices spur record spending | Science & Environment

Home renovation: Lifestyle changes, aging homes, rising prices spur record spending | Science & Environment

by Home Improvement

About a year after the onset of the pandemic, Kathy Lange-Novak and her husband, Frank Novak, decided it was time to update their Fitchburg home.

After 26 years, the floors, countertops and appliances were showing their age, and the couple thought they needed to upgrade before putting the house on the market.

“This is the first time we’ve remodeled anything,” Kathy said. “It needed an overhaul.”

Like so many Americans, the recently retired couple had spent most of the past year at home as COVID-19 health restrictions limited their social activities.

“It’s one thing when you go, ‘We could really use new carpeting, but we can go to the movies,’” and forget about it, Lange-Novak said. “When you have to look at it — that’s when you think, ‘I really need to do something about it.’”







Home remodeling

P.J. Ender, lead carpenter for Degnan Design-Build-Remodel in DeForest, works in the kitchen of a Middleton home undergoing a complete first-floor remodel. U.S. homeowners are expected to spend a record $430 billion this year on renovations.




Spurred by a housing shortage, aging structures and occupants, and months spent cooped up indoors, U.S. homeowners spent nearly $370 billion last year updating and renovating their homes, according to Harvard University’s Joint Center for Housing Studies. That record number is expected to top $430 billion this year, a whopping 28{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} increase from 2020 spending levels.

People are also reading…

  • Watch now: Madison anti-abortion headquarters hit by apparent Molotov cocktail, vandalism, graffiti
  • Sen. Ron Johnson says it ‘may be true’ that COVID-19 vaccines cause AIDS
  • County investigation of Vilas Zoo confirms ‘toxic’ work environment, blames staff not bosses
  • Dane County Board probe of Vilas Zoo could trigger ‘nightmare scenario,’ county attorney says
  • 14-story housing project, outdoor plaza proposed for Lake Monona waterfront
  • Open Jim: Did Wisconsin men’s basketball ‘miss’ Kamari McGee and Max Klesmit the first time around?
  • Wisconsin men’s basketball coach Greg Gard worries about NIL, transfer portal ‘collision course’
  • Hands on Wisconsin: Gableman and Johnson embarrass Joe McCarthy
  • How this offseason adjustment could help the Wisconsin men’s basketball team in March
  • Lucille and Merchant’s Rule No. One Hospitality Group bringing new restaurant to Hilldale
  • Dog left tied to fire hydrant in Green Bay; Humane Society shares message for owner
  • ‘Wanted fugitive’ arrested in Wisconsin Dells after multi-county police chase, authorities say
  • Wisconsin abortion ban might lead to Illinois border clinic, ‘clandestine’ action, provider says
  • Wisconsin football assistant Bill Sheridan linked to NCAA investigation at Air Force, report says
  • Teenage boy lured 10-year-old girl into woods before her killing, complaint alleges

“It’s a big market,” said Abbe Will, a senior researcher at the center, which has been tracking residential remodeling for nearly three decades.

While there are multiple factors, Will said lifestyle changes brought about by the pandemic have only encouraged more home improvement spending, as people seek to make homes fit their changing needs — whether that’s working from home or just spending more time there.







Abbe Will

Will




“Homeowners (want) to maximize every inch of space they have when they’re spending so much more time at home,” Will said.

‘A building crescendo’

Initially, 2020 looked to be another year of modest growth for the home remodeling industry, until the shutdown of most nonessential services in March brought projects to a halt. But builders say their phones started ringing again that summer as people realized the pandemic wasn’t going away.

“It’s just been a building crescendo of work,” said Chad Speight, owner and president of Chad’s Design-Build in Madison. “We started to see an uptick in demand as people were stuck at home staring at whatever needed to be improved or replaced.”







Home remodeling

Degnan Design-Build-Remodel employees Amy Volkmann and David Luecht hang wallpaper as part of a home remodeling project in Middleton. Builders say people are looking to expand, create spaces for work or recreation, redo bathrooms and kitchens, and generally make their homes more comfortable.




Abe Degnan, owner of Degnan Design-Build-Remodel in DeForest, said people are looking to make their homes bigger, create spaces for work or recreation, redo bathrooms and kitchens and generally make their homes more comfortable.

“People are eating out less and cooking more,” Degnan said. “Things they used to ignore … are driving them crazy.”

The unprecedented demand, combined with labor shortages and supply chain issues, has resulted in lead times of one or even two years and project delays.

Speight said he’s basically booked through next year, even with a couple of new employees. “We would hire more carpenters right now if we could,” he said.

Jonathan Graves, co-owner of Ironwood Construction in Madison, said he’s been so busy the past two years that he’s had to turn away new clients.

“We could not keep up,” he said. “We had to pick and choose our jobs.”

Material shortages and volatile pricing have also created logistical challenges.

Lumber prices quadrupled in the spring of 2021 amid surging demand and supply chain constraints and are still more than double pre-pandemic levels. That had ripple effects on manufactured materials like windows and cabinets.

Speight said suppliers used to give contractors a month or two notice of annual price increases.

“Now we get notification on Thursday that prices are going up tomorrow,” he said. “Take it or leave it.”







Home remodeling

Joanna Ivey used a microwave, crockpot and toaster for about six months this year while remodeling the kitchen and dining room of her Westmorland home, but she said the inconvenience “will absolutely be worth it.”




Extra incentive

Joanna Ivey and Jack Gordon got a lesson in supply-chain management this spring, midway through a major home renovation.

After nearly a decade, Ivey said 2020 was the year she finally decided to remodel her 64-year-old West Side ranch.

“We kind of had this vision since we moved in. We just didn’t have the money to do it when the kids were little,” she said. “The kitchen was literally falling apart.”

Ivey ran her graphic design firm from home even before the pandemic, but the lockdown provided some extra incentive to remodel the kitchen and living space.

“You just stare at it all the time,” she said. “We’re not having people over.”

Ivey started interviewing contractors in November 2020, and construction started in January, a full year after signing a contract. The work was supposed to be done by early April, but the cabinets didn’t arrive on time.

“They didn’t have the wood, which is nuts to me,” she said.

Ivey said the project should be done in time for her son’s graduation party in June, and despite living without a kitchen for six months, “it will absolutely be worth it.”

“It’s a ranch, so it will be great for retirement and beyond,” she said. “It’s the perfect house and the perfect location.”

Other forces

While the pandemic was a catalyst for many home renovation projects, it’s hardly the only factor.

Since the housing market crash that triggered the recession of 2008-2009, U.S. homebuilders simply haven’t kept pace with demand. In fact, spending on home repair and maintenance has outpaced new homebuilding.

“We’re not building enough to meet the demand, and that puts a lot of pressure on the existing housing stock,” Will said.

At the same time, Americans move about half as often as they did three decades ago, according to Census Bureau data. Homeowners are even less mobile, moving just once every 20 years on average.







Mark Eppli

Eppli




And over the past couple of years most homeowners have refinanced at historically low interest rates, creating yet another incentive to stay put, said Mark Eppli, director of the James A. Graaskamp Center for Real Estate at the Wisconsin School of Business.

That means Baby Boomers are sticking around — or “aging in place” — at a time when millions of millennials each year are reaching the traditional home-buying age, contributing to additional pressure on housing prices.

And because of soaring prices, Will said the average homeowner has accumulated hundreds of thousands of dollars in equity that they can use to finance their improvements.







Home remodeling

Ruslans Kozloeskis, a carpenter with Degnan Design-Build-Remodel, adds hardware to new drawers at a Middleton home renovation.




So long as the bottleneck persists, property values will continue to rise, which is good for homeowners but bad news for millennials and others who find themselves priced out of the market and unable to accumulate property wealth.

“It makes it more difficult for that first-time homebuyer to enter the market,” Eppli said. “There’s not much of a silver lining for that group.”


In 'frenzy' of housing market, buyers take risks or risk losing out

Driven by demographic shifts, economic forces and the societal changes wrought by the COVID-19 pandemic, Wisconsin home prices are soaring, forcing home buyers to take unprecedented risks.

The march of time

Just as more homeowners are aging in place, their homes are also aging.

Most Wisconsin homes are more than 40 years old, according to Census Bureau data, and more than a third were built before 1960. That’s a lot of roofs, siding and carpeting that needs to be replaced. And a lot of homes built for a different lifestyle.







Home remodeling

Heidi Kent and her husband, Mark McFadden, plan to expand the kitchen and add a main-floor bathroom to make their East Side bungalow better fit their needs as they age. 




Consider Mark McFadden and Heidi Kent’s Near East Side bungalow. The only bathroom is on the second floor, and the kitchen can comfortably accommodate one, which may have been fine when the home was built in 1919.

“The kitchen was treated as this very utilitarian environment,” McFadden said. “When I go over to friends’ houses … I expect to spend time in the kitchen.”

Assuming the materials are available, McFadden and Kent hope to start work this summer on a long-planned renovation to enlarge the kitchen, add a main floor bath and make the home more accessible.

An internet security consultant, McFadden has worked from home for decades and said the pandemic wasn’t really a factor in their decision, though it has affected the timing of the job.

“The planning is done. Everything is ordered,” he said. “Now it’s mostly a waiting game.”

McFadden, 66, said he and Kent love the neighborhood and want to make their home “a more wonderful place for us to spend the rest of our lives.”







Home remodeling

Heidi Kent looks at designs for her home renovation. Kent and her husband, Mark McFadden, say they like their East Side neighborhood but want to make their 103-year-old home more comfortable.




“We’re not interested in accumulating property wealth,” McFadden said. “We’re interested in having a house that’s more comfortable … easier for older people to get around.”

Kathy Lange-Novak had different ideas when she embarked on her home renovations last year. She figured fixing up the home was a prerequisite for selling it a few years from now.

But now that the work is done, Lange-Novak said she doesn’t want to leave.

“Being home a lot made us say, ‘Let’s fix it up,’” she said. “Fixing it up has made us want to stay home more.”

Chestnut Hill prepares for sun and fun at their Home And Garden Festival | Lifestyle

Chestnut Hill prepares for sun and fun at their Home And Garden Festival | Lifestyle

by Home And Garden

Chestnut Hill’s House and Yard Festival is again delivering exciting and purchasing for all. On Sunday, Might 1st, one particular hundred and fifty suppliers will set up together the 7700 to 8600 blocks of Germantown Avenue to deliver the community alongside one another and supports the nearby companies in just the Chestnut Hill Small business District.

This just one working day competition operates from 11 a.m. to 5 p.m. It is a relatives-pleasant celebration that has a thing for everyone including property décor, out of doors demonstrations, plants and bouquets, jewellery, lawn and tree treatment, landscaping, soaps, home furnishings, handcrafted components, artwork, outfits and more.

Amid the quite a few vendors that will be on site at Chestnut Hill’s Residence and Garden Competition, are plant vendor Foliage and fashionable soap and bath company Gold and Water Co.

Yolanda Palmer owns Foliage, which is positioned at 6039 Passyunk Avenue and this is her next yr collaborating in the competition. Palmer sells plants, pots and even helps make her very own dirt. She is very passionate about crops and enjoys educating persons on how to thoroughly treatment for the vegetation. She says she’s keen to aid everyone from the plant-curious to the seasoned gardener.

“Novice plant fans, newbie and professional plant enthusiasts will occur, persons that want to get into vegetation will come,” Palmer said.

Palmer claims she has been caring for vegetation due to the fact she was a minor girl.

“Every Friday, when I was carried out with my chores, I would get a gift. My mother would acquire me a plant and that traveled with me as I received more mature. All through the many years, I obtained into various species and care. I’m into the treatment of the plant and the dust and fertilizing,” she reported.

In addition to the property and garden offerings, there is amusement for young ones young and old. Head to Jenks Elementary to check out actions for young children under 10. There will be confront portray, arts & crafts and other enjoyable functions, together with food alternatives, for households. In addition, Stagecrafters Theater Occasions will present issues for small children of all ages such as stilt walkers from 11 a.m.-1 p.m., jugglers from 12-2 p.m. courtesy of the Philadelphia School of the Circus Arts, a balloon artist from 12:30 — 2:30p.m. and children’s theatre performances at 1p.m., 2 p.m. and 3 p.m.

Since of the pandemic, quite a few things were scaled down or cancelled previous 12 months. This festival was condensed to a stroll.

Palmer is fired up for this year’s enlargement, “I’m super thrilled! I’m sitting down below acquiring my orders jointly and issues I want to display outside the house. I require anything to glance exceptionally pleasant. It is going to be completely diverse from what I seasoned last year. It is going to be greater!”

Gold and H2o Co. is another seller that will be on internet site. This is Operator Chartel Findlater’s very first yr taking part in the competition.

“I am really energized about acquiring to place faces to the names of the companies that I’ve communicated with on social media since my small business is primarily an on the net retailer. I am grateful to meet folks and be a component of that working experience,” states Findlater.

Findlater’s enterprise provides hand crafted soaps and bathtub and human body items. She has a studio in Kensington and sells on the net as effectively as through community suppliers and companies. Some of her suppliers are in Chestnut Hill.

Gold and H2o Co. was developed after Findlater craved to find peace throughout a seeking time in her daily life. Her business enterprise has afforded her the chance to “help many others uncover those very same moments of relaxation and peace as perfectly. I really don’t feel healing will come by means of a bubble bathtub for every say, but I consider the intention driving it is what is important. Did you pause? Are you present in this second? Are you getting treatment of oneself?”

This year Chestnut Hill’s Dwelling and Backyard garden Pageant was expanded to include things like many blocks and of study course there will be food! Regional Chestnut Hill eateries as well as some meals vehicles will be on the scene. Seem for festival foodstuff favorites like popcorn, cotton sweet, ice cream, baked items, delicate pretzels and more. Puppies are also welcomed!

How Adam Neumann’s Property Cuts His Taxes

How Adam Neumann’s Property Cuts His Taxes

by Real Estate News

Former WeWork CEO Adam Neumann (Getty Images, iStock, Yard 8 Miami, Stacks on Main, Trulia, Power Design Inc., Inkwell Decatur, Wikipedia, Illustration by Kevin Cifuentes for The Real Deal)

Previous WeWork CEO Adam Neumann (Getty Pictures, iStock, Garden 8 Miami, Stacks on Main, Trulia, Electric power Style and design Inc., Inkwell Decatur, Wikipedia, Illustration by Kevin Cifuentes for The Authentic Deal)

When Adam Neumann was ousted from WeWork, he reportedly acquired virtually $200 million, additionally firm inventory well worth hundreds of millions more, Online Education.

But with wonderful purses arrives good liability — tax liability, that is. Decreasing it was undoubtedly a priority for the exiled co-founder, and the genuine estate he acquired with his windfall figures to do just that.

Neumann’s purchase of a the greater part stake in a $1 billion-as well as luxurious rental portfolio can — with the magic of serious estate tax accounting — shield a sizable part of the previous CEO’s payout. By depreciating his recently obtained holdings, Neumann could slash his taxable profits by tens of hundreds of thousands of pounds every yr for many years to appear.

Depreciation is central to true estate investing. Every person from mother-and-pop landlords to a selected U.S. president can take edge of the tax basic principle, which presumes that things wear out and drop benefit more than time — even if they don’t.

As residential rentals theoretically crumble, the tax male lets homeowners to deduct a portion, about 3.6 {d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}, of the acquire value. Entrepreneurs of business buildings get to deduct a little less. Land and personal residence do not depreciate.

Purchased a residential developing for $27.5 million? Deduct $1 million from your taxable income every yr.

With what Neumann paid for his apartment portfolio, that suggests trimming an 8-determine sum from his taxable income. And thanks to a distinctive tax classification for serious estate gurus, Neumann and his relatives may possibly be equipped to shelter an added $500,000 of his golden parachute. What is much more, he could exploit the latter loophole just about every 12 months, supplied that he continues to be a genuine estate specialist. But that is not a shoo-in.

“The hurdles are not small to remaining viewed as a actual estate skilled,” stated Donald Williamson, professor of accounting and taxation at American University.

The tax classification would be tricky to realize for any person moonlighting as a house proprietor. Its stringent needs include paying out half of one’s time on small business related to authentic assets, and at least 750 hours, in a offered 12 months.

“Most authentic estate industry experts are agents or brokers who consider in the item, and function really hard on a handful of houses they have,” reported Williamson. The main barrier is that folks generally spend as well a great deal time undertaking other things.

But Neumann’s inglorious exit from WeWork in 2019 left him with loads of time on his fingers, probably clearing the way for him to realize actual estate expert standing, or what New Jersey tax accountant Simon Filip explained as “the golden ticket,” for the reason that it enables passive losses like home depreciation to offset other varieties of cash flow, these as his WeWork walkout deal or the $13.7 million he gained for his Greenwich Village townhouse. Devoid of staying a real estate qualified in the eyes of the IRS, however, passive losses like depreciation only offset passive revenue, these kinds of as hire.

The line involving passive losses and energetic income was drawn by Ronald Reagan in 1986, when his Tax Reform Act kiboshed rich individuals’ recreation of buying actual estate to offset ordinary profits, stated Meyer Mintz, a tax accountant and spouse at Berdon LLP. But real estate pros have a unique potential to evade that limitation and claim passive losses in opposition to non-passive profits.

Neumann, who grew to become fabulously loaded at the specific second he dropped his task as CEO, may possibly yet become the serious estate specialist he constantly claimed he wasn’t.

“He’s likely not a real estate skilled if he’s doing other [work],” reported Williamson. “But if he’s a loaded guy surfing in the Maldives and does [no work] other than true estate, he may well conveniently be thought of a genuine estate skilled.”

The amenity principle

Speculation has swirled all around Neumann’s designs for his family company 166 2nd Economical Solutions, which has invested in proptech businesses such as Doorsey though Neumann buys up massive swaths of residences in and around metropolitan areas this sort of as Nashville, Atlanta, Fort Lauderdale and Miami.

Just one principle which is been floated is that Neumann could load up his luxurious apartment properties with amenities and expert services to choose edge of an additional quirk of the tax code: Items within a creating — maybe vending machines with matcha-infused mezcal or exercise bikes hooked up to universal consciousness — can be depreciated extra rapidly than buildings on their own, provided a price-segregation enterprise approves.

If installed in luxury apartment buildings in 2022, they could be depreciated to a cost-basis of zero in a single 12 months as a result of so-termed bonus depreciation, in accordance to Filip. Neumann could offset his taxable cash flow even more as a end result.

A media guide used by Neumann questioned no matter whether the ex-CEO would just take depreciation on his properties, a suggestion that left Mintz incredulous. “That is not a issue,” the tax professional stated. “I’ve never noticed anybody deliberately not take depreciation.”

Not depreciating belongings is akin to burning revenue, an action with which Neumann, in fairness, has some knowledge.


Online Education
Business Law
Women Fashion