How to Read Your Gas Utility Bill & Save $$
Wednesday, July 28th, 2010 | Home Improvements | 2 Comments
When your gas bill arrives, you probably react like most homeowners—you glance at the amount owed, tear off the payment coupon, and throw the rest away. But if you use natural gas to warm your house, heat your water, and cook, there are clues lurking in your bill that can help you to better understand exactly what you’re paying for. Once you know the basics, you can use that knowledge to save energy and reduce costs.
How your gas company makes money
Unlike an electric company, which in most cases generates the power it sells directly to its customers, gas companies tend to purchase the energy from an outside supplier. Typically, the cost of gas to the gas company is more than 50% of a customer’s bill.
However, gas companies typically pass the cost of gas on to customers without a markup, according to Scott Grigg, a supervisor with South Carolina Electric and Gas. In other words, a gas company doesn’t generate a profit from selling the gas. Instead, it makes its money from the fees and service charges associated with getting the gas to you.
It’s important to remember that the price of energy—especially natural gas—fluctuates from season to season and even from month to month, just the way gasoline prices go up and down at the pump. Some of the billing procedures and terminology that appear on your gas bill are designed to account for fluctuating prices by averaging costs over a period of time.
Understanding gas usage terminology
Energy usage and other charges may appear on your bill in various ways. For example, gas usage is often expressed as an amount of energy used, rather than as a quantity of gas. Therms, BTUS, MCFs, and CCFs are all ways that your utility company might refer to the gas you’ve consumed per month.
Note that utility providers differ in the way they describe charges and fees. Most, however, provide explanations of their bills online. It’s a good idea to check your provider’s website for specific explanations of items on your bills.
BTU stands for British Thermal Unit, and is a measure of heat energy. In the United States, the BTU is an easy way to compare the usage of various types of fuels. For example, a cubic foot of natural gas contains 1,028 BTUs; a gallon of heating oil has 139,000 BTUs; and a kilowatt hour of electricity provides 3,412 BTUs.
According to the American Gas Association, the average U.S. household consumes about 72.5 million BTUs of natural gas per year, at an annual cost of $992.
Therm (or the abbreviation, “thm”) is short for thermal unit. The term often appears on utility bills and is a simpler way of referring to the consumption of BTUs. One therm is the equivalent of 100,00 BTUs.
When shopping for gas-powered appliances, you’ll see that they are rated by how much energy they consume per hour. For example, a 100,000 BTU appliance consumes one therm per hour. A 30,000 BTU appliance uses 0.3 therms per hour. A higher rating means the appliance is more powerful, but at the cost of greater gas consumption.
CCF and MCF are other ways your gas company might refer to the amount of energy you consume. CCF is the volume of gas used, and the abbreviation means 100 cubic feet of gas. An MCF equals 1,000 cubic feet of gas; one MCF equals ten CCF.
Procurement or commodity charge is the amount you’ll pay for your gas, based on your usage in a particular month. The term refers to the cost that your utility company pays to its gas provider, and then passes along to you. As mentioned above, your utility company doesn’t mark up this cost.
Gas transmission or delivery service charges cover the company’s cost of getting the gas to its final destination: your home.
The baseline allowance, also called the baseline charge, is determined by your utility provider (and may be mandated by state law). It refers to the amount of energy you’ll probably use to meet your basic needs, based on average usage in your area. Gas consumed within the allowance is charged at the lowest rates.
Consumption that exceeds the baseline allowance is charged at progressively higher rates according to a tiered rate system, usually consisting of three or four tiers. If you use more than the baseline allowance, the excess charges may appear on your bill as “amount over baseline.” You will not receive a credit for using less than the baseline allowance.
Gas cost adjustment appears either as a charge or a credit. Since gas rates vary each month, the gas company will estimate what it thinks the price of gas will be the following month or quarter. If the price is higher, then you’ll be billed for the excess in a subsequent statement in order to cover the actual cost of the gas; if it’s lower, you’ll see a credit on your bill.
Reducing your gas bill
Lowering your gas bill means lowering energy consumption. A good place to start is to conduct your own energy audit to spot energy leaks in your house and determine proper remedies.
Other strategies include purchasing Energy Star appliances and building materials, selecting energy-efficient windows and doors and adding sufficient amounts of insulation.
Appliances that consume the most power in a house are the water heater and the clothes dryer, whether they’re gas or electric. Any reduction in usage during the winter will result in lower utility bills. Use energy calculators to help determine how much energy your gas appliances use to help understand how to cut back energy consumption.
Your gas bill can help, too. Know your baseline allowance and try to keep your gas usage as close to that as possible so you’ll be paying the lowest rates available. Look on your bill for graphs that indicate the months in which your gas usage is the highest; it’s usually the winter. Be extra-aware of utility usage during those periods.
(Lisa Rogak ~ HouseLogic.com)
Tax Deductions for Rental Homes
Monday, July 26th, 2010 | Investment Property | No Comments
Maintaining a rental property typically requires a commitment of about four hours per week
From finding tenants to fixing faucets, renting out a home can be a lot of work. Yet perhaps the biggest reward for being a landlord isn’t the rent checks, but rather the considerable tax deductions for rental homes.
The tax code permits most owners of residential rental properties to offset income by writing off numerous rental home expenses. IRS Publication 527, “Residential Rental Property,” has all the details.
Writing off rental home expenses
Many rental home expenses are tax deductible. Save receipts and any other documentation, and take the deductions on Schedule E. Figure you’ll spend four hours a week, on average, maintaining a rental property, including recordkeeping.
Here are some of the most common deductible expenses for rental homes, according to the IRS. You can usually take these write-offs even if the rental home is vacant temporarily. In general, claim the deductions for the year in which the expenses are incurred:
- Advertising
- Cleaning and maintenance
- Commissions paid to rental agents
- Homeowner association/condo dues
- Insurance premiums
- Legal fees
- Mortgage interest
- Taxes
- Utilities
Less obvious deductions include expenses to obtain a mortgage, and fees charged by an accountant to prepare your Schedule E. And don’t forget that a rental home can even be a houseboat or trailer, as long as there are sleeping, cooking, and bathroom facilities.
Limits on travel expenses
You can deduct expenses related to traveling locally to a rental home for such activities as showing it, collecting rent, or doing maintenance. If you use your own car, you can claim the standard mileage rate of 55 cents per mile (in 2009).
Traveling outside your local area to a rental home is another matter. You can write off the expenses if the purpose of the trip is to collect rent or, in the words of the IRS, “manage, conserve, or maintain” the property. If you mix business with pleasure during the trip, you can only deduct the portion of expenses that directly relates to rental activities.
Repairs vs. improvements
Another area that requires rental home owners to tread carefully is repairs vs. improvements. The tax code lets you write off repairs—any fixes that keep your property in working condition—immediately as you would other expenses. The costs of improvements that add value to a rental property or extend its life must instead be depreciated over several years. (More on depreciation below.)
Think of it this way: Simply replacing a broken window pane counts as a repair, but replacing all of the windows in your rental home counts as an improvement. Patching a roof leak is a repair; re-shingling the entire roof is an improvement. You get the picture.
Deciphering depreciation
Depreciation refers to the value of property that’s lost over time due to wear and tear. In the case of improvements to a rental home, you can deduct a portion of that lost value every year over a set number of years. Carpeting and appliances in a rental home, for example, are usually depreciated over five years.
You can begin depreciating the value of the entire rental property as soon as the rental home is ready for tenants, even if you don’t yet have any. In general, you depreciate the value of the home itself over 27.5 years. You’ll have to stop depreciating once you recover your cost or you stop renting out the home, whichever comes first.
Depreciation is a valuable tax break, but the calculations can be tricky and the exceptions many. Read IRS Publication 946, “How to Depreciate Property,” for additional information, and use Form 4562 come tax time. Consult a tax adviser.
Profits and losses on rental homes
The rent you collect from your tenant every month counts as income. You offset that income, and lower your tax bill, by deducting your rental home expenses including depreciation. If, for example, you received $9,600 rent during the year and had expenses of $4,200, then your taxable rental income would be $5,400 ($9,600 in rent minus $4,200 in expenses).
You can even write off a loss on a rental home as long as you meet income requirements, own at least 10% of the property, and actively participate in the rental of the home. Active participation in a rental is as simple as placing ads, setting rents, or screening prospective tenants.
If you’re married filing jointly and your modified adjusted gross income is $100,000 or less, you can deduct up to $25,000 in rental losses. The deduction for losses gradually phases out between income of $100,000 and $150,000. You may be able to carry forward excess losses to future years.
Let’s say you take in $12,000 in rental income for the year but your expenses total $15,000, resulting in a $3,000 loss. If your income is less than $100,000, you can take the full $3,000 loss. By deducting $3,000 from taxable income of $100,000, a married couple filing jointly would cut their tax bill by $750.
Tax rules for vacation homes
If you have a vacation home that’s mostly reserved for personal use but rented out for up to 14 days a year, you won’t have to pay taxes on the rental income. Some expenses are deductible, though the personal use of the home limits deductions.
The tax picture gets more complicated when in the same year you make personal use of your vacation home and rent it out for more than 14 days. Read our story about tax deductions for vacation homes for an explanation.
(Donna Fuscaldo ~ HouseLogic.com)
Stark Company, Realtors voted Favorite/Best Real Estate Company
Friday, July 23rd, 2010 | Market News | No Comments
Stark Company, Realtors won 1st place for the
Wisconsin State Journal’s
“Star of Madison Award”
~ Favorite/Best Real Estate Company~
Wisconsin Buyers Get a Break on Foreclosed Homes
Tuesday, July 20th, 2010 | Foreclosure, Uncategorized | No Comments
Buyers got better deals on distressed properties in Wisconsin during the first quarter compared to the national average. Realtytrac, says Wisconsin buyers saved about 32 percent on homes that were in some state of foreclosure, including default, scheduled for auction, or bank-owned.
The average discount nationwide during the same time period was 27 percent.
The Wisconsin State Journal reports nearly 1,800 foreclosure-related sales took place in the first quarter in Wisconsin with an average price of about $109,000.
(WBAY-TV – Green Bay, WI)
Foreclosure Alternative: The Short Sale
Sunday, July 18th, 2010 | Home Selling, Short Sales | 2 Comments
After a short sale, you may qualify for a loan again in two years--quicker than you could with a foreclosure in your past. Image: fotog/Getty Images
By Gwen Moran
Facing foreclosure and tempted to stay in your home until the bank pulls it out from under you? Bad idea. Don’t do it. A much more graceful exit is a short sale, an agreement between you and your lender to sell your home for less than you owe. Although there’s no guarantee that your lender will let you avoid foreclosure with a short sale, new government regulations are aimed at encouraging lenders to do so.
Short sales get government incentives
Although short sales are not hassle-free, at least you’ve got the government backing you. The Home Affordable Foreclosure Alternatives (HAFA) program provides financial incentives for lenders and borrowers to avoid foreclosure through short sales or deeds in lieu of foreclosures.
Participation in the HAFA program requires adherence to guidelines—including a standard process and minimum timeframes—that speed the process, says Dallas-based REALTOR® Tom Branch, co-author of Avoiding Foreclosure: The Field Guide to Short Sales. The HAFA program is for homeowners who can’t keep their homes with the help of a loan modification.
Advantages of a short sale
- You can be a homeowner again more quickly with a short sale in your past than with a foreclosure. New Fannie Mae guidelines help you qualify for a new mortgage in as little as two years after a short sale, as opposed to three years or more after a foreclosure.
- You will have more time to make relocation plans and save money than with a deed in lieu. A short sale may take four to 12 months. A deed in lieu of foreclosure arrangement typically requires you vacate your home within 30 to 60 days of signing, according to real estate attorney Lance Churchill.
- You can receive up to $3,000 from your lender for moving expenses at the time of closing of a HAFA short sale or a HAFA deed in lieu of foreclosure. Relocation funds are part of the incentives of HAFA, but not necessarily for other short sale or deed in lieu programs of the lenders.
- You can help your community’s home values. Because the lender often receives a higher amount of the remaining loan balance than it would from the sale of a home after a foreclosure, short sales help support home values in the surrounding community.
Disadvantages of a short sale
- Your credit score will take a severe hit. But that would happen anyway with a foreclosure. Fair Isaac, creator of the FICO score, says foreclosure and short sales have virtually identical impacts on your credit score. VantageScore—a company that has created a credit score model for consumers—says a short sale will lead to only a marginally lighter hit when compared with foreclosure.
- You may owe additional taxes. In the past, if your outstanding mortgage was $100,000 and your lender accepted a short-sale purchase offer of $90,000, you were liable for income tax on the forgiven $10,000, says Harlan D. Platt, economist and professor of finance at Northeastern University in Boston. However, the Mortgage Forgiveness Debt Relief Act of 2007, which runs through 2012, generally allows taxpayers to exclude income from the discharge of debt on their principal residence in some circumstances. Full relief is available only if the amount of forgiven debt doesn’t exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Consult a tax professional and an attorney to minimize or avoid this liability.
- In some states, your lender may still be able to come after you for the difference between the short sale price and the amount needed to pay off the mortgage. Your actual agreement with your lender and state and local laws and regulations spell out the details. Consult a tax professional and an attorney to minimize or avoid this liability.
How to proceed with a short sale
- Find a qualified REALTOR® experienced in short sales. Short sales are tough to navigate, and they’re further complicated by your loan type—FHA vs. Veterans Administration vs. conventional loans. Real estate agents who specialize in short sales will know the proper steps and order of the steps involved. They’ll also be able to navigate the many parties involved in the process and over-burdened loss mitigation departments. Look especially for agents who have Short Sales and Foreclosure Resource (SFR) Certification, which requires specialized training.
- Gather evidence to support your need for a short sale as opposed to a foreclosure. You’ll need to prove that you have little or no equity in your home, you’re behind on your payments, and you’re no longer able to afford your home. You’ll need to write a hardship letter to the lender describing your circumstances, such as a divorce, job loss, illness, death, or other event that has impacted your income.
A short sale can be a time-consuming process, but if you can avoid foreclosure, it’s worth it in the long run.
Thinking you might need to do a short sale? Contact HomeTeam4u ~ We can help!
THE DRIP….
Thursday, July 8th, 2010 | Adventures in Real Estate, Home Buying, Home Selling | No Comments
THE DRIP….
It was a gorgeous day! I headed out to take some marketing photos of a property. When I arrived & started to take some outside shots… a few of the front, a few of the wooded outside area – then I headed in to get shots inside of the property. The property had a main level & a loft. I start to take pictures of the main level… then I hear DRIP, DRIP… wondering what the heck is dripping I start to look around… I head to the main level bathroom-the drip seems to be getting louder – I flick on the lights & notice the bath mat by the tub is very wet – then I look up… several spots on the ceiling are wet & the light fixture above the tub is leaking water making the dripping sound.
Slight panic… I decide to find the source of the water. I run up to the second level… as I head into the upstairs bathroom I notice the carpet outside of the bathroom is wet. I turn on the light & step in to the bathroom – the floor is covered with enough water to cover my foot – then I notice the pipe that connects the toilet to the wall is shooting water EVERYWHERE – to turn off the water I turn the knob on the pipe & slowly the water starts to stop spraying… I flush all the water out of the toilet. Whew! The water source has been stopped. I start to search for towels to clean up the water – towel after towel is used to get the water out of the upstairs bath.
Next, I head down to the main bath to see if the water has stopped – the water is still dripping. So I figure I had better try to dry out the light fixture. I grab a chair & head to the bathroom … I climb up & carefully start to wipe the water away from the fixture…things are going well so I decide to pull the fixture down to get any remaining water… WHOOSH! I am bombed with a huge gush of water in the face. At that moment, I realize I just got blasted in the face with toilet water. What can you do, but laugh !?! I manage to get off the chair & dry off.
Looking back, I’m so glad that I happened to pick that day/time to take photos of that property – probably saved the owner thousands of dollars in water damage – I can only image what would have happened if the water would not have been turned off for days.
The cause of the water leak was determined to be from the City turning up the water pressure by 15% which caused the water pipe to the toilet to break.
What People are Saying…
Tuesday, July 6th, 2010 | Home Buying, What People are Saying | 1 Comment
“I just wated to say thank you for helping me find my home.
I ♥ IT!
You made the process easy & fun. I will definitely spread the word! “
Faith G ~ Madison
406 Maple Ave, Madison ~ Cape Cod ~ Atwood-Schenk Neighborhood
Thursday, July 1st, 2010 | Home Buying, Home Selling | No Comments
ATWOOD/SCHENK NEIGHBORHOOD! LOCATION & CHARM! Red Brick 3 bdrm, 1.5 bath Cape Cod boasts gleaming hardwood floors, charming archways, natural trim & an impressive wood burning fireplace. Main floor master bdrm & sitting room can be used as a main flr family room too! Wonderful fenced yard & gardens to be enjoyed from the deck or the artfully crafted fieldstone patio. EZ access to bike path, Lake Monona, Olbrich Gardens & downtown! 1598646 Jen Stauter & Matt Kornstedt 608-345-7943 or www.HomeTeam4u.net
ADVICE FOR BUYERS AND SELLERS
Thursday, July 1st, 2010 | Home Buying, Home Selling, Market News | No Comments
BUYERS:
SELLERS:
likely within your desired timeframe. The blizzard of new inventory that’s
recently come on the market should slow down as we move into summer.
After all the credit assisted closings have occurred at the end of June,
we’ll really know where we stand. Expect demand to look much like a year
ago in the second half of the year, but without the credit assisted boost
in the lower price ranges. If you’re not within 95% of a realistic selling
price, you’re probably still wasting your time.
(Stark Company, Realtors ~ Market Source Newsletter)
What Would MacGyver Do? In an Emergency, Reach for the Duct Tape!
Monday, June 28th, 2010 | Home Improvements | No Comments
We’ve all had them: the clogged drain, the ripped vacuum hose, the unsightly hole in the wall. Home repair emergencies like these are the last thing you need when you’re running out the door, running after the kids, or fielding other household chores. Channel your inner MacGyver by taking advantage of one common household item the classic action hero made famous: a roll of duct tape.
We’ve collected some MacGyver-inspired ideas from the Internet.
What MacGyver did:
Used duct tape to seal a hole in a hot air balloon, allowing him to escape his pursuers.
What you can do:
- Fix a slow-running toilet. Clear the clogged flush passage with wire, then empty the water tank and seal the passage hole with duct tape. Fill the tank with a quart of vinegar and leave overnight.
- Weatherproof windows. Use strips of duct tape to make windows air tight until you can fix or replace them.
- Make a temporary roof shingle. Wrap strips of duct tape across a ¼ inch thick piece of plywood cut to size.
- Tie off loose wires. Wrap small, thin strips of duct tape around exposed ends.
- Patch holes and tears in duct work, dryer vents, and a torn vacuum hose to temporarily seal leaks.
(HouseLogic.com)