If you’re itching to make improvements to your home with hopes of upping your resale value, you may be tempted to renovate your bathroom, kitchen or closets. Although these updates can increase buyer appeal, as well as add to your own enjoyment of your abode, the return on investment for these projects typically is low.
The home improvement projects that will pay back the most aren’t as glamorous, but you’ll recoup more of the expense when you sell your home.
Here are the five projects that offer the most value by boosting your home sale price and allowing you to recover most of the money you spent—possibly even more than you spent—according to the 2015 Remodeling Impact Report by the National Association of the Remodeling Industry and the National Association of Realtors.
1. Replacing your roof
Although putting a new roof on your home may not feel quite as satisfying as upgrading your kitchen appliances or installing a shiny new spa tub, it’s the home improvement with the best return on investment, according to the report. Homeowners who replace their roof can expect to recoup 105% of the value, meaning they’ll actually make money on this project.
The NARI estimates you’ll spend $7,600 to tear off an old roof on a 2,450-square-foot, two-level house; install laminated, architectural asphalt shingles; place new flashing around pipes and chimneys; and install a new ridge vent. The project isn’t cheap, but you can recover $8,000 in costs for your effort.
There’s no need to replace a perfectly good roof, but if yours has wear and tear, it could be a good investment before you sell.
2. Refinishing your hardwood floors
The home renovation project with the second-highest ROI is refinishing your hardwood floors. Transforming dull, scratched wood floors into shiny, good-as-new flooring is a great deal: Homeowners typically recoup 100% of the expenses.
Freshening up scuffed wood flooring in an 18-by-20-foot family room costs approximately $2,500, the NARI estimates, which includes sanding floors to bare wood, refinishing them with polyurethane and adding new matching baseboards. Because homeowners typically are able to gain back the full value of this project when selling their home, it’s a worthwhile project.
3. Upgrading your insulation
An insulation upgrade offers the third-best potential for recovering the value of the project, at 95%. Expect to spend about $2,100 for adding 10 inches of blown-in cellulose insulation to your attic, according to NARI estimates, but you’ll recover approximately $2,000 of that cost. And you’ll lower your energy bills by upgrading your insulation.
4. Installing wood flooring
The NARI estimates that it costs homeowners $5,500 to replace worn carpet with new, solid oak flooring and baseboards in an 18-by-20-foot room. But the value recovered is $5,000—91% of the expense—making it the home improvement project with the fourth-highest ROI. Although you won’t regain the full value when you sell your house, new wood floors can significantly improve the look of your home, boosting buyer appeal.
5. Replacing your garage door
Replacing a creaky, slow garage door with a new one also has relatively high value for homeowners. You won’t recover the full value of the upgrade, an estimated $2,300, but you’ll gain back 87%—that’s $2,000—when you sell your home, the NARI estimates.
Next steps
If you’re ready to kick off some of these projects but don’t have enough cash in your bank account, a cash-out refinance is one way to fund home upgrades. Try NerdWallet’s refinance calculator to see whether that option makes sense for you.
Want to learn how to invest in self-storage? I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has). Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income…
Want to learn how to invest in self-storage?
I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has).
Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income streams. Or, perhaps you’re looking for a full-time income and are looking for your own business to start!
So, what exactly is investing in self-storage?
It is when you put your money into self-storage facilities and rent out units to renters.
I have personally used self-storage facilities for many reasons over the years for a short-term period, and nearly every single time I think about the profitability of it all and how passive it seems to be a self-storage owner or self-storage investor.
There are usually no customers at the facility (I’ve almost always been the only one there when dropping off or picking up), but every unit is being rented. Seems like an interesting way to make money with not too much work!
Plus, over 9% of households pay for self-storage units, and there is a lot of demand for new facilities.
Quick Summary
Self-storage investing can be a way to make money and run a business with low expenses
There is a lot of demand for storage units, with many businesses having a very long waitlist
If you don’t want to run a business, you can also buy shares in an REIT or even just rent out your garage or basement
What is Self-Storage Investing?
To put it simply, self-storage investing is when you invest in storage facilities.
More and more people need storage units for many different reasons such as moving, downsizing a home, needing a place to store something that a person doesn’t have room for (such as an RV or boat), or even businesses that are storing extra inventory.
For example, someone might need a short-term lease to store their belongings due to being in between homes (like if they are moving but their next home isn’t ready yet). Or a person on a long trip may decide to sell their home, but they need a place to store their important items.
If you decide to invest in self-storage, you have a couple of options. You can start by purchasing and owning a facility yourself or passively invest by buying shares in a self-storage REIT (Real Estate Investment Trust). I will be going over each of the options further below.
Related content:
Is Self-Storage a Good Investment?
Yes, deciding to invest in storage units can be a good idea.
According to Neighbor, the average profit margin on a self-storage unit is around 41%, and they typically have high occupancy levels of around 92%.
One of the main positives of investing in self-storage is being able to earn income with less work (you’re not dealing with customers all day long – people tend to store their stuff and not visit it often).
Self-storage facilities usually have low expenses compared to other types of commercial real estate investments. Also, self-storage is usually recession-resistant as people still need to store their stuff.
Another benefit of investing in self-storage is the flexibility it offers because you don’t need very many employees to run a storage lot. Some lots that I’ve been to don’t even have any employees – instead, you call the owner when you want to get your stuff and they then send someone down. People tend to store their stuff and not touch it for a while.
Related: 18 Passive Income Ideas To Earn $1,000+ Each Month
Types of Self-Storage Facility for Investment
When investing in self-storage facilities, you may not know that there are a few different types.
This section will discuss the different self-storage facilities you can invest in.
1. Climate-Controlled Storage
Climate-controlled storage is something that more and more people want these days because it can protect their belongings from temperature changes and humidity.
After all, many places get very hot weather, and storage units can get quite hot inside. You don’t want your things to melt into each other.
These types of units are good for storing items like electronics, artwork, or documents.
Now, your location is important in deciding if you need climate-controlled self-storage, as areas with extreme temperatures or humidity obviously will need AC more. For example, a storage facility in Florida may be more likely to have air conditioning than a facility in Alaska. And, a facility in Alaska is more likely to have heat than a storage unit in Florida.
2. Mixed-Use Storage
Mixed-use storage facilities combine multiple types of storage units in one location.
For example, these types of facilities may have climate-controlled, drive-up, boat, and RV storage all in one place. Many storage facilities are like this. They cater to different customer needs and tend to have a broader target market due to being able to store so many different types of items.
People tend to like these forms of storage as they can store all of their belongings in one place, instead of having their stuff scattered across town.
3. RV and Vehicle Storage
With so many people owning RVs and extra vehicles, the demand for storage has increased over the years.
Also, many neighborhoods simply do not allow for RVs or extra vehicles to be parked in front of their home (or even in their driveway, backyard, etc.), so a storage lot is needed.
Some storage facilities may even just be massive warehouses where people can store their RVs, valuable cars, and boats inside.
We have stored an RV in a place like this many times. We have found the typical rent to be around $5 to $10 per foot for our RV in an indoor parking lot, so you can see how quickly storage revenue can add up! Some businesses even have private RV units, and those fetch a much higher rate, such as $400-$600+ per month.
4. Boat Storage
Boat storage facilities specialize in safe storage for boat owners during the off-season or when not in use. These types of facilities typically have long waitlists too.
Boat storage businesses sometimes have both indoor and outdoor options (or they may focus on one or the other), as well as extra services like boat maintenance, hauling, launching, and more.
Coastal regions or areas with nearby water access (such as Florida) are usually good locations for investing in boat storage facilities as there are more boats, of course.
We have used boat storage facilities many times over the years to store our own boat. The amount you can make per boat can be anywhere from a couple hundred to a couple thousand dollars each month, depending on the location and the type of boat (catamaran vs. small fishing boat, for example) you can store. We have paid anywhere from around $1,200 to over $2,000 a month in the past for boat storage.
5. Drive-Up and Outdoor Storage
This is the type of storage that pretty much everyone has seen, as they are very common.
With this type, customers can drive directly to their storage unit, making loading and unloading much easier. These types of facilities are usually single-story buildings. Many times they do not have AC or heat.
Drive-up and outdoor storage facilities give renters an easily accessible storage solution.
How to Invest in Self-Storage
If you want to invest in self-storage, there are a few different ways to do so.
1. Buy an Existing Self-Storage Facility
One of the easiest ways to enter the self-storage market is by purchasing an existing business, such as those for sale by mom-and-pop operations.
This can save you time as everything is in place and you already have customers with rented units. Yes, you can improve some of their processes, but a lot of the hard work is already done for you.
But, purchasing a facility can be expensive upfront, though, because you will be buying a business with land, a building, and an existing customer base.
Just as an FYI – As you’re looking for storage facilities that are for sale, you may come across different classes. Class A facilities usually are higher-quality climate-controlled storage units, whereas Class B and Class C facilities may be lower-quality.
Buying an existing storage lot can possibly make you more money than investing in REITs (discussed further below), but it also means more hands-on management and responsibility because you will be actively running a business and managing employees.
2. Build a New Self-Storage Facility
There are around 2 billion square feet of storage space in the U.S. alone, but there is a high demand for more. Many self-storage facilities have long waitlists even!
I have called many storage lots only to find out that they had waitlists that were years long. I have even several times called every single lot within a few state radius, and found that every single one had a waitlist.
Yes, the storage business is really in that much demand!
As a self-storage investor, you can take advantage of this high demand and build your own storage facility.
To create a self-storage facility from the ground up, you will need to do the following:
Find land to buy – Once you know that an area needs a storage facility, you will need to find land to buy to build on. You will also want to make sure that it is easy to drive to (for example, if you are building an RV storage lot, you don’t want low bridges as the only way to get to your lot because no one will be able to get there then).
Build – After you buy the land, you will need to think about what you want your facility to look like, then hire a construction company to build your plan.
Open up for business– Once the facility is built, you will need to market it and get customers. You will also want to set up the systems to manage daily operations effectively and as passively as possible.
Self-storage is in demand, so building a new storage business can be a way to get started and make money.
3. Buy Shares in a Real Estate Investment Trust (REIT) That Focuses on Self-Storage
If you want to invest in self-storage without actually owning and managing a business, one way is to invest in an REIT.
REITs are a type of investment that allows you to buy shares in a company that owns self-storage facilities. Think of it like shares of stock in a company that you can buy.
With REITs, you can invest in a portfolio of self-storage properties without physically owning or managing the facilities yourself.
This is more passive because you don’t need to hire employees or do maintenance checks.
4. Rent Your Space on Neighbor.com
If you have extra space in your own home such as a garage, closet, driveway, or spare room, you can rent it out as storage space through a platform like Neighbor.
With this site, you can earn $100 to $400+ each month (the rate you can get depends on demand in your area and the type of storage you are renting out).
Here’s how Neighbor works:
Sign up for a free account – Create an account on Neighbor by clicking here.
Describe your space – Write a detailed description of your space, including the dimensions, location, and any features (such as air conditioning or heat). Add pictures of the space as well so that potential renters can see what you are renting out.
Set your price – Choose how much you want to charge for renting your space.
Manage rentals – Connect with interested renters, agree on terms, and manage ongoing rental contracts, all through the Neighbor platform.
You can learn more at Neighbor Review: Make Money Renting Your Storage Space.
Advice for managing a self-storage facility
If you decide to run your own storage facility, then here are my tips for new self-storage operators.
Making money from self-storage
To make money from your self-storage facility, you need to think about what your customers want. So, you may sell amenities to your renters, such as vehicle washing, starting up their vehicle or checking on it, electrical plugins to charge vehicles or RVs, and so on.
You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?
Security in self-storage facilities
Security is very important for customers when choosing a self-storage facility. Customers care about their stuff and they don’t want anything happening to it, such as it being stolen.
So, you will want to make sure that your facility has a lot of light (especially at night time), security cameras aimed at different angles, and gates with codes. This helps your customers feel safer about leaving their stuff at your storage facility, and also helps to protect your business from liability issues and bad reviews (for example, if a person has their stuff stolen from your facility, they are likely to leave a bad review and this can cause others to not use your storage units as well).
Frequently Asked Questions About How To Invest In Self-Storage
Here are answers to common questions about investing in self-storage.
How can I find a self-storage business for sale?
To find a self-storage business for sale, you can start by searching on websites like LoopNet and BizBuySell. I took a quick look at both of these sites and found many for sale quite easily from anywhere in the hundreds of thousands to in the millions of dollars price range.
What are the best self-storage stocks to invest in?
The best self-storage stocks for you to invest in will depend on your own money goals and the amount of risk you want to take on. Unfortunately, I cannot tell you which is the best self-storage stock, as I am not your financial advisor and I do not know your specific situation. But, I can tell you which ones are popular.
Some of the most popular and best self-storage stocks include Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).
Which self-storage REITs have the best returns?
Real estate investment trusts (REITs) are a popular way to passively invest in self-storage facilities. Several well-known self-storage REITs include Life Storage (LSI), National Storage Affiliates (NSA), and Simply Self Storage (SSS).
Keep in mind that past performance and dividends do not mean that the same will be true in the future, so it’s important to do your own research.
What risks are there with investing in self-storage?
Like with all businesses, there are risks when it comes to self-storage. Some risks include competition, changes in demand, and possible natural disasters that could hurt the facility (such as a severe storm or a flood).
Also, managing a self-storage facility will, of course, require at least some time from you and may even require employees, so you should also think about operational costs and business management.
How profitable can a self-storage business be?
The amount of money that a self-storage business can make depends on many things such as location, demand, and operating costs.
Can owning a self-storage unit generate passive income?
Having a self-storage facility can earn you passive income through rental fees. But, managing a self-storage facility also requires that someone works at the business, to check people in, show units, and check on the property. You could hire employees so that it is more passive for yourself.
You can also earn passive income by investing in self-storage REITs or stocks instead of owning and running a storage facility.
Does self-storage do well in a recession?
Self-storage in the past has performed relatively well during recessions, as people often downsize their homes or need temporary storage. Of course, though, the past doesn’t mean that it will always do well. So, it is always best to do your research and prepare as best as you can.
What is the future outlook for self-storage?
The future for self-storage looks to be positive, as there is a lot of demand for storage units and I’m still constantly seeing waitlists everywhere. In fact, whenever I need to store something even for just a few months, I’m always being told that I need to call a year in advance for a spot.
Many storage facilities have a high occupancy rate, long waitlists, and cannot keep up with demand.
How To Invest In Self-Storage – Summary
I hope you enjoyed today’s article on how to invest in self-storage.
If you are looking to add a new asset class to invest in, becoming a self-storage investor can be an interesting way to bring in a stable cash flow and make more money.
Self-storage is in high demand too, with many businesses currently having a long waitlist.
Factors such as location, demand, the quality of facilities (Class A, Class B, and Class C), and the type of storage lot all can change the success of a self-storage investment.
Are you interested in learning how to invest in self-storage?
A cash-out refinancing loan is treated differently by the IRS than a traditional mortgage. Although you receive a lump sum of cash, cash-out refinancing is considered a form of debt restructuring, and you do not pay taxes on the cash you receive.
With cash-out refinancing, you cash out a percentage of the equity that you have accrued in your home and replace your existing mortgage with one with a higher principal. You can use the cash for any reason, such as consolidating debt, paying for home renovations, or unexpected medical expenses.
Here’s what you should know about cash-out refinancing and the tax implications.
How Cash-Out Refinancing Works
When you refinance your mortgage, you cash out equity. Equity is the difference between your current mortgage balance and the value of your home today. Let’s say your home is worth $300,000 and the balance on your mortgage is $150,000, you have $150,000 in home equity.
A lender typically requires you to keep at least 20% of the value of your home in equity. In the above case, you would leave $60,000 in equity and have $90,000 to cash out. Your mortgage lender would also charge around 1% in closing costs.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
The Tax Implications of Mortgage Refinancing
A cash-out refinancing loan is treated differently by the IRS than a traditional home loan because it is considered a form of debt restructuring. You do not pay tax on the money you receive in cash, and you might also be able to deduct some of the interest you pay on that cash from your taxes.
Here’s a closer look at the tax implications of a cash-out refinancing loan.
Is a Cash-Out Refinance Taxable?
Because the IRS considers a cash-out refinance to be a form of debt restructuring, the cash you receive is considered a loan, not income, and is not taxed. In addition, you could receive additional tax benefits depending on how you spend the money you receive.
If you use the cash to increase the value of your home, such as putting on a new addition or replacing your heating or cooling system, you can claim the interest that you pay on the loan as a tax deduction.
Before you do this, however, consult a tax professional to make sure that the work qualifies. Simple repairs like painting or general maintenance do not qualify for tax deductions. You will also have to keep meticulous records and save receipts documenting what you spend so that you can prove your case when you file your taxes.
Requirements for Interest Deductions on a Cash-Out Refinance
Capital improvements to a property that increase its value will qualify for an interest deduction. Examples could include a new addition, a security system, or a new swimming pool. General maintenance and repairs will not qualify, nor can you deduct the interest you pay on the loan if you spend the money on a vacation, medical bills, or credit card debt.
How to Make a Cash-Out Refinance Tax-Deductible
Below is a list of home improvements that qualify for the interest deduction.
Qualifying Home Improvements
• Renovating or adding on an addition, such as a garage or a bedroom
• Putting in a swimming pool
• New fencing
• New roof
• New heating or cooling system
• Installing efficient windows
• Installing a home security system
Improving your property’s value means you can also save money if you sell your home. Capital home improvements count toward the total amount you spent on the property and can potentially lessen your capital gains tax liability when you sell your home.
Deductions for Adding a Home Office
Adding a home office to your home is a capital improvement that qualifies for the interest deduction on a cash-out refinancing loan. There are also additional potential tax benefits to adding a home office for small businesses or the self-employed.
How Home Offices Can Impact Your Taxes
You can deduct the interest on your cash-out refinancing loan if you use the money to add a home office, because it will increase the value of your home and is considered a capital improvement. If you are a business owner or self-employed, you could also qualify for the home office deduction on your federal taxes.
The home office deduction is a benefit that allows you to claim a percentage of what you pay on your loan as a business expense. You must use the designated office space for business purposes only, and it cannot be used as a spare bedroom or family space or it will not qualify. Also, your home office must be the primary place where you conduct business.
Recommended: What to Know Before You Deduct Your Home Office
Tax Implications of a Cash-Out Refinance for Rental Property
Rental income is considered personal income by the IRS. If you use the capital from a cash-out refinance to improve or repair a rental property, the expenses are tax-deductible. Also, interest, closing costs, and insurance paid on a rental property can be deducted from your income as business expenses.
What Are the Limitations for Interest Deduction with a Cash-Out Refinance?
For the 2022 tax year, single filers and married couples filing jointly could deduct mortgage interest up to $750,000. Married taxpayers who file separately could deduct up to $375,000 each. (The limit is higher for debts incurred prior to December 16, 2017: $1 million or $500,000 each for married couples filing separately.)
Can You Deduct Your Mortgage Points?
Mortgage points, also known as discount points, are fees you pay a lender upfront so that you can pay a lower interest rate on your loan. One point is equal to 1% of your mortgage loan. With a cash-out refinance, you cannot deduct the money you paid for points in the year you refinanced until after 2025. But you can spread out the cost throughout the loan. That means if you accumulate $2,500 worth of mortgage points on a 15-year refinance, you can deduct around $166 per year throughout the loan.
Risks of a Cash-Out Refinance
Cash-out refinancing is a risk. You are taking on a larger loan than your original home mortgage, which means that your monthly mortgage payment will increase unless interest rates are lower than when you applied for your current mortgage. If your payments are higher and you can’t keep up with them, you could be at greater risk of foreclosure.
Alternatives to a Cash-Out Refinance
Two financing alternatives that also use equity in your home are a home equity loan or a home equity line of credit (HELOC).
A home equity loan is a second mortgage for a fixed amount that you repay over a set period while keeping your original loan. The payments include interest and principal, just like a traditional mortgage, but the interest rate may be higher than a primary mortgage. This is because the primary lender is paid first in the event of foreclosure, so the secondary lender takes on more risk.
A home equity line of credit (HELOC) is also a second mortgage but with a revolving balance. That means you can borrow a certain amount, pay it back, and then borrow again. As with a credit card, your payments are based on how much you use from the line of credit, not on the available credit amount. If you don’t need to borrow a large sum, this might be a cheaper option than cash-out refinancing because a HELOC tends to have a lower interest rate.
Recommended: Home Equity Loans vs HELOCs vs Home Improvement Loans
The Takeaway
Cash-out refinancing is a way to access the equity in your home and use it to pay for expenses, though it does mean taking on increased debt. The cash from this type of mortgage refinancing can be used any way you like, such as to pay for home renovations, college, or unexpected medical expenses.
When you opt for cash-out refinancing, your original mortgage is replaced by a larger mortgage. If interest rates are lower than when you took out your original mortgage, your monthly payments may go down, but it will take you longer to pay off the loan. Depending on how much cash you need, you can also consider a HELOC or a home equity loan to obtain the money you need.
Turn your home equity into cash with a cash-out refi. Pay down high-interest debt, or increase your home’s value with a remodel. Get your rate in a matter of minutes, without affecting your credit score.*
Our Mortgage Loan Officers are ready to guide you through the cash-out refinance process step by step.
FAQ
Is cash-out refinance tax-deductible?
Some of the interest you pay on a cash-out refinancing loan might be tax deductible if you use the money to make capital improvements on your home and you keep meticulous documentation to prove it. It’s best to consult with a tax professional to make sure the improvements you do on your home qualify for the deduction.
Do you pay taxes on a cash-out refinance?
No. The funds you receive from cash-out refinancing are not subject to tax because the IRS considers refinancing a form of debt restructuring, and the money isn’t categorized as income.
How do I report a cash-out refinance on my tax return?
You don’t need to report the cash you receive from a cash-out refi as income, so the refi would only show up if you record the interest you are paying on the new mortgage on an itemized return.
What are the tax implications of a cash-out refinance on a rental property?
Rental income is taxed as personal income by the IRS. The good news is that if cash from a refinancing is used to improve or repair a rental property, the expenses are tax-deductible. Also, closing costs, interest, and insurance paid on a rental property may also be deductible from your income as business expenses.
How does the timing of a cash-out refinance affect my taxes?
As long as you meet the requirements for capital improvements, you can deduct the interest paid on your refinanced loan every year that you make payments throughout the life of your refinance loan. So, if you refinance your mortgage to a 15-year term, you must spread your deductions over the 15 years. However, you can only deduct the interest you pay each year, and the amount of interest paid will become less as the loan matures and you pay more toward the principal.
Photo credit: iStock/Jun
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Like many tech workers, Jing Guo and Gabriel Taylor Russ left Chicago during the COVID-19 pandemic in search of warmer weather.
“We were working remotely,” Guo says of their move to the Bay Area. “We thought ‘at least we can be outside.’”
However, a few months after settling in, the couple realized how difficult it would be to buy a home in San Rafael, where housing inventory is low and the median home price is around $1.4 million. “It was just too expensive,” says Russ, 37, a director of engineering for Ritual Wellness.
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It’s not like they were being picky, either. They didn’t want a modern house or something that was move-in ready. They simply wanted to find a house with character that they could make their own.
“Our dream was to own our own home and design it our way,” says Guo, 33, who works as a product designer for Two Chairs, a mental health company.
As self-proclaimed nomads — Russ is originally from Australia and Guo immigrated to Chicago from China when she was 12 — they decided to look in Los Angeles, where they could continue to enjoy the outdoors.
But they quickly learned that Los Angeles is no different from the Bay Area: When they bid on a home in South Pasadena, theirs was one of 63 offers.
“We were outbid by $200,000,” Russ says of the bidding war, shaking his head. “And we bid over the asking price just like everyone else.”
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So when their real estate agent sent them a listing for a bungalow in Eagle Rock that needed work, the couple fell in love with the 1923 home’s Spanish architecture.
The quiet tree-lined street near Occidental College contributed to the bungalow’s charm. Although the listing described the house as needing “a little polishing” — a euphemism for remodeling — the couple saw great possibility. “I told our realtor while FaceTiming, ‘This is it!’” said Guo. “When you know, you know.”
The Eagle Rock house met the couple’s requirements: It had character, needed to be updated and had the potential for an accessory dwelling unit, or ADU, to add value to the property.
The ADU was designed to complement the main house’s Spanish architecture. Right, the one-car garage before it was turned into an ADU. (Mariah Tauger / Los Angeles Times; Precision Property Measurements)
This time, their offer of $1,025,000 was accepted after only three others bid on the house.
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When they saw the house in person, however, they realized how much work would be required before they could move in.
“We had to hire someone to rip out the urine-soaked flooring from the previous tenants’ cats,” Guo says, wrinkling her nose as she recalled the aroma. “But the only way we could afford to renovate the house was to live in it first.”
With temporary flooring in place, the couple moved in and learned there was no working heat. The kitchen range wasn’t functional. Cooking on a hot plate with renovations on the horizon, Guo says they felt like they were camping in the house.
After living in the house for a year, they hired architect Barrett Cooke of Arterberry Cooke to help them rethink the bungalow and turn the one-car garage into a tenant-friendly ADU on a budget of $230,000.
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“The house needed some love,” Cooke said diplomatically, “but we worked with the existing details and tried to enhance what was already there.”
Cooke added an arch in the ADU in keeping with the main home’s Spanish architecture. Right, the custom-made front door of the main home.(Mariah Tauger / Los Angeles Times)
Although living in the house before renovating it could have been better, it ultimately helped the couple rethink the interiors. “We realized the living room was too small and the lighting was bad,” Guo says.
When it came time to renovate the 1,258-square-foot house, the couple says Barrett and contractor Antonio Blanc stayed true to the footprint — with one exception.
“We added 100 square feet to the front of the house and raised the roof in the living room,” Cooke says. “That completely transformed the function of the house.”
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Cooke also removed the wall between the kitchen and dining room to create an open living area and added skylights in the hallway, brightening the dark interiors.
A set of black aluminum-clad French doors off the dining room let in further sunshine and provide easy access to a new front porch.
“We wanted to orient the house so that their yard space was the front yard,” Cooke says. The porch maximizes the views toward the street and the front yard’s park-like setting. “People often want to connect the kitchen to the backyard,” Cooke explains, “but that wasn’t an option with a small yard and ADU in back.”
In a move that transformed the front of the house and added curb appeal, Cooke relocated the front door from the middle to the side, just off of the porch. She also installed arched doorways and windows that emphasize the home’s Spanish architecture.
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In the open living area, European French oak engineered hardwood floors contribute to the home’s clean look. A vestibule with a bench and coat rack at the entrance to the living room adds order and feels like a private space.
The bathroom in the ADU features simple subway tile.(Mariah Tauger / Los Angeles Times)
“I’m naturally anxious,” Guo says, appreciating the home’s soothing interiors. “I need a house where I can feel calm.”
When it came to transforming the one-car garage, Cooke designed the 480-square-foot ADU to correspond to the architecture of the main house with a similar roofline, red tile awnings and black aluminum-clad windows.
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“It’s very clean and simple,” Cooke says. “The two structures play off each other quite nicely.”
Like the main house, Cooke raised the ceiling of the original garage to bring in more light.
Steps from a charming entry where guests can store their shoes, coats and laptops, the main living area has a living room and full kitchen with simple white subway tile and custom mint green cabinets.
The bedroom has enough room for a desk and plenty of storage courtesy of side-by-side closets. To accommodate long-term tenants, Cooke installed a washer and dryer in the pass-through bathroom, which connects the bedroom to the living area and kitchen.
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The couple rents the ADU as a furnished midterm rental, which generally lasts three to nine months, for approximately $4,000 monthly. “We were always banking on the ADU for its earning potential,” Russ says.
Now that the finishing touches are complete, the couple loves the results: a character home that has been beautifully remodeled to honor its Spanish heritage and an ADU that covers their construction loan.
Over the last few years, the couple went from living in a construction zone in a new city with few friends to hosting Dungeons & Dragons game nights in their elegant, sun-filled dining room.
On a sunny day earlier this month, they took a break from their Zoom meetings and sat outside on their new patio.
As neighbors walked by and said hello, the couple discussed future home improvements, including landscaping, in the shade of a majestic Chinese elm in the front yard.
“I’m so excited to hang out here,” Guo says. “I still can’t believe we live here.”
A fallen tree can significantly damage your home and other property. Homeowners insurance will likely cover the damage caused by the tree, but you may wonder if your policy will cover the cost of removing it. The answer is: It depends.
Does homeowners insurance cover tree removal?
If a tree falls for a reason covered by your policy, like strong winds or lightning, and damages your home, garage or other insured structures, your home insurance will likely cover the cost to remove the tree as well as the damage to your home.
There’s usually a limit to how much your insurance company will pay to remove debris, which includes fallen trees. This limit is typically around $500 to $1,000.
When doesn’t home insurance cover tree removal?
Home insurance won’t always pay for tree removal. Here are a few scenarios where you’re unlikely to have coverage.
No damage to property
If a tree falls as a result of snow, wind, hail or another covered event, but doesn’t damage structures such as your home or fence, you’ll likely be responsible for the cost of removing it.
One common exception is if the tree is blocking your driveway or a wheelchair ramp. In this case, your insurance may help cover the cost of removal.
Preventive tree removal
Home insurance normally won’t cover the cost of removing trees that pose no immediate threat to your property. This includes clearing sick or dying trees to prevent possible future damage. That’s considered part of your responsibility as a homeowner.
Events not covered by your policy
If a tree falls due to an event not covered by your policy, like a flood, earthquake or mudslide, you may need to pay for the removal out of your own pocket. It will likely not be covered by insurance.
How much does tree removal cost?
You can expect to pay between $200 and $2,000 for tree removal
. The exact price depends on the size of the tree, its location and job complexity. For example, trees under 30 feet may cost $200 to $450 to remove, while trees over 80 feet can cost $1,000 to $2,000 or more, depending on whether a crane is needed.
Even smaller trees can be expensive to remove if they’re near buildings, power lines or other structures. Similarly, trees with multiple branches or pest infestations can increase the total expense.
🤓Nerdy Tip
Weigh the cost of removal against your home insurance deductible, which is the amount you pay out of pocket before insurance covers the rest. If the cost of removing the tree isn’t much higher than your deductible, it may make sense to pay out of pocket instead of filing a claim. That way you can avoid premium increases or losing any claim-free discounts you might have.
Does home insurance cover damage caused by your neighbor’s tree?
If your neighbor’s tree falls onto your property and damages your home or another insured structure, like a garage or fence, you’ll typically need to file a claim with your own home insurance. Your insurance should cover the damage and removal costs, even if the tree was on your neighbor’s property.
If your neighbor’s tree was dead, diseased or poorly maintained and it falls on your property, your neighbor may be liable for the damages and removal costs. However, proving your neighbor knew the tree posed a risk before it fell can be a challenge. If you have proof that you informed your neighbor about the tree’s condition before it fell, it can strengthen your case. An example of proof would be a certified letter from a tree expert stating the tree needs to be removed.
Does homeowners insurance cover tree damage to your neighbor’s property?
If a tree on your property falls and damages your neighbor’s house, their insurance policy should cover the cost of repairing the damage. You shouldn’t need to file a claim with your own insurance.
That said, you could be responsible for the removal if your neighbor told you the tree was at risk of damaging their property and they have a paper trail to prove it. This could be considered negligence on your part.
What if a tree lands on your car?
Home insurance generally won’t cover a tree crashing onto your car. Instead, this type of situation falls under your auto insurance policy. If you have comprehensive auto insurance, it should cover the damage from the fallen tree. Comprehensive coverage pays for damage from non-collision events, like storms, falling trees, theft and vandalism. You may be responsible for the damage if you don’t have comprehensive coverage.
How to protect your home from tree damage
If you have trees on your property, these tips can help protect your home from damage:
Regularly inspect your trees. Look for signs of damage or disease, such as cracks, splits or dead branches. If you notice any issues, consider hiring a professional arborist to take care of the problem.
Trim your trees. Regular pruning can prevent branches from falling and damaging your home. Remove any dead or diseased branches, and trim trees so the remaining branches are a safe distance away from power lines and other structures. You may want to hire an arborist to trim branches near power lines.
Choose the right trees. Consider the size and location carefully when planting new trees. Ensure the tree is appropriate for the space and won’t cause damage to your home or other structures as it grows.
A lot rides on a home appraisal, whether you’re trying to sell a house, refinance your mortgage or tap into your home equity.
An appraisal may come in lower than you expected because property values dropped or because you’ve overestimated your home’s market value. But the appraisal process isn’t foolproof, and there are options if you think the appraiser got it wrong, or you suspect that you’ve been subject to appraisal discrimination.
Here’s what to do if your home appraises for less than you think it should.
Understand how an appraisal affects home equity
A home appraisal is a licensed appraiser’s opinion of home value, based on research, analysis and professional judgment. Lenders require an appraisal for most kinds of home loans because the property serves as collateral for the loan — they don’t want to lend more than the property is worth. Lenders plug the appraised value into a formula called the loan-to-value ratio (LTV) — the loan balance divided by the home value. A combined LTV includes the balance of the mortgage plus the amount of a home equity loan or line of credit. The ratio affects the amount you can extract in home equity and whether you can refinance.
Here’s an example of how the appraised value would affect borrowing from your home equity. Say, for instance, a lender’s maximum combined LTV is 85%. You’d like to borrow $100,000 through a home equity loan and currently owe $200,000 on your mortgage.
If your home appraised for $375,000, your combined loan-to-value ratio (300,000 divided by 375,000) would be 80%, and you might qualify. But if the home appraised for $325,000, the LTV (300,000 divided by 325,000) would be 92%, too high to meet the lender’s requirement.
Check the appraisal report for accuracy
The lender is required to send a free copy of the appraisal report to the loan applicant at least three days before the loan closes. So you’ll get one if you’re refinancing or applying for a home equity loan. But in a home sale, the buyer will receive it as part of the mortgage process. If you’re the seller, work with your real estate agent to get a copy of the report from the buyer.
The appraisal report documents a slew of property details that the appraiser considered in the valuation. Even the best appraisers can make mistakes, so scour the report to make sure all the particulars are correct, such as:
Number of bedrooms and bathrooms.
Square footage.
Amenities, including fireplaces, patios and pools.
Garage type and condition.
Condition of roof, furnace or other major systems listed on the report.
Additional features, such as energy-efficient systems.
Evaluate the ‘comps’
To help determine home value, appraisers consider prices of comparable homes that were recently sold in the area, known as real estate comps.
Check which homes were used. Were they truly comparable? How nearby are the homes, and how recently were they sold?
You may want to ask a friendly real estate agent familiar with your neighborhood — or your agent, if you’re working with one — for a list of recent comparable sales.
🤓Nerdy Tip
Understand that appraisals are different from online home value estimates. The appraisal isn’t wrong just because it’s lower than the ballpark figure you saw online. Home appraisals take more details into account than home-search algorithms can, so use online estimates as guidelines only.
Submit a ‘Reconsideration of Value’
Promptly document any mistakes or missing information from the appraisal report, as well as any additional information about comparable sales that you think should be considered. If you’re the loan applicant, then submit that written information as part of a “reconsideration of value” to your lender.
If you’re the home seller, ask your real estate agent to communicate those issues to the buyer and ask the buyer to submit the information to their lender.
Although the loan applicant ultimately pays for the appraisal, the appraiser actually works for the lender. So any feedback about the appraisal should go to the lender, not the appraiser.
The lender will pass along the information to the appraiser. The information you provide could prompt the appraiser to revise the valuation, but only if the additional details are relevant and significant enough to move the needle.
A loan applicant could also ask for a second appraisal or start over with a different lender. But appraisals typically cost at least a few hundred dollars, and there’s no guarantee the next appraisal will come in higher.
File a complaint if you suspect discrimination
Under the U.S. Fair Housing Act of 1968, home appraisers aren’t allowed to discriminate based on someone’s race, color, religion, sex, disability, family status or national origin. Yet many media reports in recent years have highlighted instances in which properties appraised for more when Black homeowners hid evidence of their race. Although the stories were new, the concept of “white-washing” a home to get a fair value has a long and painful history in the Black community.
Another option is to file a fair housing complaint. You can do that directly with the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity or get help through your local fair housing center. Funded through HUD’s Fair Housing Initiatives Program, fair housing centers do preliminary investigations and help people navigate the complaint process. You can find a fair housing organization near you on the HUD website.
Refinance programs that don’t require appraisals
If you have a mortgage backed by the Federal Housing Administration or the Department of Veterans Affairs, you may be able to refinance without getting an appraisal. These programs, however, don’t let you cash out any of your home equity:
A Mediterranean-inspired mansion in Southlake, Texas — a suburb of Dallas/Fort Worth known for its high quality of life and affluent resident base — has recently hit the market, reminding us all that everything is bigger (and better) in Texas.
Priced at $1,899,900, the custom-built home is the epitome of modern elegance, and offers plenty of space, a sleek design, and luxurious finishes. Frank Capovilla with Coldwell Banker Realty’s Southlake office holds the listing.
While a budget of under $2 million will buy you little in a crazy expensive real estate market like Los Angeles, in Southlake, TX — if this property is any indication — you get 4 bedrooms, 4 full baths and 1 half-bath, a stately great room with 25-foot ceilings, and a 2-car garage.
This, of course, has not gone unnoticed.
The mass Cali exodus of the past few years has seen some of the biggest celebrities move to Texas, with household names in sports, entertainment, and arts now calling the Lone Star State home.
The Southlake house also comes with an expansive gourmet kitchen and an executive home office, offering the perfect balance of style and convenience.
The primary suite steals the show with its jaw-dropping Chanel-like master closet, a haven for fashion enthusiasts.
Outside, a fireplace patio provides a perfect spot to enjoy the picturesque views of the Greenbelt ranch and serene pond. There’s also plenty of space for future owners to add a pool and create their own backyard oasis.
Other notable features include 2 balconies, 2 outdoor patios, an oversized sun deck, an outdoor kitchen with a gas grill BBQ, a game room with a wet bar and wine fridge, and smart everything: oven, refrigerator, HVAC, sound system, garage door system and more.
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As a homeowner, you probably have a rough sense of where your property starts and finishes. It might be the driveway, the border of your lawn, or even the fence you’ve set up as your visual marker. However, these familiar markers might not necessarily align with the official property lines. It’s worth considering where your property lines actually fall..
Before embarking on any outdoor projects, such as building a garage, replacing a fence, installing a pool, or enhancing your landscaping, it’s important to take a moment to evaluate your property’s true boundaries. This careful assessment ensures that you can savor the improvements you make to your home and yard without inadvertently encroaching on your neighbors’ territory or causing any potential disputes. So, whether you own a townhouse in Seattle, WA, or a home with 5 acres in Atlanta, GA, it’s important to be sure of where your property’s lines are located.
What are property lines?
Property lines are necessary during construction by the developer, city, county, or state to show where ownership of one plot of land starts and ends. A surveyor establishes the formal boundaries and marks them. When the property is legally split, the new property lines are established in a survey. The property line at the front of your house is known as your frontage, the measured distance across the front of the plot you own. The property lines on the side of your plot are known as sidelines. Local zoning laws often dictate these distances.
Why is it important to know the location of your property lines?
Property lines are the borders that tell you exactly where your property begins and ends. They keep one property owner from encroaching on another owner’s land or compromising their privacy by building too close to their house. A typical encroachment might be tree limbs that grow past your property and overhang into a neighbor’s roof or a driveway poured to extend onto a neighbor’s property. When you know exactly where your property lines fall, you’ll avoid accidentally encroaching on your neighbor’s land.
If you plan to build a permanent structure, you’ll want to be as accurate as possible, and ordering your own land survey is the best option. In most states, you are required to call a diggers hotline 811 to request buried utility information before you build a fence, plant a tree, or extend your driveway. This call ensures you know the location of any buried wires or irrigation systems to avoid causing damage. Within a few days’ notice, someone from your local utility company should be able to mark county wires or pipes with spray paint or flags.
Since property line information can be valuable to someone you may sell your house to, you will want to keep all records. Keep a copy of a new survey you’ve completed, a plat map, or any information from the city or county offices in digital or hard copy format. If you do a new survey, you may also need to register it with your county assessor or recorder. During the sale of a property, the title company will search for encroachment of one property into another. They may refuse title insurance to the seller if they find a property line dispute.
When you know how to find your property lines, you’ll gain peace of mind for any project that could come close to the edge of the property. Showing respect for your neighbor and their property rights can help you avoid a lawsuit.
To avoid issues with property lines and prevent confrontation with your neighbors, here are 12 easy ways to find property lines.
1. Use Google Maps to find property lines
In the world of digital mapping, it’s worth noting that Google Maps does have the capability to display property lines, although it’s not always a guaranteed feature. The availability of this information can vary due to several factors, and there may be instances where Google lacks access to the necessary data, resulting in the inability to provide property lines. However, it’s a simple process worth exploring to get an initial rough idea of your property’s lines.
You’ll want to start by navigating to the Google Maps website. Once you are on the website find the search bar located at the left side of the screen and type in your exact property address. Once you have searched, you’ll be presented with a standard grid-like GPS view. To switch to a satellite photo view, click on the “Layers” button.
Next, tap the “+” button located at the lower right-hand corner of the screen to continue zooming in. Continue to zoom in on the property you’re interested in until you spot those property lines. You’ll recognize them as slender gray lines. If these lines don’t pop up, it’s likely that this feature isn’t accessible in your region.
Are there other apps that show property lines?
Other GPS apps can provide you with accurate plat maps. LandGlide and Landgrid are two used most commonly by property owners.
LandGlide app: The LandGlide app uses GPS to pinpoint your property’s location accurately. The app includes parcel records in 3,000 counties throughout the country, covering more than 95% of the United States. The app is available on IOS and Android devices and it offers a free trial. A paid subscription service is available after your trial expires.
Landgrid Map: The Landgrid app allows users to view more than 149 million properties nationwide and includes ownership & address information. The app has a survey editor that will allow you to create your survey. The pro version allows users to access premium fields, bookmark properties, run surveys, and utilize various web features.
2. Hire a licensed land surveyor
The most accurate way to know where your land begins and ends is to hire a surveyor to determine your property lines. The property surveyor will first check county records to understand the history of the lot. Then they will find out about easements, subdivisions, and any other important factors that could affect your land and what you choose to do with it. The cost to hire a licensed land surveyor typically runs between $330 and $670 per survey and depending on the location, size, and property history, it could be up to $1,000 per survey.
2. Review your property deed
Your property deed will give you a tax description of your property. This tax description explains the boundaries of your plot of land. The description often references the names of subdivisions and other land references that may no longer be in the area, such as a row of trees. You can get a copy of your deed online or from your county recorder’s office for a fee.
3. Check the metes and bounds survey
A metes and bounds survey identifies a landmark to define the property boundaries, such as a tree, creek, road, or intersection. This is the “place of beginning” or POB. You can then use a compass to follow the directions provided. This survey can be hard to understand because it often uses landmarks that may no longer exist. For example, the survey may state that a property line extends “fifty meters from the tall maple.” However, that maple tree may no longer be standing.
4. Read the property line map, or ‘plat’
When you buy a house, you typically receive a plat map or property line map. If you don’t, you can find it at the county clerk’s office. The plat will give you the exact dimensions of your lot related to other lots on your block. For a property on a residential street, expect to see similarly sized rectangles lined up on each side of the street, showing each privately owned property. Every individual property will be labeled with an identifying number. This number is separate from the parcel number for tax purposes. Your neighbors may be able to help as well. You can ask them if they have a copy of their plat map, which would show the neighborhood.
5. Ask for the property survey from your mortgage or title company
If you finance your home purchase through a lender, the lender will typically require a property survey. Your mortgage company should have a copy of this survey from the purchase transaction. The title company will also run a property search and may have a copy of any surveys or property line maps completed for your property.
6. Review the existing property survey from your county or local municipality
Property surveys are public records and you can request a copy of any existing surveys from your county or local municipality. If the county or municipality has completed a survey for your plot of land, they will have a copy. They usually charge a fee to reproduce it.
7. Locate a hidden survey pin
During construction, builders often use survey pins to mark the plot of land. Look for thin iron bars staked into the ground in the general area you expect your property lines to be. A metal detector can be a helpful tool for your search along the perimeter of your property. You’ll often find survey pins close to a sidewalk or the curb of the property. However, survey pins can be misleading as utility companies, tree-removal companies, and other contractors may have moved them in the course of their work.
8. Look for property line markers
Locating property line markers is another alternative to finding survey pins. Property line markers can be made of metal, wood, or concrete. For a relatively new home, the property boundary markers might still be in place. If you find survey pins or concrete boundary markers, they are likely to be more accurate, as wooden stakes are more easily moved. Check your plat map to see where to look for property line markers.
9. Check sidewalks and street lights
Sidewalks and street lights can give you a good visual reference if you don’t know how to find property lines. While they are not a perfect reference, installers may have aligned sidewalks or streetlights with the property lines. Start by looking at the lines cut into the sidewalk in front of the house. A contractor may have cut lines to meet up with the edge of the property or used slightly different concrete to separate properties. This method is a good starting point but be sure to use it in conjunction with a survey or plat map to ensure accuracy.
10. Visit the local zoning department
Your municipality’s zoning department records plats showing land division, and will have maps drawn to scale for your property. Unless your home was built over a hundred years ago, you can ask for a copy of your neighborhood and lot plat for a minimal fee. The zoning department records will give you the exact dimensions of your lot.
11. Measure the property yourself
You could measure your lot by hand. To do this, you’ll need a long measuring tape, a compass, and perhaps an assistant. Retrace the surveyor’s steps by locating the starting point labeled on the plat. This will be the “common point” or POB. Once you find the starting point, use the measuring tape to follow the plat, recording measurements as you go. The plat measurements should correspond with the ones you record yourself.
As a homebuyer, exercise caution regarding property lines as you move through the purchasing process. The previous owners may have failed to account for property lines before they started various home improvements and could have encroached on a neighbor’s property. Ask your lender for a copy of the completed survey – you may learn that the property is smaller than you expected. Or, an encroachment issue could prompt you to renegotiate the deal or walk away altogether.
If you love the home, a suitable compromise could involve a boundary line agreement after the purchase. A boundary line agreement is a legal contract to settle disputes between neighbors over property boundaries and provides an agreement on property line usage without going to court.
There are fast, easy, precise, and cost-effective ways to find property lines, whether it’s for a property you own or one you plan to purchase. Make sure to gather accurate information when buying a home or starting any construction or landscaping project.
Townhouses offer convenience and amenities that appeal to a range of homebuyers. They’re also growing in popularity, with new townhouse construction up more than 28% from 2020 to 2021. Construction costs also increased during the same time period.
Whether you’re building an investment property or your own new home, determining the project cost is essential before breaking ground. The cost to build townhouses depends on the size, location, number of units, onsite amenities, and the style of the building.
What Is a Townhouse?
A townhouse, also called a townhome, is a type of single-family home that has two or more floors and a shared wall with at least one other home. Compared to different home types, like duplexes and triplexes, each townhouse is individually owned and has its own entrance. Given the high-density design, townhouses tend to be more common in urban and suburban communities.
Townhouses often have their own yard or garage, but may share other communal amenities, such as a pool or tennis court, with neighboring townhouses. These shared facilities are typically governed by a homeowner’s association (HOA), which townhouse owners pay fees to for managing amenities and providing services like landscaping and snow removal.
If choosing between a condo or townhouse, another distinction is that townhomes usually have more autonomy in customizing the exterior of their home and outdoor living space, and more responsibility for that space as well.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
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What Determines the Cost of Building a Townhouse?
The cost to build townhomes depends on a variety of factors. The type of townhouse, size, number of units, location, and additions like garages and basements all contribute to the total construction cost.
Here’s what to consider when estimating how much to build a townhouse.
Type of Townhouse
There are different types of townhouse layouts and configurations, including traditional, stacked, and urban.
• Traditional: Generally organized in a row with two floors of living space, a basement, and garage.
• Stacked: Refers to townhouse units stacked in a multi-floor building, which typically have their own entrances.
• Urban: Similar to traditional townhomes, but often have more modern and spacious floor plans and higher prices.
Another key decision when purchasing a new construction home or townhome is whether to go with a modular or stick-built design. The components of a modular townhome are manufactured off-site, saving time and labor.
Stick-built townhouses are constructed on-site using a wooden frame and finished with a brick or vinyl exterior. This type of construction allows for greater customization, but generally comes at a higher cost than modular townhomes.
Recommended: Pros and Cons of Building a Townhouse
Square Footage
The cost to build a townhouse is impacted by the size, which is measured in square feet.
Townhomes cost between $111 to $125 per square foot on average. Because townhouses share walls and occupy smaller lots, they’re often more affordable than detached single-family new construction, which breaks down to an average of $150 per square foot.
Using the square footage to estimate total townhome cost is a fairly straightforward calculation. For instance, builders can expect to pay between $222,000 and $250,000 to erect a 2,000-square-foot townhouse based on the average range. Bear in mind that does not include the cost of the building site.
With these estimates, you can compare mortgage rates and determine what financing you qualify for.
Number of Rooms
The interior layout, including the number and types of rooms, is a key determining cost factor.
Not all rooms are created equal though, with kitchens and bathrooms being the most expensive due to appliances, tiling, plumbing, and more complex electrical work. The living spaces and bedrooms are generally simpler and cheaper to build.
💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.
Number of Units
By definition, townhouses are built in groups. Leveraging economies of scale to build multiple units or a complex could reduce the cost per unit. Keeping the design and floor plan consistent across units can also lower the price.
So, how much does it cost to build a townhouse complex? That depends on the extent of amenities included, as well as the number of units.
Location
Location, location, location. Where you choose to build a townhouse will impact the cost of construction and its value once completed.
The cost of labor varies significantly between regions. Paying builders and contractors typically accounts for 40% of new home construction expenditures. The location of the townhouse also matters in terms of costs related to accessing the site and sourcing materials.
Additions
Wondering how much to build townhomes with attractive amenities? Here’s what you can expect to pay for common townhome add-ons.
• Basement: Building a basement foundation costs between $24,000 and $44,500 on average.
• Driveway: The materials and installation costs for a new driveway range from $2 to $15 per square foot depending on the material used.
• Fencing: More affordable fence materials like wood, vinyl, and composite range from $10 to $45 per linear foot.
• Garage: Cost varies by size, with one-car garages ranging from $10,500 to $27,000 and double garages costing between $14,500 and $40,300.
• Pool: Expect to pay between $28,000 and $66,500 for an in-ground pool, with vinyl and fiber-glass lining typically costing less than concrete.
• Shed: Adding a storage shed ranges from $300 to $15,000, with pre-fabricated options usually costing less than custom builds.
💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.
Construction Cost for Building a Townhouse
Construction costs are often the deciding factor when thinking of buying or building a house. Townhouses are generally less expensive to build per unit than a detached single-family home.
In addition to the factors discussed above, townhouse construction involves a range of pre-construction costs, like purchasing land, building permits, and architectural or design fees. The materials and labor usually account for the majority of the expenses to build a townhouse.
Townhouses can be designed as starter homes or luxury properties, and project budgets can be structured according to the target market and expected return on investment. Still wading into the waters of homebuying? Consult a Home Loan Help Center for useful tips and guides to master the basics.
Recommended: Construction Loans for Building a House
The Takeaway
How much does it cost to build a townhouse? In short, it depends on the type of townhouse, size, number of units, location, and added amenities. But you can estimate roughly $111 to $125 per square foot or $225,000+ for a 2,000 square-foot abode, not including land cost.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
How many townhouses can fit on an acre?
The number of townhomes that can fit on an acre will depend on what’s permitted by local zoning, as well as space allocated for landscaping, parking, and other amenities. However, an acre can accommodate around 20 two- or three-story townhomes.
How much are utilities in a townhouse?
Utility costs vary by location, unit size, personal energy use, and equipment used for heating and cooling. Due to their smaller footprint, townhomes typically have lower utility bills than single-family homes.
Should I buy a townhouse or single-family home?
There are pros and cons with either type of home. Townhomes may require less maintenance and include extra amenities, while single-family homes can offer more space and discretion in how you design and decorate your home’s exterior.
What are the disadvantages of living in a townhouse?
Living in a townhouse can mean less privacy from your neighbors and noise from shared walls.
Photo credit: iStock/vkyryl
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Getting tenants settled into your property is about more than signing the lease and setting a move-in date. One key component, that doesn’t involve a lot of paperwork, is the property walkthrough.
Ideally done before anyone moves in, and then once again after they move out, this is the time for everyone, landlord and tenant alike, to take note of the state of the property.
Because it’s important to check everything, having a rental walkthrough checklist is a big help. Don’t rely on your tenants to bring one with them — protect yourself and your property as a landlord with one of your own.
When to do a rental walkthrough with your tenant
There are two times when you should do a walkthrough of your property — right before new tenants move in and immediately after they move out. Keeping both inspections on the same rental walkthrough checklist will enable you to see exactly how well your tenants took care of the property.
The pre-move-in walkthrough helps you take note of starting conditions within the home. You’ll note damage that’s already there, if any. Then see whether things worsen beyond normal wear and tear once your tenants move out.
Keeping the results of each walkthrough on the same checklist makes it easier to notice these changes. If the doorframe to the bedroom was in pristine condition before move-in but is full of sizable scratches after move-out, you know it’s something you can charge your tenants to repair.
Thankfully, with a security deposit from your tenants, it’s easy to manage the reimbursement for the repair without having to wait on funds.
How to do a rental walkthrough
Rental property walkthroughs should occur with your tenant(s). This is an opportunity for both of you to protect yourselves against paying for damages you’re not responsible for. Your tenant won’t want to get charged for issues already present in the home, and you don’t want them to contest a repair you believe should get covered with their security deposit.
Once you schedule a time with the tenant, come prepared with your own landlord walkthrough checklist. Your tenant might have one as well, but let them know that your copy, which you’ll both sign off on, will go into your files.
As you walk through and observe, take notes, pictures and video to document all conditions that are less-than-normal in the home. Make sure you note the things your tenant notices as well as what you see yourself. It’s best to put all the information right onto the checklist so everything is in one place. The pictures can then provide additional evidence should it become necessary later on.
Follow these steps to ensure you complete a thorough walkthrough. You can also jump ahead to download our rental walkthrough checklist.
1. Inspect certain items in every room
No matter what room of the rental you’re in, there are certain areas you should always inspect. Most of these suffer from normal wear and tear so take that into account as you go.
You can note small, common imperfections, but only take detailed notes when there’s a significant issue. If, for example, the previous tenant left a huge hole in the wall from a heavy mirror they hung, make sure to write that down (and make time to fix it).
In general, you should look at the following in each room:
Floor
Walls
Ceiling
Doors
Windows, screens, window frames
Light fixtures
Outlets and switches
Lightbulbs
Make note of anything you can fix or replace immediately and offer to take care of that before the tenant moves in if you can. When you do so, go back to your rental walkthrough checklist and cross it off as an issue.
2. Check for safety
In rooms where it’s relevant, you’ll also want to check the safety equipment in your rental property. That means testing the smoke detectors and checking to ensure any fire extinguishers haven’t expired. This should also be something your tenant is particularly concerned with, since having all the safety equipment in working order directly impacts them and their stuff.
3. Test the plumbing
In bathrooms and kitchens, make sure to look for leaks and water damage while also testing that facets and toilets all work. Inspect tubs and sinks to make sure there aren’t any oversized cracks or chips present as well.
If your rental property has a hose hook-up outside, it’s best to look at that too. Whether or not you have a hose there, test the faucet to make sure it works and doesn’t leak as well.
4. Turn on/off appliances
While you’re in the kitchen, test all the appliances with your tenant present. Turn everything on to show them how they work, but also that they work. This includes the stove, oven, microwave if there is one, dishwasher, refrigerator and washer and dryer.
5. Open cabinets and drawers
Since wear and tear can happen anywhere, check cabinets and drawers by opening and closing them all. Make sure pulls and handles are still firmly attached and hinges are working properly. Everything should close all the way and not look like it’s about to come loose.
While you’re opening these all up, you should also make sure drawers, cabinets and closets are empty. Remove anything you might find, although you don’t have to write that on the checklist.
6. Make note of any unique features to your property
If your rental property has any unique features like stairs, a backyard, garage, deck or balcony, make sure they’re a part of your walkthrough as well. Note any issues found in those areas and check to make sure everything is nice and safe.
Downloadable rental walkthrough checklist
There’s a lot to cover when doing a walkthrough of a rental property. Download this checklist to help you stay focused and not miss anything. Take detailed notes, then have you and your tenant(s)s sign off on the document. This ensures you agree with the condition of the property at the start, and conclusion of the lease.
A perfect rental walkthrough
Conducting a thorough walkthrough of your property both before a tenant moves in and after they move out gets everything noticed. However, it may not be the only time you need to give your property a once-over. Don’t discount a mid-lease home inspection should you suspect any issues with your tenants. This lets you make repairs as necessary instead of waiting until the end of a lease term.
No matter how often you need to break out your handy rental walkthrough checklist, a careful eye and attention to detail will help you maintain your property. It also makes it easier to properly assign repair charges where they’re due.