3 Tips to Prep Your Garden for Winter Right Now

By
Margaret Eby

The air outside is getting nippy, the leaves are changing, and though there’s still time to enjoy the warmer temperatures of fall, we all know that “Game of Thrones” adage to be true: Winter is coming. If you have a garden or even just a yard, it’s time to start thinking about how best to prepare your plants for winter. Much of how to care for your greenery during the fallow, cold months depends on the climate you live in, but here are a few general tips that all gardeners should heed to make the seasonal transition:

  1. Prune to protect

Fall is time to think about protecting your garden—and one of the best ways to do that is to do a thorough pruning of the existing plants.

“You want to get rid of anything diseased or insect-infested, because those can, over winter, infect your other plants,” says Melinda Myers, a gardening expert and the host of the “How to Grow Anything” DVD series. So uproot those annuals and trim the perennials back to the ground. Find out the proper way to dispose of these things depending on your municipality, too—in most places, yard waste has a special disposal process.

If you’re dealing with more of a lawn than a garden situation, the trick is to keep mowing your grass. Why? It will increase its winter hardiness so you have a more lush lawn come spring.

  1. Plant a few new things, too

Fall is actually a wonderful time to think about planting, and for looking at some of the seasonal plant sales for inspiration.

“The air is cooler but the soil is still warm,” notes Myers. “For Northerners, that warm soil promotes root growth, while the cooler air is less stressful for plants. We tend to think of bulbs this time of year, but it’s also a great time to put in shrubs and even perennials. For warmer climates, you may be transitioning from summer crops to fall ones.”

If you enjoy watching the wildlife in your yard, planting a few ornamental grasses, trees, or shrubs with berries, or perennials—anything that has seedpods and could provide food for birds—will increase the diversity of wildlife on the property.

  1. Keep plants warm

If you have vegetables or herbs and want to continue reaping the benefits, Myers suggests protecting them through the first hard freeze. You can do this a couple of ways: First, bring in cuttings from nonhardy plants before the first frost, root them, and grow them in a sunny window. Second, cover up the plants in the ground outdoors.

“Sheets work great,” Myers says. “You can cover them up late afternoons or evenings to trap the heat. But my favorite solution is using floating row covers, which trap heat but allow in light, air, and water. You can cover them and leave them on until the snow falls. I threw them on shallots, radishes, and spinach, and harvested greens that spring. And I’m in Wisconsin! It was great.”

Who knows? With a few of these simple steps, you could be eating salad fresh from your garden again by April.

 

Mortgage Interest Deduction –

Mortgage Interest deduction
Originally, in 1913 with the Sixteenth Amendment, Income Tax allowed a deduction on any interest paid by a taxpayer. Prior to World War I, most interest was paid for business purposes and very little paid by individuals. Credit cards, revolving credit, student loans and home equity loans that would charge interest would not become popular for decades.
However, by the 1930’s, the Federal Housing Authority was created to help people to finance homes. Later, other quasi-governmental agencies like FNMA, FHLMC and GNMA were created to help facilitate mortgage lending.
Even though, Congress never intended to use this deduction to encourage homeownership, it has certainly benefitted millions of people who couldn’t pay cash for their home. This deduction has made owning a home more affordable for tens of millions of people.
The Tax Reform Act of 1986 eliminated the deduction of interest on most personal debt with the exception of qualified mortgage interest debt. Two new terms were introduced to specify what was qualified.
Acquisition Debt is the amount of debt incurred, up to a maximum of $1,000,000, to buy, build or improve a principal residence or second home. It must be a recorded lien and the amount cannot be increased by refinancing. In other words, the acquisition debt is a dynamic amount that decreases as the loan amortizes.
Home Equity Debt is any amount up to a total of $100,000 over Acquisition Debt. It must also be a recorded lien against either the first or second home. It can be used for any purpose and is no longer restricted to medical or educational purposes.
In the example below, a person borrowed money to buy a home and the entire first mortgage was acquisition debt. The unpaid balance was reduced by the payments made and the acquisition debt followed accordingly. At some point in the future, after the home had gone up in value considerably, the owner refinanced a much larger amount.
The existing acquisition debt was transferred into the new mortgage. Any borrowed funds that were used for capital improvements could be added to the existing acquisition basis. The interest on those funds would be deductible.
The owner/borrower could also deduct the interest on up to a maximum of $100,000 of home equity debt. If there was still debt above the acquisition and home equity debt, it would be classified as personal debt and the interest on it would not be deductible.
Mortgage Interest deduction 2

Lenders are not concerned if they are making a tax deductible mortgage on a home. They want to make sure there is sufficient equity in the property to secure the mortgage should it have to be foreclosed. A homeowner should consult with their tax professional if there is a question about deducting the interest on their mortgage.

The Rules

The rules
The profit potential in single family homes for investment has been a consistently good long-term investment. They offer investors the opportunity of high loan-to-value mortgages at fixed interest rates for 30 years on appreciating assets, tax advantages and reasonable control that other investments don’t offer.
Last year, Warren Buffett said that if he had a way of buying a couple hundred thousand single-family homes, he would load up on them. Blackstone group L.P. (BX) has now purchased over 30,000 homes and American Homes 4 Rent (AMH) has more than 19,000 for rental purposes.
Individual investors actually have an advantage over the institutional investor but if they are not familiar with rental real estate, some basic rules could be very helpful.
1. Invest now to get more in the future.
Whether it is time, effort or money, the prudent investor is willing to forego immediate gratification for something more at a later date.
2. Real estate is an IDEAL investment.
IDEAL is an acronym that stands for income, depreciation, equity build-up, appreciation and leverage.
3. Invest in single family homes in predominantly owner-occupied neighborhoods at or below average price range.
This strategy should involve homes that will increase in value, rent well and appeal to an owner-occupant in the future who will pay a higher price than an investor.
4. Location, location, location.
The same homes in different areas will not behave the same. You can improve the condition, modify the terms or adjust the price but the location can’t be changed.
5. Understand your strategy – buy and sell, buy and hold or buy, rent and hold.
These three distinct strategies involve big differences in acquisition, management and taxation.
6. Know where your profit is coming from before you invest.
The four contributors to profit are cash flow, appreciation, amortization and tax savings. They don’t contribute equally or the same in all investments.
7. Profit starts with purchase.
Buying the property below market value builds profit into the investment initially.
8. Risk is directly proportionate to the reward involved.
An investment that has a high degree of upside also will have considerable downside possible.
9. Avoid functional obsolescence unless you have a plan before you buy.
The lack of usefulness or desirability of a home that exists when you buy it will still be there when you sell it. Unless it can be cured, it will affect future profit.
10. Good property + good tenant + good management = great investment.
These are three solid components for a successful investment.
11. Problems left unresolved have a tendency to get worse.
It is generally cheaper in time or money to fix a problem earlier rather than later.
If you’d like more information about the opportunities in our market, call or text me at 970-227-7355 or email me at [email protected]

Find the “Right” Agent Before the “Right” Home

 

The right agent the right home

It’s a common practice for buyers to make a list of what they want in a home during the search process and to explain it to their agent. However, maybe the first list they should make would have the skills they want their agent to have.
The Profile of Home Buyers and Sellers identifies what buyers want most from their agents and as you’d expect, help with finding the right home was ranked highest most often. While it is important, it may not be the most unique of the desired area of expertise.
Equally essential to the success of the transaction are the combination of help with price and terms negotiations and assistance with the paperwork, comparable sales, qualifying and financing.
To summarize the responses in the survey, Buyers want help from their agents with two things: to find the right home and to get it at the right price and terms. Some agents are actually better equipped with tools and acquired knowledge to assist buyers with financial advice and negotiations.
Since an owner’s cost of housing is dependent on the price paid for the home and financing, a real estate professional skilled in these specialized areas can be invaluable in finding the “right” home. An agent’s experience and connections to allied professionals and service providers is irreplaceable.
I have the experience and tools to get the job done for you a would appreciate the opportunity to show you  exactly how!

A Home is More Than an Address

Home is more than an address
A home is a place to call your own, raise your family, share with your friends and feel safe and secure. It is also one of the largest investments most people have.
Leverage is the ability to control a larger asset with a smaller amount of cash through the use of borrowed funds. It has been described as using other people’s money to increase your yield and it applies to homeowners and investors alike. Positive leverage causes the yield to increase as the loan-to-value increases.
Even a modest amount of appreciation combined with the amortization of a loan can cause a substantial rate of return on the down payment and closing costs.
Homes build equity as the price goes up due to appreciation and the unpaid balance goes down due to amortization.
Home is more than an address 2

Get Regular Check-ups

Get Insurance Check ups
Following his heart surgery last week, after an issue was discovered during his annual physical, President George W. Bush encouraged everyone to get regular check-ups.
Another important checkup that should be done on a regular basis and can be just as beneficial for your finances is an annual homeowner advisory. Why would you treat your investment in your home with less care than you treat your car or even your HVAC system?
Consider investigating the following:
• Know the value of your home by obtaining a list of comparable sales in your immediate area as well as what is currently on the market for sale.
• Have you compared your assessed value for tax purposes to the fair market value in order to possibly reduce your property taxes?
• Even if you’ve refinanced in the last two years, can you save money and recapture the cost of refinancing in the time you plan to remain in your home?
• Have you considered reducing your mortgage debt with low-earning cash reserves that will not be needed in the near future?
• Have you considered investing in rental homes in good neighborhoods to increase your yields and avoid the volatility of the stock market?
• Recommendations of repairmen and other service providers from a trusted source who deals with them more frequently than you do.
Our goal is to create a lifelong relationship to help you be better homeowners. We want to be your “go to” person whenever you have a real estate question. We want to help you not only when you buy and sell but all of the years in between.
We want to provide good, consumer-based information about homeownership on a regular basis through email and social networking. If it benefits you by helping you be a better homeowner, hopefully, you’ll consider us your real estate professional for life.
Anytime you or your friends need help, please call. Knowing where to get the answer is just as important as knowing the answer. If you’d like information on any of the items we suggested, please let us know.
The example above indicates the yield on a home considering 3% acquisition costs on the home with a 4.5% mortgage rate and the resulting equity at the end of five years. The different down payments will affect the yield based on the leverage effect.
Whether you rent or buy the home you live in, you pay for what you occupy. The question a person is faced with is whether they are going to buy it for themselves or their landlord. Please call or text me t 970-227-7355 or email me at [email protected] and we  can take a look at the cost of Renting vs. Owning.

Where Is It Invested?

Whee is it Invested
You’ve saved for a rainy day or retirement. Congratulations but don’t get too comfortable yet; where is it invested? It’s estimated that over 25% of Americans have their long-term savings in cash instead of investments like stocks, bonds or real estate.
The memories of the financial crisis of 2008 are recent enough to understand why some people may want to avoid the stock market and real estate. Even though Wall Street and housing have rebounded considerably, uncertain investors are sitting on their cash. However, trying to avoid a bad decision can have serious costs too.
If your money is not earning at least the current inflation rate, you’re losing the purchasing power of your dollars. Bankrate.com estimates the average money-market deposit yields 0.11% and the average five-year certificate of deposit currently yields 0.78%.
Rents are continuing to rise and there is a shortage of good, affordable housing. Single family homes have a significant advantage over many other types of investments. They have high loan-to-value mortgages available at fixed interest rates for long-terms on appreciating assets with distinct tax advantages.
The cash flows are considered to be one of the most attractive features of rental properties. Some investors think of it as a growth stock that pays substantial dividends. In the example shown below, a $125,000 rental with an 80% loan-to-value mortgage at 5% that rents for $1,250 per month, has a positive cash flow before taxes of $3,000 a year.
The rate of return on rental property can be substantially higher than other investments while allowing the investor control that isn’t available in alternatives.

Wait 2

It Can’t Hurt to Wait, Can It?

Wait
It’s been said that more money has been lost due to indecision than was ever lost because of a bad decision. Regardless of whether you agree with the statement, delaying the decision to buy in today’s market is going to cost the buyer more.
Home prices have gone up considerably in almost every market in the country in the past year and while inventories are beginning to grow, prices are expected to continue to rise. Mortgage rates jumped 1% from the beginning of May to now. They could easily reach 5% by the end of the year and continue to rise in 2014.
Many of the financial experts in the country believe that the economy will not be strong until rates are in the 7% area.
The two components that move the cost of housing are price and mortgage rates. Escalation of either one will have an affect but when both are going up simultaneously, it is dramatic. It can literally eliminate buyers who could have purchased earlier.
The following example shows what would happen to the payments on a $200,000 home if the price were to go up 3% at the same time that the mortgage rates went up 1%. Not only would the payments go up by $150.81 per month, the price of the home would be $6,000 more. Even though the down payment may not change much, the new owner would have to borrow more money. By not acting, it is costing them more in price and payment. The loss of the appreciation would have been equity had they purchased prior to the rise in price.
Wait 2

If I’d Known…

If
We’ve probably all said or at least thought “if I knew then, what I know now, I would have done things differently.” We should have stayed in school longer. We should have listened to our parents. We should have bought Apple stock in 2002 for $8.50 that sells for $400 today. Or we could have bought gold in 2000 for under $300 for a four-fold profit today.
Years from now, if we look back at 2012, we may say that it was the best buyer’s market ever. Even now, in 2013, it’s apparent that both housing and mortgage prices are going up and they may never return to the record low levels.
The housing affordability index, which is considered to be good at 100, had increased to over 200 this past December, January and February. Shrinking inventories and rising prices in most markets have caused the index to fall to 172.7 for May 2013.
This market applies equally to acquiring a home to live in or a home to use as a rental. It is estimated that about 30% of the property purchased last year was done by investors. It is understandable because the positive cash flows far exceed most other investment alternatives.
Homeowners moving up in a rising market may sell their home for more by waiting but it will also cost them more for a new house. Typically, a person buys a 50% larger home when they move up. If they wait for prices to go up 10% on the $150,000 home they’re selling, they’ll realize $15,000 more but will pay $22,500 more for the new home purchase. They’ll actually net $7,500 less by waiting for prices to go up and may have to pay a higher mortgage rate too.

if 2
The question homebuyers and investors alike are faced with today is whether they will be saying years from now that they seized or missed an opportunity of a lifetime.

Retirement Without a Mortgage –

Retiring without a mortgage

Planning for retirement is obviously important and many times, an activity plagued by procrastination. Some people plan to have their home paid for by that magical date so they won’t have payments after they retire. It makes sense to eliminate a large recurring expense before they quit working.
One strategy would be to be make regular principal contributions in addition to the payments so that it will eliminate the debt by the target retirement date.
Let’s say that a homeowner refinanced their $200,000 mortgage at 4% last year with the first payment due on May 1, 2012. Under normal amortization, the home would be paid for at the end of the term; 30 years in this example.
By making additional principal contributions with each payment, it would accelerate the payoff on the home. An extra $250.00 a month would pay off the mortgage in 20 years. $524.55 extra with each payment would pay off the loan in 15 years; and $796.23 would pay off the loan in 12 years.
Having a home paid for at retirement has the obvious benefit of no house payment. It is also a substantial asset that could be borrowed against or sold if unanticipated events should occur.

Retiring without a mortgage 2
Another strategy might involve purchasing a smaller home now to use as a rental that you intend to live in when you retire feel free to call or text me at 970-227-7355 or email me at [email protected] for more information