Archive for November, 2007
I was inspecting a home yesterday where the owners had done a nice job taking care of it, and they added a nice porch to the backyard. The house had very little in the way of problems, but it had one fault that could have been so easily avoided: water damage due to a bad gutter install.
I think that the homeowner had installed the gutters themselves. The front yard gutters were great. Everything that I want to see. Water was collected from the roof and diverted away from the house through extensions on the downspouts. Perfect. I believe that the owner must have been worn out after the front, because there were two major mistakes on the back yard gutter system. There were no extensions or anything at the base of the gutter downspout tube. Water just splashed down onto the ground. This caused the base of a door to start rotting, but it could lead to more issues with the structure of the porch and with the foundation. This was not the end though. There were no caps on the end of the gutter runs, so water flowed out of the ends to whatever was below. On one end, it was a seat built into the porch. The framing for the porch was rotting away, so the seat was a swing. I could just see my kid playing on that seat, then having it collapse.
Gutters are not essential on a house. Proper grading can divert water away from the building, so damage from moisture penetration can be avoided. I recommend gutter installations to my clients, because I know that a good gutter system can get the water from the house quickly. Foundation companies make this suggestion too. Water is the biggest enemy of your building, so handling its path around your home should be of concern to all homeowners.
Gutters seem to be the last item that we want to take care of. I realize that cleaning them is a chore, but there are products to help you with this. I know that they can be easily banged up when doing yard work, but they are also easy to fix, with parts being reasonable in cost. Some complain that they are unsightly, but they could be the same color as your trim, so that you will not notice them. Give your gutters some tender loving care, and your home will thank you.
Financial freedom is the concern of many of us, and we frequently here the phrase “put your money to work for you”. Buying stocks or mutual funds is the first step on the way to these goals. I wanted to give you some background on my qualifications on this topic, so you will understand where I am coming from, since I am by no means a financial advisor. I then wanted to go over some terminology for your better understanding. The next post in this series will deal with an investing strategy.
When I was a senior operations manager, I had the task of analyzing the operating metrics (financial numbers) for my location. I had to create budgets, and find ways to meet those goals. I moved into some corporate training where I taught MIS classes to new managers. These are the same reports that investors use to analyze a firm when deciding to buy the stock. So I do have an understanding of these numbers, even though I am not a financial planner. Since I oversaw a group of managers (and because I saw that participation in the 401k was low), I took it upon myself to educate my staff on this investment vehicle to encourage their involvement in saving for their own future. Now on my own as an inspector, I have been directing my own savings in stocks and funds. I may not be the most qualified, but I do have a clue on the subject.
Firstly, I want to mention the name of some investment methods, so you can see what might apply to your need. A 401k or 403b are retirement accounts provided by your employer. These two forms of saving are virtually the same; the major difference lies with the type of firm that you work for, and what the government dictates that they can offer you. Each firm is slightly different, so I will give you a generality. You will tell the human resource department how much of your salary that you want to invest. The larger the number is better for you, since you save more. The firm matches your contribution up to a certain percentage of your salary, which is typically set at 6%. This means if you put in $10 each week that your employer will give you an additional $10 for that account. You just got an instant raise, sort of. As long as you keep the money in the account until retirement, you will not be asked to pay capital gains tax, which is the tax we all want to avoid. You can borrow money from yourself by seeking a loan from your 401k account. This has advantages and disadvantages. The interest you pay on the loan is going back into your own account, so you are paying yourself interest. However, your money is no longer earning the interest paid to you by the stock or fund that you are invested in. You will also have to pay fees to the service company for the account, which you would have to pay for any other loan, but you will want to compare the fee amounts. The next common method is the IRA (individual retirement account). This is similar to the above accounts in that it is designed for you to keep your money in it till you retire. The standard amount of money that you can deposit in one year is $2000. These accounts are available from your bank or other financial institution. The next account that you should become familiar with is the 529 account. This is a college savings account to help you pay for your child’s education. This money will also be taxed by capital gains if you withdraw it before your child enters the college years. Before your child goes to college, money can be withdrawn without an undue tax burden for educational materials, like a computer. If your child obtains scholarships, you can take the money out of the account without significant penalties too. Lastly, you may hear of tax deferred accounts or other investments, but I am keeping it simple for a new home owner, so my last account is a brokerage account. To buy stocks or funds, you need a broker to represent you in the transaction. The money and the investment purchased is handled in an account form that firm, called a brokerage account. Some firms like Charles Schwab specialize in this type of account, but there are also internet companies that set up these accounts, and now you can go to your bank. These firms charge fees based on how you do business with them.
All of the above methods can place your money in a mutual fund. This fund is an investment vehicle that purchases and sells stocks on your behalf under one roof. You own a share in the fund, but not the particular stock. A stock (also called an equity) is a share in the company. The company creates various kinds of shares from preferred to common. You will be investing in common stocks, which means you are a general owner without certain privileges. Both mutual funds and stocks are divided up into three categories: growth (aggressive); income; and value. You are supposed to have a balance of all three. When you are younger, it is suggested that you take on more risk. You can afford to loose money, because you have time to regain it, so you go with growth. When you come towards retirement, you move more of your money into income, since you want to keep up that monthly income flow to pay bills. Value is the type of stock that has made the likes of Warren Buffet rich. Dividends can be paid by any of these stock types. This is the money paid to you by the company for owning their stock. It is your share of the profits. Not all stocks pay dividends. You will hear the terms load and no load funds. One way or another you will have to pay the broker for buying and selling your investments. For mutual funds, you can pay a load (charges) from the money invested, or you can pay fees in away from the actual money invested in the fund (a no load). The amount of money that you end up paying to the brokerage firm can be less with a no load fund.
Alright, this was a simple overview, but I think that covers your basics. In the next post, we will go over your investment strategy.
I just ran into an announcement that the FTC is looking into advertising making claims of being green or eco-friendly. The new rules should be in place for 2009. The last set of rules on this topic came in 1998.
I have been asked many times in the past months as to what products are “green” for the home. As an inspector, I try my best to keep up with the latest products, and the latest trends in homes, but at times I wonder why a manufacturer chose to label a product as environmentally sound. I like to know the reasoning behind some claims, because I feel that they are applying a buzz word to a product to help sell it. This is happening more with paints. I read trade magazines, and the product reviewers seem to be facing the same conundrum that I am encountering.
I realize that the FTC has to take its time in developing its guidelines; that is just the wheels of government in play, but for the consumer, we are in a buyer beware phase now. My favorite claim to being environmentally friendly came from a furniture store. The ad stated that they had to travel the world for this furniture, so you would not have to, therefore they helped the environment by preventing all of us from traveling to buy that end table. Interesting argument. I guess that I should tell my wife that I am going to have to cancel my trip to Morocco for that rug for the hallway.
When it comes to some reasonable economic views of the environment, I think you should read the book The Undercover Economist. Mr. Harford makes some good points about being environmentally sound in economic terms. Mainly, we should not buy on impulse, just because we think we are helping the environment by our purchase. Take the time to understand the product we are acquiring, and does it meet our own definition of green before the purchase. This post is more along the lines of a forewarning. The moral is standard: do not believe everything you see.
Realtor associations are coming out with campaigns to encourage people to realize that all real estate is local. Banks and financial institutions that are still standing are refocusing on their retail side of providing mortgages. (Much of the mortgage problems banks are having come from the investment side of the banks. The retail side sells loans directly to the consumer, while the investment side bought loans bundled as investments from primarily predatory lenders.) Housing prices are coming down in many parts of the country (however, here in Houston, prices have had a slight gain). Lastly, the news seems grim for the American consumer (although sales reports from Black Friday appear good). Should we declare it a buyer’s market in the real estate industry?
The reason that I pose the question is that one Realtor association said the evidence still points to it being a seller’s market, because of the slight gain in home prices for their area. The fact remains that buyer’s seem to be staying away from the market. This is a traditionally slow period in real estate sales. Who wants to move before the holidays or during winter? Sales for homes have dramatically decreased all over the nation. Buyers are considering their finances, and consumers have expressed fear over their mounting credit debt. This has led many to wait and see what will become of this situation, before feeling secure enough to buy.
The number of foreclosures is taking an upturn, which we should be prepared to see continuing. Many who face foreclosure do not seem to realize that there are steps that they can take to prevent it from happening, but they need to act early instead of waiting till the last moment. It would be nice to see the media placing this message into the public forum more often, because those people in trouble do not seem to be receiving or comprehending it. The foreclosure crisis is starting to effect urban redevelopment, which is a shame for our nation’s major cities. I think one of the great trends of this past real estate boom was the fact that individuals were looking back to city centers, instead of moving further out. These revitalized centers were also benefiting the poor to a degree.
The interesting fact is that our mobile society may become more settled. Employees may request compensation from large corporations that want to move them about. We also might not pick up to move somewhere with the hope of finding a better life. We may just want to stick close to family. With rising fuel costs, we probably will also want to live nearer to work or to the activity that dominates our life. Both facts bode badly for the building industry, unless they specialize in revitalizing urban areas, like a CDC.
What does all of this mean to the buyer? In most of the country it is a good time to purchase a home. You should go through a bank, and you should take your time to look for the property that appeals to you as well as fit your needs. Investors will find many opportunities coming along the horizon, but I would suggest that you do your homework on how you we handle the property. For sellers, this may be the time for you to cut your loses; the future does not seem bright for you, but Realtor associations around the nation are still predicting a good year for home sales next year. Maybe they are right.
Water is becoming a precious commodity in many parts of our nation. Texas has only come out of a long drought this year. Water rights and the distribution of water are taking center stage in many discussions now in state governments, and water restrictions are common place in many communities. How will our gardens grow without unlimited access to this resource?
Xeriscaping commands our attention when considering our gardening plans. The real idea behind this method of gardening is to include plants that are native or naturalized to our area. These plants will not require additional watering once established. Plants can travel along certain longitudunal ranges on our globe, but when removed from that zone, they need help to maintain the features that we chose them for. The best way to determine if a plant can do well in your garden without much extra help is to learn about its origins. Rodale press has many fine books going into plants, but you may find that someone has written a book about your area. Those annoying little plastic tags stuck into the pot have a good deal of information about the habitat of a plant, so read before you buy.
There are steps we can take to encourage our plants to become better at water usage though. Firstly, any plant will need to be watered well until it is established in its new found home. Watch for signs like drooping leaves to see when they might need water. The roots need to stretch out to find water in the new soil. They have not had to work hard in all those containers that they have been brought up in. After the establishing period, your plants roots will have acclimated to its new environment, and you will see new growth springing forth. Now it is time to teach your plant a trick. Many new homeowners water their garden well when they first move in, but as time goes on this chore falls to the side, and the plants suffer. Instead of maintaining a watering schedule that is consistent with establishing a garden, you will want to instruct your plants to grow their roots deep into the soil. You can accomplish this by deep watering. By watering an area heavily to let the water soak down into the ground, instead of staying on the surface, your plants roots will grow down to this water source. Once the roots are there, you can water less often. I water once a week. I saturate the soil in a given bed, and then move on to the next bed, so the water has a chance to sink in. I then return to this bed for another watering, so I force the water down deeper. I eventually come to the stage that I only water when there has been no rain for some time. This technique is great for grass. Grass is the real water hog of our gardens, but grass roots will also search their way down for water. I water by garden hose to accomplish this training.
If you will not water by hand, I think the next best method is drip irrigation. Sprinkler systems water leaves instead of the ground. Plants take up the water by their roots, so watering the leaves makes no sense. I have also repaired far too many sprinkler systems to know that they are easily damaged. I have also seen the damage that these systems do to homes as an inspector. Drip systems provide the water to the plant’s base, thus preventing water to evaporate before it can be used by the plant. Leaving moisture on the leaves encourages disease to afflict your loved ones. Another method to save on watering is to plant before your rainy season to let that water help establish your plants. This works with perennials, but annuals need to be planted at their proper time.
It is a rainy, dreary day outside my window, but I just received an e-mail reminder that it is coming time to renew my zoo membership. On Saturday mornings, I take my son to his German school in the village at Christ the King Lutheran Church. (By the way, this is a gorgeous church with many events going on there, notably the Bach Society). While my son toils away learning the tongue of his ancestors, my daughter and I head over to Hermann Park. We are there most Saturday mornings. The park is a real spectacle on these mornings. Bridal and quincinera photographs are being taken all over the park, as well as young ladies having “fashion” photos taken by boyfriends or amateur photographers. My sixteen month old daughter will imitate their poses, waiting for me to snap a photo. Our main goal on many days is to take some time strolling through the zoo.
I purchased a membership because of my frequency there. The zoo is a great place for a leisurely walk. Walking through the primate area is fascinating. Some mornings we are treated to death defying acrobatics. My daughter screams with delight as the elephants go through their morning rituals. The most fun has to be the ground squirrels going through their morning panic. I wonder if we humans appear that way on our way to work. The children’s zoo is of course the place to play. My daughter has discovered the wonders of the carousel. Even after having gone with my daughter, my son makes the request to go too. On occasion, we will have a family day there on Sunday. My daughter insists on showing her mother all of the wonders of the day before.
You may well consider buying a family membership to the zoo. It helps the zoo, and if you make use of it, you may find that you will have some nice walks and memories.
Statistics for my area show that crime has gone down in past years, but securing your home is still a priority. There are many options; some of which can become problems for you when selling your home. I have found that people will have complaints about any security system, but we still want our home protected.
Looking at tactics of thieves in my neighborhood has led me to believe that dogs may be the best prevention scheme. A barking dog scares many thieves, since there is no way to know how the dog will react, or who will hear that dog. This option has its own hassles, but it is nice to have a family friend.
Home security systems, wether monitored or not, are the next best defense. The alarm will frighten some thieves, but in one instance that I am aware of, it caused the robbers to quickly go in and out of the home, so it was not entirely effective. The main complaint that I hear, which causes clients to stop using these systems, appears to be the sensitivity of the alarm. Alarms sound when the homeowner does not want the alarm. When the police have to come out three times, they start to charge the resident for the call. Many of theses occurrences can be prevented by some education over the use of the system, or a service call by a technician to repair some wiring. These systems do not need to be monitored by a company to make them work. The police and the fire department will not come out, but the alarms will sound.
Going down the list, the portable monitor which detects motion to sound its alarm is an option. These units only secure one room, so several are needed for an entire house. Mostly these units are used in the room with the most valuables. I have had some clients complain that the units are hard to set properly, so they end up not using them.
Burglar bars are still common in many neighborhoods. These can be quite decorative, and as long as all windows are covered, they are effective. My issue with them has to do with the style of securing them to the building. If you have a fire in the home, these bars should be easily opened by a keyless system from the interior. No other method will allow those inside escape a fire quickly. Few bars fit this criteria in my experience.
I have seen many home grown security systems. I never could understand the family that boarded up all of the windows and exits to their backyard. That was extreme prevention. I should mention an interesting security method that one owner developed. He used a clear sheet of thick plexiglass on the inside of the window. He held it in place with a simple knob arrangement. It might not have been the easiest to remove in a fire, but it could be. Since it was clear, he still enjoyed the view, but it made it difficult for a thief to gain access.
Whatever means you choose, think about how it works, does it meet your needs, will you consistently use it, and does it pose other safety issues. I suggest that you speak to friends and family to see what they think of their security means. Having a good relationship with neighbors is a good defense as well.