Property Money Saving Ideas
Property Money Saving Ideas
When selling property or land, always haggle with estate agents to get the best deal. Attempt to play off one against another to get the best service at the best price. Make sure you pick the one that is right for you.
Buy property which needs renovating/redecorating - if you can live there whilst the work is been carried out, this will save you money in rent.
Run the dishwasher only when it is full. A typical dishwasher costs about £60.00 - £100.00 a year to run with 80% of the cost due to heating the water needed to run it. Running a partially filled dishwasher two times will use twice as much energy as running a full load once since most dishwashers don't have different load size settings.
Purchase a dishwasher that requires less hot water. Dishwashers differ in the amount of hot water used in the wash cycle. The manufacturer's specifications or the Energy Guide label should list this information.
Purchase a home in an area with good schools. Even if you never have children, strong school systems are a top priority for many home buyers. This will make selling easier and increases the chances that your property value will rise.
Get the shortest loan term you can afford. Usually the shorter the term, the higher your monthly repayments, but you'll save much more in the long term due to paying less in interest charges.
Avoid purchasing a home with an "incurable defect." A busy street, no parking or train tracks nearby will most likely get you a discount, but the house value will not increase as much as other homes in the area, and you will have a much tougher job selling it when you need to.
Consider carefully before carrying out house renovations that will make your house one of the more expensive in your neighbourhood. For resale purposes, it's better to own one of the less expensive houses in an expensive area.
Consider re-mortgaging if you do not have redemption penalties on your current deal. Reductions of as little as 0.5% can save you £00's a year and £000's over the lifetime of the loan. Or putting it another way, rather than paying the Standard Variable Rate (SVR) opt for a discount or tracker rate, but pay the same every month in mortgage repayments, which will cut years off your mortgage term.
Purchase a home in a disadvantaged area as you may avoid stamp duty.
If you have a small lawn, consider getting a push mower instead of a power mower. It doesn't use any petrol, oil or spark plugs, has minimal maintenance costs, and will do the job just as well - and it will keep you fit!!
Replace your old thermostat with a programmable model - they can save you £000's over the years.
Be sure to set your thermostat as low as possible in the winter while still being comfortable. The closer your indoor temperature is to the outdoor temperatures, the lower your overall heating bill will be. If you're going away for the weekend, turn the heating as low as possible - no point keeping the spiders warm!
If you don't have a programmable thermostat, you don't need to set your thermostat at a warmer setting than normal when you first get up. This will not warm your home any faster and it usually results in excessive heating which costs you money.
Call your local utility company to see if they offer energy audits. Many offer free or low cost inspections and free information booklets that can help reduce your heating costs, or even loft insulation at heavily discounted prices.
Check for window air leaks and repair them. You can do this by placing a lighted candle near the windows. If there are leaks, use caulking to repair them.
Check to see if you feel a breeze at the bottom of your doors. Use a lighted candle and if it flickers you will know that air is passing under the door. If so, purchase door draft excluders to help block the flow which will keep your rooms warmer and use less energy.
If at all possible, install double-glazed windows in your house- Single pane windows, or windows that are improperly insulated can account for up to 15% of your heating costs. They are often low maintenance & can look nicer too, increasing the value of your home.
Turn off or lower the heating in rooms that are rarely used such as cloakrooms. If you're having guests to dinner, turn the heating on in that room a short while before they arrive - cloakrooms are generally the smallest rooms in the house, so will take hardly any time to warm up. Be careful as you need to ensure that the thermostat sensors is not located in a room that you close off, as you may actually make your boiler work harder as it tries to warm a room you have effectively shut off.
Close doors to rooms that are not often used. This will keep the boiler from heating more space than necessary.
Keep all your wardrobe doors closed. There is no need to heat your clothes during the winter.
Once your house is up for sale, mystery shop the estate agency and judge how it promotes your property. Ask for properties of similar specification and see if they recommend yours, & you will also get an idea of the competition.
Transferring assets may also be beneficial for avoiding Inheritance Tax (IHT). Most lifetime gifts to individuals or trusts are Potentially Exempt Transfers (PET's). No IHT is due on PET's if the donor survives for seven years. Transfer must be outright but watch out if the asset is sold immediately by the person who receives the gift as this could raise doubts in the Revenue's eyes.
As both husband and wife have their own nil rate band for IHT purposes you could share your assets, and write your Wills so that on first death an amount equal to the nil rate band passes to your children, and the balance to your spouse. When your surviving partner dies the nil rate band applies again. Commonly called a Discretionary Will Trust.
The most common route of purchasing a property with a partner is joint tenancy. However, if you have a partner, you can reduce your liability to IHT by over £100,000 by switching the property from joint tenancy to tenants in common. This is where each of you own a stated percentage of the property – normally 50 per cent. The next step is for each of you to make a Will, leaving your own share to your heirs. When the first spouse dies, the child or children inherit the agreed percentage of the house. Your offspring can allow you to stay using their half of the property until you die or the property is sold. When the second spouse dies, the children inherit the other share of the home.
If you buy properties to 'renovate and sell', then you will be taxed differently than if you only 'Buy and Let' properties. For instance, if you buy and sell, your gains may be taxed as Income rather then Capital Gains. This means that you need to establish how and which taxes (Income Tax and / or Capital Gains Tax) will be applied to your property investments. Once you know how tax will be assessed on your investments, then, and only then, can you establish a tax minimising strategy.
A cost effective way to own land is by 'annexing'. If you extend your fence to claim a piece of waste land at the end of your garden, then after 12 years you may be entitled to claim it as your own. (Statute of Limitations Act 1977). This is not a simple process though so make sure you use a solicitor.
Switch your mortgage immediately after redemption penalties end to ensure you don't pay the lenders Standard Variable Rate. Use draft excluders by your doors.
BTL - buy items off eBay as you can find real bargains, & if the seller delivers, this will save you time. 30. Recycle - visit house clearance sales as there is always a bargain to be had.
Contact www.saveonyourbills.co.uk who can show you how to save money on your bills.
On Buildings insurance a common mistake is to cover the house's market value (the amount it could be sold for), meaning many people are over insured and paying too much for their buildings insurance, when actually the amount you need to cover (called the sum insured) should be the rebuild value. Therefore location is less important than the value of materials, labour and architects fees. However it's important that any building policy covers the cost of an alternative residence for you if your home were being rebuilt. Commissioning a survey is the most reliable method to establish the rebuild value, but will be expensive unless you're getting one anyway when buying a new home or remortgaging an existing one. A less accurate, but quicker option is ABI's calculator, or you could simply ask an insurer to give you a rough value based on standard assumptions.
All insurance policy prices are based on risk assessments, so to cut the cost, cut the risk. Such things as getting approved locks and alarms, joining neighbourhood watch schemes will cut the cost of your policy.
Increasing the excess on your policy - This can reduce the cost by almost the amount of the excess!
Many dentists don't really need Accident, Sickness & Unemployment insurance (ASU), and those that do can often get it for half the price available on the high street.
As the global demand for power threatens to outstrip supply, prices are rising. But that doesn't mean you need to be paying over the odds. The domestic market for fuel is a competitive one and you can change supplier with a few clicks of your mouse. Your new supplier will take care of the formalities - you just pay less every month. Look at www.uswitch.com
British Telecom (BT) may seem to behave like a monopoly but it most definitely is not one. If you need a home phone there are loads of cheaper alternatives from cable companies that package your telephone, television and even broadband internet access to low-cost dial-up services, & give you access to cheaper calls using your existing BT line - sometimes even free!
If you have a mobile telephone contract with the Orange network & are paying over £30.00 per month, they will offer you free broadband connection as part of their service.
As a nation of obsessive DIY'ers, for around £100.00 you can take a course at your local adult education college to improve your skills needed to tackle most household repairs. You may even qualify for tax relief on the cost if you have BTL properties!!
Do you pay your insurance premiums by monthly installments? If so, you are probably being charged a premium of between 15-20% APR for the privilege. In other words, if your home and car insurance bill for the year is £600.00, you're paying up to £120.00 a year in interest by paying monthly. If you are in a position this year to save up for next year's premiums in advance, you can save money by paying the whole lot in one go.
Barclays Home Insurance is promising anyone aged over 25 who hasn't claimed in two years, if it can't beat your renewal quote it'll match it and give you £50.00 as well. The only fly in the ointment is the most Barclays will reduce your quote by is £100.00, so for some it may be cheaper to remain with your current provider.
Post Office Home Insurance currently gives £50.00 cash back with every policy taken out, effectively making the premium £50 cheaper than normal. This is only available for new Post Office customers, and they will take back the cash if you cancel within 12 months.
A fee of one percent of the property's value and a lock-in period of one week after written notice is received, are the kind of offers you should aim for.
Turn off lights.
Reduce number / wattage of bulbs.
Use energy saving light bulbs.
Check the times when your heating comes on & goes off - shaving a few minutes each day off the time could save you quite a lot of money each year.
Property grants are available for loft insulation & draught proofing - contact Energy Action Grants Agency (EAGA)
Means tested Disabled Facilities Grants (DFG) up to £25,000 could be available – contact your local council.
Empty Property Grants - Payable in respect of work required to bring properties that have been empty for more than 6 months back into use.
Offset Mortgages - ideal for people that have good credit balances in a linked current account.
Everyone's main home or Principal Private Residence (PPR) as the taxman catchily names it, is exempt from Capital Gains Tax (CGT) when sold, but any other properties you own attract CGT at your highest rate when sold. If you live in a property, then let it out at al later date, you will be exempt from CGT for a period.
An unmarried couple may each own a home that qualifies as their PPR but a married couple may only nominate one property and must elect jointly, unless you have separated.
It is possible to cut CGT bills by living in the second property for a period of time.
Special rules apply to properties that have been a main residence. The period when it was the main residence is exempt from CGT, plus the last 36 months of ownership. So a period when the home was rented out may still be exempted for CGT purposes.
On the purchase of a second home, the owner has two years to elect which of their homes is their PPR. They do not have to be living in it at the time. After the two years, they lose the right to make a nomination and the onus would fall on them to prove that they were living in the second property if they want to avoid CGT.
Many people do not realise that the two-year election period applies and fail to take advantage, however it is possible to revive it if a third property is purchased, or if the second home becomes your PPR for a period. This involves transferring bank, postal and electoral details for the period to prove that you were resident and perhaps even renting out your main home. Moving into a second home will mean that a person's other home becomes liable for CGT for that period, however as this will later return to their main residence, issues should be minimal.
For those who have previously rented out their main residences there is the added benefit of being able to claim up to £40,000 letting relief. This is available to anyone with a share in the property, giving a couple, even if married, up to £80,000 between them.
The amount of private letting relief that can be claimed cannot be greater than £40,000 and must be the lower of that sum, the amount of PPR relief being claimed, or the capital gains made during the letting period.
There are other factors to consider that could further reduce CGT liability. These include taper relief, which lowers CGT depending on the length of ownership, and the ability of married couples, or those in civil partnerships, to transfer part of the ownership to the partner who pays the lowest rate of tax.
For the right circumstances (mainly sole traders or husband/wife/partnerships) - Offset mortgage whereby credit balances on linked accounts are offset against residential mortgages. These not only reduce the interest actually paid, but as you don't pay tax on the credit interest you would have received on credit balances, its the Gross amount you benefit from.
Flexible mortgages to use savings (e.g. for tax or holiday funds) to reduce mortgage until the funds are required.
Repay personal borrowing ahead of business borrowing as the latter receives tax relief against interest paid, whereas the former doesn't.
Linked to the last point, raise funds in your business name to reduce private borrowing - subject to accountants confirmation to individual circumstances.
Insulate walls / ceilings.
Install solar panels to heat water or produce electricity - there will be an initial up front outlay but in certain areas there are grants available - probably more cost effective longer term although this could also increase the re-sale value of property.
Use draft excluders by your doors.
BTL - buy items off eBay as you can find real bargains, & if the seller delivers, this will save you time.
Recycle - visit house clearance sales as there is always a bargain to be had.
Utilise recycling facilities as this will reduce the number of bin bags you use.
When driving by skips, have a quick look in - its amazing what gems can be found such as cast iron fireplaces, which can easily be restored & fitted into your own home making it more desirable for resale - or you can sell it on www.eBay.com
When buying houses, furniture or other household goods, always ask for a discount.
Don't leave TV's etc on stand by as this costs £00's over the year.
Switch off appliances at the plug which could reduce the risk of starting a fire,
Wear more clothes in-doors particularly in winter.
Ask your local authority whether they have a discount price for Compost Bins - saves you money and great for the environment
Do you remember the "share a bath" suggestion? Especially important if your water is metered.
Investigate whether a water meter would be cost effective - some advice suggests if you have more people in your property than number of bedrooms, you might be better off.
Buy To Let
Don't get emotional about buying property to let. Remember, as long as the figures add up & the property is in an area where lettings are relatively easy, do it!
Don't worry if you personally would not want to live in the property. Everyone's needs are different!
Think neutral décor.
Choose hard wearing surfaces as prospective tenants do not always treat rental properties as they would their own.
Always keep receipts relating to any spending on Buy to Let properties.
Set up trade accounts - this will give you up to 2 months credit, & discounts in many stores. Also if the store is part of a chain, you may be entitled to discounts at other stores within the group without applying for a trade card at that store.
Never take out extended warranties as these tend to be expensive for the cover you get. If you have say four items (dishwasher, washing machine, oven & hob), this could cost in the region of £400.00 per annum. If you didn't have the cover, this would free up this money to purchase new goods as & when old ones become faulty. Also remember you generally receive 12 months warranty with most new items anyway & in our experience most goods last around 4-5 years.
If your Buy to Let rent is all inclusive of bills, don't supply a tumble dryer - its amazing how long people dry a pair of socks for when they are not paying for the electric bill!
Check what other houses on the street have actually sold for to make sure you're not paying over the odds - check on www.upmystreet.com
Buy property out of season to get a bargain, most people buy in the summer, so there is more competition. October to March tend to be the quietest time for the housing market, & this tends to be the best time for deals.
Build good relationships with a reputable agent - they may point you in the direction of a good deal – don't forget they usually only get paid when a house is sold!
Re-negotiate the price if the survey shows any problems, however small. You may save more than the price of the survey.
Consider buying off plan, as you buy at the price of when you pay the initial deposit, rather than 2-3 years time when the development has completed.
Learn from property mistakes - think about why you had a tenant who cost you money and implement procedures to prevent this happening again.
Don't stretch yourself too much – either financially or time wise.
Pay off residential mortgage before Buy to Let/practice debts to save on tax.
Don't buy houses that are in perfect condition, as you will tend to pay top dollar.
Make sure you sell a property in a better condition than when you bought it.
Paint your house in magnolia before selling or letting - this is a neutral colour which is less likely to offend prospective buyers & tenants, which in turn should provide you with a sale price closer to the asking price or a higher rent from tenants.
Rent a room relief - you can rent a room within your home & receive up to £4,250 per annum tax free.
Use energy saving light bulbs - these are cheaper to run, & need changing less often - electricity suppliers will often send you some free.
Ensure that you're not paying the standard variable rate on your mortgage - discounts/trackers can save £000's
Discount mortgages can save you ££'s if the Bank of England (BoE) base rate does not rise against a fixed rate mortgage - if your confident that the BoE base rate will not rise, then stick with a discounted or tracker rate mortgage.
In the USA, check to see if the purchase of an energy efficient dishwasher will qualify for a state tax credit. Some states offer tax credits on your personal income tax when you purchase an energyefficient dishwasher model.
For those people that have enquired about Buy to Let property and are "thinking about it" - do it or forget about it!!
Set your practice mortgage up on an interest only basis and ensure your personal debts are paid off in full before paying off any business debt - after all you don't get tax relief of up to 40% on your residential mortgage!
Re-negotiate your current deal with your current lender.
If they don't agree, you may be paying well over the odds so consider switching lenders.
Have a handyman available who you can turn to at short notice for general repairs & maintenance - if a lock breaks its better paying a retired gentleman for an hours work than a locksmith £150!
Get your pension fund to buy your practice.
A Few Fun Ones
Have a shower instead of a bath.
The kids will like this one - only bath / shower once a week.
Share a bath / shower (with a friend ??!!)
Go to bed earlier.