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How Energy Efficient Upgrades can Increase Your Home’s Value

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Energy efficiency

Adding energy efficient lighting is a great way to increase your home’s value.

Energy efficiency upgrades can not only shrink your utility bill; they can also increase the value of your home.

Homebuyers are becoming increasingly aware of the benefits of energy-efficient homes. In fact, they’re often willing to pay more for homes with “green” upgrades, says Sandra Adomatis, a specialist in green valuation with Adomatis Appraisal Service in Punta Gorda, Florida.

Just how much your home will increase in value depends on a number of factors, Adomatis says, like where you live, which upgrades you’ve made and how your home is marketed at sale time. The length of time to recoup the costs of green upgrades also depends on the energy costs in your area.

In 2014, upgraded homes in Los Angeles County saw a 6 percent increase in value, according to a study from Build It Green, a nonprofit based in Oakland, California, that works with home professionals. Upgraded homes in Washington, D.C., saw a 2 to 5 percent increase in 2015, according to a study Adomatis authored.

While upgrades like a gleaming new kitchen or a finished basement may give you more bang for your buck than energy-saving features, going green has its benefits. Here’s where you can begin.

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Find out how much energy your home uses

Getting a quick energy assessment or a more thorough energy audit can determine how much energy your home uses, as well as which upgrades would make the most sense for your home and your finances. An audit may include an energy rating, a number that indicates how energy efficient your home is and how much it will increase if you make recommended upgrades.

The Department of Energy website lists ways to find assessors in your area. The Environmental Protection Agency’s Energy Star program offers assessor and advisory services to help you determine what to upgrade. Your utility provider may also offer energy audits.

The cost varies depending on location and who’s providing the service. Your utility company may offer an assessment for free or at a discount. A full audit may run $300 to $500 depending on the complexity, according to Don Knapp, senior marketing manager with Build It Green. You may not want to pay for a full audit unless you’re planning to take advantage of it with major upgrades.

Once you know where you can improve your energy use, begin by making the changes that are most affordable and have a quicker payoff, Adomatis advises. Then consider whether the costlier ones are worth the investment. Keep in mind that tax credits and financing options are available for energy efficiency improvements.

Here are some common energy upgrades, from least expensive to most.

  1. Insulation. A 2016 Cost vs. Value report from Remodeling magazine found that the average attic air-seal and fiberglass insulation job costs $1,268, with an added value to the home at resale within a year of completion of $1,482. That amounts to a 116 percent return on investment. And according to Energy Star, homeowners can save $200 a year in heating and cooling costs by making air sealing and insulation improvements
  2. Appliances. Your appliances account for about 15 percent of your home’s energy consumption, the DOE says. Certified clothes dryers can save you $245 over the life of the machine, according to Energy Star. A certified dryer from General Electric can run from $649 to $1,399.

When upgrading, look at the kilowatt-hour usage of a new appliance and compare it to your current one — a good Energy Star rating doesn’t necessarily mean it will use less energy than your existing appliance, Adomatis says.

  1. Heating and cooling systems. These systems account for about 43 percent of your energy bill, according to the DOE. Replacement costs for an entire HVAC system — heating, ventilation and air conditioning — vary widely depending on equipment brands and sizing but may run several thousand dollars. Energy Star estimates you can save 30% on cooling costs by replacing your central air conditioning unit if it’s more than 12 years old.

While addressing your home’s heating and cooling systems, bear in the mind that leaky duct systems can be the biggest wasters of energy in your home, according to Charley Cormany, executive director of Efficiency First California, a nonprofit trade organization that represents energy efficiency contractors. The cost of a professional duct test typically runs $325 to $350 in California, he says.

  1. Windows. Replacing the windows in your home may cost $8,000 to $24,000, and could take decades to pay off, according to Consumer Reports. You can recoup some of that in resale value and energy savings. Remodeling’s Cost vs. Value report found that installing 10 vinyl replacement windows, at a cost of $14,725, can add $10,794 in resale value. Energy Star estimates that certified windows, doors and skylights can reduce your energy bill by up to 15 percent. If you’ve already tightened the shell of your home, installing a set of new windows may not be worth the cost. But the upgrade may be worth considering if you live in a colder climate.
  2. Solar panels. EnergySage, a company offering an online marketplace for purchasing and installing solar panels, says the average cost of a solar panel system is $12,500. The payoff time and the amount you’ll save will vary depending on where you live. Estimated savings over a 20-year period in Philadelphia, for example, amount to $17,985, while it’s more than twice that amount in Seattle: $39,452, according to EnergySage.

Last: Let Buyers Know

When it comes time to sell, your real estate agent can help you market your home as energy efficient. Provide your agent with utility bills or your energy rating, if you received one with your audit, to include when describing the house on a multiple listing service, or MLS.

There’s a growing trend in the real estate industry to make energy upgrades visible, Knapp says; energy disclosures are now a common practice in cities like Berkeley, California, and Chicago. “If it’s reflected on the MLS,” Knapp says, “it’s more likely to be reflected in the resale value.”

Bottom line: If you weigh the costs and savings carefully, going green can be worth the investment.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: mburge@nerdwallet.com

This article was written by NerdWallet and was originally published by The Associated Press.

NerdWallet is a Lake Homes Realty / LakeHomes.com content partner providing real estate news and commentary. Its content is produced independently of Lake Homes Realty and LakeHomes.com.

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Tips for Celebrating Christmas on the Lake

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ChristmasFamilies everywhere are planning for the holiday season. If you own a lake home, it can be a beautiful Christmas getaway for you, your friends and your loved ones.

Whether your family celebrates Christmas, Hanukkah, or any other holiday, here are some tips to help you get ready for a fun, relaxing holiday at your lake home.

Getting started

Invite guests well in advance. A group email or online invitation can help with this. Keep track of who will be spending the night, and when they will arrive.

For overnight guests, plan sleeping arrangements ahead of time. For example, older family members might not appreciate climbing the stairs to an upstairs bedroom, while children can often share rooms.

A warm, inviting fireplace can get anyone in the holiday spirit. Clean out any wood-burning fireplaces, and remember to open the damper before lighting.

Be sure to send directions ahead of time to any first-time guests. Many lake properties are situated in secluded, rural areas with limited cell phone or GPS service.

It’s cold outside! People often underestimate the chill of a lake in the fall. Packing a few extra blankets, jackets and sweatshirts can help everyone stay cozy.

Planning the menu

This is one of the biggest expenses of a family gathering. Whether you “go potluck” or bring everything yourself, be sure to plan ahead! Coordinating with your family members can save you hours of work.

If you don’t live at your lake home, make sure you can either transport the food safely, or have a reliable grocery store nearby. Remember that many stores close (or close early) on Christmas Eve, and don’t open again until the 26th! Raw meat (such as a Christmas turkey) should always be kept in a cooler if it’s being transported more than thirty minutes.

The big dinner is important, but remember to plan for all the other meals, too! Breakfast foods, coffee, snacks, and other essentials are also necessary. Tupperware or other storage containers are a great idea, too, especially if you have a large family.

If you don’t thought the idea of cooking a huge meal, consider ordering a turkey or ham from a nearby market or grocery store. Ordered in advance, these can usually be picked up on Christmas Eve or Christmas Day.

You Shouldn’t Have!

If you plan to exchange Christmas gifts, be sure to let everyone know ahead of time! Remember, many younger families (especially those with children) cannot afford to buy gifts for everyone at a large gathering. Today, many families choose not to exchange gifts, or limit their gift-giving to the children or grandchildren. Others minimize things with the time-honored “Secret Santa” method. That way, everyone can concentrate on what’s important – spending time with those they care about.

If you do exchange gifts, make sure there is a place to store all the presents! Even if you don’t have a Christmas tree, a spot near the fireplace (well away from the flames) can work just as well. Or you can make a mountain of gifts on the dining room table!

Having some wrapping paper (and tape) on hand can be a real life saver. After the kids have gone to bed, wrapping gifts over a bottle of wine is a great way to close out Christmas Eve.

What to do, what to do…

So the big day has come, dinner is finished, and all the gifts are unwrapped. What comes next (other than digesting)?

If you’re looking for things to do, chances are there are plenty of activities near your lake home! Even though it’s too cold to go swimming, you can still enjoy the local community attractions. Check the community calendar in the weeks beforehand for Christmas parades, plays and other family-friendly events.

If it’s not too cold, a walk around the lake is a great way to enjoy the beautiful outdoors. Or maybe a game of touch football?

Board games, looking through family albums, and watching “It’s A Wonderful Life” are time-honored traditions, too. And there’s nothing quite like watching a winter sunset over the lake from behind a steaming cup of coffee or hot chocolate.

Whether you’re planning a huge family gathering or a romantic getaway for two, we wish you a happy holiday season, and a happy new year.

 

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Lake Homes Realty now licensed in Maryland for Real Estate Brokerage Services

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Home Not Selling? The Two Real Reasons Why (and How to Avoid Them)

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