Real estate is one of our biggest and most tangible investments. However, all too often, we postpone and neglect critical repairs on our houses that we need to do as owners of real estate. This is prevalent and is mainly because the financial resources are just not there. We feel sooner or later, we will get to it. It’s called procrastination. We will wait until we have the time or the money to deal with it. Maybe other things in life are much more important. Or we may have simply lost interest in the property. Perhaps, we no longer want to invest any more moneys. Or what if there are just too many repairs that have piled up on yourself and you feel financially buried in repair work. Or is your home just simply a money trap. All of this is called “deferred maintenance”. Whether you are an investor, an absentee owner or an existing resident homeowner, deferred maintenance is the undesirable, adverse side of homeownership. So, what do we do about it … nothing? Needless to say, this is not a good idea. Let’s delve into this topic a little bit.

There is a myriad of components that make up a beautiful home as well as the land that it sits upon. Adversely, there are just as many ways for something to become damaged and/or may need quality updating. This deterioration, deficiency, corrosion, infestation or overgrowth may be caused by regular wear and tear and may by exacerbated by time, neglect and postponement of repair and correction. A do-it-yourself job may, or may not, be the best solution. Questions may arise as to health and safety conditions. Safety, soundness and structural integrity can be the worst and most problematic matters. For example, weaknesses in the foundation, water leakage, roof leaks, defects in the roof shingles, inadequacies in the electrical system or plumbing blotches, mold and other adverse environmental conditions. And just because an issue is hidden or unapparent does not mean to ignore it. Those are definitely the ones that can give us the biggest problems later on.

When we defer maintenance for the sole purpose of saving money, do we really save ourselves anything from these inevitable expenses? The answer is “no”, we don’t. However, we are saving ourselves much more money when we directly tackle the maintenance issues immediately as they are discovered, rather than to wait, and wait, and wait. There are a few reasons why. First, inflation is always in effect. We will always pay more as time and inflation gradually rises upon us. Future expenses are rarely the same as opposed to 5 years ago. So, my question is, “Why pay more”?

From a resident homeowner’s perspective, everything gets worse as we continue to ignore the need for repairs and upkeep to be done. Our homes continue to decay. Our property values decline. And in the meantime, the costs prevail intensifying the problems. For example, it may be a pest control problem, a tree trimming problem, or the need for a garage door replacement. It will get worse, and it will cost more money over time.

If you’re planning to dump this problem on someone else. Guess again. When placing your home on the market, as the seller, you are required to reveal all known issues of the home to the prospective buyer. Some of those issues may materially affect the buyer’s decision as to whether they will move forward to purchase the home. They have a right to completely know all of the issues and conditions with the home. This disclosure protects you, and no one can ever come back and say that you did not reveal these facts to them. Some of these issues are discoverable and reported by professional home inspection companies and real estate appraisers.  It would also affect your selling price, and can also show up in your buyers offer to purchase; and thus, impact the appraiser’s value of your home as likely a distressed property. Appraiser’s will note this on their appraisal reports, and which will translate into your property’s value. And based upon the secondary market, banks and lenders may also ask the seller to repair these items before any real estate loans can go through.

From an investor’s standpoint, there are accounting matters. A property may be sold in “As Is” condition, but it has to make financial sense. Included in these considerations are the deferred maintenance costs, continuous upkeep, upgrade costs showing on the financial statements and balance sheets. For more information regarding recordkeeping, please contact your professional account, CPA or tax advisor.

There are so many points that we can continue to address on this topic, but I trust that this bit of information has been helpful to you. Please feel free to call us if you have any comments or need additional information.

Yes. I’ve seen it, and I’m sure you have too. And it’s very unattractive for our neighbors to store unnecessary clutter in and around their property for years and years, but we do it all of the time. Whether it is small clutter or lots of junk, we all agree that it is never, ever a pretty sight. But why? There are a number of reasons why, and we can briefly explore a few of them.

1. No one lives there and no one cares. However, someone still owns the property. It may even be a bank-owned, abandoned property. It could also be an absentee, out-of-state, property owner who may not be aware of the condition of the property or has no one to help with it.

2. An elderly person or a disabled person who likely may be unable to physically do any outdoor de-cluttering without some type of assistance and support from others.

3. Hoarding. Someone has lived there for years and years and have allowed their possessions to collect without any plans to dispose of them. Sometimes, it is simply due to the sentimental value and attachment to their possessions. But what used to be sentimental value over the years has developed into a collection of today’s old junk now. For example, non-functioning old cars, old bicycles, rusty tools, old furniture, old toys, baby strollers, old books, boxes of old papers, outdated clothes, and the kitchen sink. After a few years, the task of junk disposal and cleaning out all of the stuff is too much for a person to tackle. So, it stays. It’s one example of urban decay.

4. Storage. A person may not be able to afford off-site storage expenses due to budget constraints. Or just not getting a portable storage shed for the backyard storage of old stuff.

To some degree, it may not necessarily be the property owners’ fault. Nonetheless, the problem continues to persist and doing nothing doesn’t help either. “But why should I clean it?”, you say. Theoretically, it’s on your property, and you can collect your old stuff if you chose to. You are absolutely right! But if you haven’t done anything with this stuff over the years by now, why continue keep it? And does being right make your property a suitable and acceptable living condition in terms of safety and comfort standards? Does it attract rats, black widow spiders, rodents and cause other environmental hazards? Does it attract home invasions, trespassers, and other criminal activity into your area?

Further, this model of homeownership can also negatively affect your property value. It can be very damaging to the essence and potential appreciation value in your home. Outside hoarding may cause and set a standard that future neighbors may follow in your neighborhood.

Dumpster rentals can cost around $400 per week. Try contacting your local City Hall to find out about assistance programs to relieve you of some of this expense by providing dumpster service at little to no cost to you. There also may be a non-profit organization in your neighborhood who may assist with professional home inspections for qualified, low income families. They may also refer you to other property disposal resources who can assist regardless of income. Contact your local church. They may be able to get volunteers to assist you with gathering and disposal of your old unwanted items. Further, check with your Salvation Army and find out if they offer any resources and volunteers for donations. Your donations are tax deductible. There are many community partners in your area who should be able to refer you to sponsored and non-sponsored support groups. Please help your neighbors, if you can. And if not, then feel free to give us a call at Help U Clean, and let us know. We may be able to help too. Thank you for being a good neighbor.

Most people often ask about the current loan rates for a 30-year mortgage.  However, few ever think about the effects of urban decay upon the value of their property; or even how it effects the value of our neighbors’ property.   When we lose value, we are losing money in our investment.   This is not much different than paying higher interest rates for our mortgage.  It can be very costly.  By allowing our own real properties to deteriorate, we are effectively imposing a detriment to our neighboring properties.  Ultimately, it affects our community at large.  Everyone loses either directly or indirectly.  Then the real estate appraisers come in and assess the appreciating or depreciating value of our home based upon its worth and recent sales history in our immediate neighborhood within a half mile to a mile or even over a 3 – 6-month span.  Look at your location.  Would you buy into that neighborhood?  Location, location, location.  The appearance of your community reflects the value of your home.  Appraisers conduct drive-bys and take photos through our neighborhoods.  You may not have a lot of money to do any major upgrades to your property.  Then again, there are a few things that we can do to improve the appearance of your home or even possibly improve the value of your property by making a few strategic choices that can be cost effective as well.