VOTING FOR HOMEOWNERSHIP

American voters feel strongly about homeownership and would oppose most policies that would make it more difficult to own a home, according to a recent survey conducted on behalf of the National Association of Home Builders by Republican and Democratic polling firms of Public Opinion Strategies in Alexandria, Va., and Lake Research Partners in Washington, D.C.

Three-fourths of voters, both owners and renters, believe it is reasonable and appropriate for the federal government to provide tax incentives to promote homeownership. That sentiment cuts across party lines, with 84 percent of Democrats, 71 percent of Republications and 71 percent of Independents agreeing with this statement. Two-thirds of respondents believe the federal government should assist homebuyers so they can afford a long-term or 30-year fixed-rate mortgage.

Further, 73 percent of voters oppose eliminating the mortgage interest deduction, a sentiment shared across party lines — 77 percent Republicans, 71 percent Democrats and 71 percent Independents. More than two-thirds of voters (68 percent) say they would be less likely to vote for a congressional candidate who favored abolishing the deduction.

The survey also finds that a majority of voters oppose several other proposals affecting homeownership including: reducing the mortgage interest deduction; eliminating the deduction for interest paid for a second home; limiting the deduction for those earning more than $250,000 per year; reducing the deduction for homeowners with mortgages higher than $500,000; and eliminating the deduction for interest paid on home-equity loans.

ROI MATTERS

If you’re looking to make some upgrades to your home this year, be sure to think about what makes sense for your lifestyle as well as what will offer the best return on investment. Start by checking out the results of Remodeling magazine’s latest Cost vs. Value report.

If you have an attic, you could be using it for much more than just storing holiday decorations and boxes of mementos. According to the report, converting part of the attic into an extra bedroom — which, on average, costs just over $50,000 — can recoup 72 percent of the cost when the home is sold. On the other hand, the addition of a deluxe master suite (an average cost of $230,000) will only recoup just over half of the investment.

If you’ve been thinking about sprucing up your outdoor space, now might be the time to invest in a new backyard deck; at an average cost of just over $10,000, this investment will recoup nearly 70 percent, the report says. When considering deck materials, choose wood over composite — it will recoup nearly 10 percent more on your investment.

Making over your garage can also be a good idea — replacing a garage door, which costs less than $2,000, recoups just over 70 percent of the total cost. But if your home is up for sale without a garage, it’s best to leave it alone. The addition of a garage costs about $58,000 and only recoups about 57 percent during resale.

Some other minor projects that might be worth the investment include replacing windows with insulated vinyl or wood models (the cost, between $7,600 and just over $8,000, is recouped by almost 70 percent), and remodeling the bathroom (cost is about $16,000 and the cost recouped is about 62 percent).

The bottom line? When making renovations, think small for an optimal return on investment

The Goal of Homeownership

Homeownership is a goal for many, whether they are aspiring first-time homebuyers, in the market for a second home or have their sights on an investment property. Whichever your goal, here is some information to help you along the way.

First-Time Homeownership:
81% of homeowners and 67% of renters polled feel that homeownership is the best investment they can make. In addition to having a place of your own, homeownership allows you to build equity.

Investment Property: Many people purchase investment properties with the intention of augmenting their incomes with the proceeds from rent. These properties may round out a growing investment portfolio or provide a second income to owners.

Vacation Home: If you’ve always dreamed of having a vacation home, you may be in luck. Home prices in many vacation hot spots have fallen. While buying property is a good long-term investment, the potential return isn’t the primary reason for buying a second home. Nearly 80% of second-home buyers purchased their home to live in and enjoy, not in hopes of making a substantial profit from investment.

34% of vacation home buyers
plan to use the property as a
primary residence in the future
and the average buyer will hold
onto the property for 13 years.

Source: Wall Street Journal, July 23, 2011