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A rule of thumb when determining how much money to set aside for ongoing home maintenance is to budget 1 percent of the homes purchase price each year.

If your home cost $300,000, then setting aside $3,000 per year is a good start. You may not spend that much every year on home maintenance, but it can be a good idea to save that much whether you spend it or not in a given year. Setting aside up to 3 percent of your homes purchase price would give you more room for bigger maintenance costs. Here are some to plan for:

Leaking roof: Sometimes a leaking roof can be as simple to fix as replacing a few shingles or hammering down one that popped off. But an older roof of 15 years or more may be in poor condition and could require a complete replacement. A new roof can cost $5,000 or more.

Broken air conditioner: If youre not getting cool air from your air conditioner, then an inspection by a heating, ventilating and air conditioning (HVAC) professional is probably needed. General maintenance of a few hundred dollars may solve the problem, but an old unit of 15 years or so may need to be replaced, costing about $5,000.

Leaks: Pipes can last a long time, but sometimes they leak or a small gap in the bathroom floor, for example, can lead to water stains below. This can lead to mold and other problems, and the leak should be found and fixed quickly.

A small leak can cost a few hundred dollars to fix, while broken pipes can cost thousands of dollars and may require you to ask your home insurance company if it will cover the loss if the cost is more than your deductible.

Pests: Ants, spiders, mice, squirrels and other pests can make your home their home, requiring immediate extermination or some sort of plan to get rid of them. Termites can be discovered during a home inspection, though a clean inspection may only give you peace of mind for a year if they hatch in your neighbors home and fly into yours.

Removing termites can cost $2,000 or so, while getting rid of ants and spiders may only require a $5 can of spray you can buy at a hardware store.

Published with permission from RISMedia.

When its time to file taxes, people want to claim as many deductions as possible. Home improvements are defined for tax purposes as work that increases the value of a home, extends its useful life or modifies it so it can be used for a new purpose. Examples include adding a new room, upgrading plumbing or electrical wiring, remodeling the kitchen or bathroom, replacing the roof, and adding a deck or walkway. Home improvements may be tax-deductible, but only in specific circumstances.

Home Used Exclusively as a Residence
If you only use your house as a residence, the costs of home improvements are not tax-deductible, but they may reduce the amount of taxes youll need to pay later when you sell your home. The basis is the amount of money you have invested in your home, including your down payment, mortgage payments and the cost of home improvements. Money spent on repairs is not included in the basis. Paying for home improvements now can increase your basis and may lower your tax bill down the road.

The basis is deducted from the sale price to calculate the amount of profit. The first $250,000 of profit from the sale of a primary residence is not taxable for a single person, and $500,000 is non-taxable for a married couple filing jointly, provided youve lived in the house for at least two years in the five-year period prior to the sale.

Home Used for Business or Rental Purposes
If you use part of your home for a purpose other than as a personal residence, you may be able to depreciate the costs of home improvements by deducting them from your taxable income over a period of several years.

If you run a business out of your home and use part of your house exclusively for that purpose, youll be able to deduct 100 percent of the money spent on home improvements that only affect that portion of the house, such as installing shelves or new carpeting in a home office. If you make improvements that affect the entire house, such as repairing the roof, you can deduct a percentage of the cost based on the percentage of the house thats dedicated to your business.

If you rent out part of your house, you can deduct the cost of home improvements from your rental income. If you make upgrades that only affect the room(s) you rent out, you can deduct the entire cost of those improvements. If you make renovations that improve the entire house, you can deduct a percentage of those costs that reflects the percentage of the house you rent out.

Financial Benefits of Home Improvements
Improvements you make to your home might save you thousands of dollars in taxes, but depending on how you use your house, you might not see those savings for many years. Keep receipts for all home improvements you make, and understand how they could affect your tax burden.

This article is intended for informational purposes only and should not be construed as professional or legal advice.

Published with permission from RISMedia.

Blending rustic charm with modern style is one of those design trends that continues to impress. Whether you have a historic home in need of an updated aesthetic or, conversely, youre looking to introduce some countryside appeal to your contemporary abode, its a versatile look that lends itself to a variety of settings.

Here are a few of the key characteristics to design the modern-rustic home of your dreams.

Organic Textures

Organic textures are at the center of homes that fuse these two styles, especially raw wood. You can get creative juxtaposing different materials, like concrete walls and reclaimed wooden ceilings, that are effortlessly stylish when paired together. Stone is also commonly incorporated.

Open it Up

As is the case in most modern homes, large windows and an open floorplan are essential components that allow sunlight to fill the living space. It creates a sense of flow throughout the home while also bringing the earthy textures to life. Going a step further, the rustic look is all about keeping things exposed, so dont cover up those beautiful brick walls or wood beams”keep it open!

Natural Tones

Stick to a color palette thats simple with warm and natural tones when picking out dcor. Shades of tan or brown serve well to complement the materials. That doesnt mean it has to be boring, as a few carefully chosen pops of color, like orange or turquoise, can make the perfect accent and tie it all together.

Modern Furniture

As the name of the style suggests, youre going to want to go modern with the furniture. Chic leather chairs and metallic pendant lights maintain the ideal balance without compromising style or comfort.

By combining timeless materials with cutting-edge design, its to understand all the hype surrounding the modern-rustic movement.

Published with permission from RISMedia.

When selling a home, there are rules you must follow. If your house has mold, termites or there’s some old heating tank buried in the basement, and you know about it, you can’t pretend those problems don’t exist. Disclosure laws are in place, and require someone to disclose this important information before a sales contract can be signed.

While the disclosure laws differ from state to state, it’s pretty universal that fraudulently concealing any major problems is a no-no. That means if your foundation is crumbling or your basement floods every time it rains, you’ll most likely have to say something.

Some states don’t have a standard disclosure document but instead employ the“Caveat Emptor or “Buyer Beware rule, stating it’s the responsibility of the buyer to ascertain if there are any issues with the home.

Property disclosure plays a vital role in a real estate deal. Today, it is almost standard for written disclosures to be included in the contract, so when you sign one, be truthful. If not, you’re looking at costly fees and possibly a major lawsuit.

The first step is to confer with your real estate agent and/or attorney about what’s required to disclose. You can also check with your town’s city planning department about local ordinances and disclosures that can come into play.

Generally, you are only responsible for disclosing information that you personally know about. So, if there’s a condition you didn’t know about, and weren’t told about when you previously bought the house, it’s not necessary to hire an inspector to come look for things.

However, some states do require more investigation on your part. There are laws that require a homeowner to search for some of these major problems (especially mold and lead paint) whether you see problems or not.

If you’re in the market for a new home, you should always demand that a disclosure statement be included a part of the contract. This will protect you in the event something does pop up once you move in. While you can’t force someone to sign this, a simple threat that you’ll walk away will, more often than not, force a buyer’s hand.

If people do refuse, and you still want the house, it should send up a red flag that something might be wrong, and you should invest a little more in inspections and do your due diligence about the neighborhood. Better to be safe than sorry and make sure the home of your dreams doesn’t turn into a nightmare.

Published with permission from RISMedia.

If you dont pay your property tax bill, expect your lender to reach out.

Property taxes can be one of those homeownership costs that you dont think about when shopping for a home. But theyll hit you sometime during the buying process”there’s no hiding from them.

Property taxes vary by state, county and even city, and are generally based on a homes value. These taxes can be the main source of local government funding and can include other assessments, such as from a school or water district. They can also change annually if an assessment district raises its rates or if the value of your home changes.

Your local tax assessor can tell you the tax rate for your home. If your home is valued at $300,000 and your local tax rate is 1 percent, then your property taxes would be $3,000 annually. Other fees and assessments could be added to it.

New Jersey has the highest effective tax rate on residential property at 2.38 percent, while Hawaii has the lowest at .28 percent, according to the Tax Foundation.

How to Pay Your Property Taxes
However much your property taxes are, there are two ways to pay them.

An impound or escrow account is one way. This is set up by your mortgage lender when your loan is set up. The annual tax payment will be broken up into monthly payments that youll pay to your lender with your mortgage bill each month. The money for your property taxes is put into an escrow and the lender will pay your property taxes when theyre due. Some lenders also collect homeowner’s insurance payments this way. When your mortgage is paid off, youll be responsible for paying property taxes on your own.

You can also pay your taxes directly to your county tax collector or the appropriate government office that collects them.

Why Your Lender Cares
As part of your loan provisions, your lender will require you to pay property taxes when due. If you dont, it could consider that a default and foreclose on your property. Making all of your mortgage payments on time wont make up for missing a property tax payment, at least in theory.

Why does a lender care so much that you pay your property taxes on time? Because if theyre unpaid and the tax assessor (the county) puts a lien on the property, then the property cant be sold until the taxes are paid. Those unpaid property taxes hold more power over a lien than any other rights the lender has.

If the lender gets the property back through foreclosure, it will have to pay the unpaid property taxes” and thats a cost lenders dont want to bear.

Published with permission from RISMedia.