Category Archives: Real Estate

Make the Most of Your Tax Refund in 2017

Tax refund. Next to the words “pay day” and “debt free,” these are my two favorite finance-related words. Whether my annual tax refund is a modest sum or a mid-size windfall, I am always happy to see my refund directly-deposited into my checking account. Once you know it is on its way, knowing how to make the most of your tax refund can be a daunting task.

Still haven’t submitted your 2016 tax returns? If you have a simple return, such as a 1040-EZ, I recommend completing your simple return with E-File.com today. You can complete your Federal return for FREE and receive free support along the way. And FinanceSuperhero readers can receive a discount on state returns by using this link – $6 Off State Filings With Coupon Code “6OFFSTATE”.

If you’re planning to complete a 1040A or require additional schedules, the team at Liberty Tax has local offices in your area to help you every step of the way. Other tax preparation services come and go, but LibertyTax has been helping people file their taxes the easy way since 1997.

Receiving a tax refund is a great opportunity to improve your financial outlook. Follow these 9 pro tips to make the most of your tax refund in 2017!

The FinanceSuperhero Guide to Taxes – Make the Most of Your Tax Refund

Assuming you have a tax refund coming your way, you could be on the verge of changing your financial picture.  With great opportunity comes great responsibility! The following advice will help you to make the most of your tax refund and make significant progress on your financial journey. I recommend following the steps in numerical order.

1. Give a Portion of Your Tax Refund to a Charitable Organization

Longtime readers will not be surprised that I am suggesting giving as the first step to make the most of your tax refund. As previously mentioned, Mrs. Superhero and I have placed Giving at the top of our monthly budget. Giving aligns with our values, and helping others provides us with much more satisfaction and enjoyment than buying more stuff or eating delicious food.

I strongly believe that giving 10% is the best way that we can make a charitable contribution prior to reaching financial independence (at which time we will significantly increase our giving). We have always done this, dating back to the time when we faced a mountain of debt, and we continue to do so today, even though we are only a few months away from carrying no debt other than our mortgage.

Why? As I mentioned, we believe helping others is both a calling and the most satisfying use of our money. Giving is also a strong reminder that money is not something to be hoarded out of greed. We want to value money and practice good stewardship, but we also want to remain far removed from the love of money.

Many people reject giving in favor of keeping their money strictly to themselves. Ironically, it is usually these same people who senselessly give their money to big banks and other financiers in the form of outlandish interest payments on cars, boats, and other stuff.

Personally, I would rather give in a meaningful way. Even if you give 1% of your tax refund, you will help others and begin to change the way you view money.

2. Increase Your Savings and/or Emergency Fund

When looking to make the most of your tax return, simply saving money can be a wise choice.
When looking to make the most of your tax return, simply saving money can be a wise choice.

After supporting societal progress by giving, use your tax refund proceeds to improve your liquid savings. Unless you are an extremely high income earner or have a stable passive income stream, you absolutely must have an Emergency Fund. If you do not have one, consider this a full-blown, alarm-sounding crisis that must be addressed immediately! Statistically-speaking, there is close to a 100% chance that you will experience some form of an emergency within the next decade, so be ready!

While I recommend maintaining an Emergency Fund of at least 3-6 months of minimum living expenses, you may also wish to establish an additional Opportunity Fund. I do not specifically recommend amounts or figures for this fund, and you may wish to skip it entirely in favor of moving onto Step 3. However, an Opportunity Fund could allow you to make a fun, somewhat impulsive decision without any accompanying feelings of guilt or regret.

3. Get out of Debt – Once and For All!

After you have given and increased your security via your Emergency Fund, you are fully-prepared to take on the primary barrier standing in the way of Financial Independence: Debt.

The sooner you eliminate your non-mortgage debts, the sooner you free a significant portion of your monthly income and simultaneously gain the freedom to invest in tax-advantaged retirement accounts. Both the Snowball and Avalanche methods are valid means to achieve debt freedom. For the purposes of this post, I am less-concerned with the method you implement to eliminate your debt; just get it done. You may get the push you need if you make the most of your tax refund in this way!

4. Invest in Tax-Advantaged Investments

The real fun begins when you no longer have non-mortgage debt. If you are free from the shackles of debt, the next optimal use for your tax refund is to maximize your retirement contributions. For the purposes of this limited space, ensure you are maximizing employer-offered plans, specifically if they offer a match, and then move onto your Roth IRA.

Want to make the most of your tax refund? Opening an IRA or taxable brokerage account with Betterment is a smart way to maximize the impact of your refund.
Betterment returns vs. US Market and Typical Investor Returns (Credit: Betterment)

If you’re looking for an easy to use platform for investing, Fundrise offers real estate investment options with low financial barriers for entry.. Their Tax-Coordinated Portfolio works to maximize your earnings and minimize tax burdens across all types of accounts, including taxable accounts, Roth IRAs, and traditional IRAs. It is simple to sign-up or rollover an account, select a portfolio of ETFs, and be on your way toward earning better returns right away.

Compared to other platforms, the Betterment portfolio is designed to achieve optimal returns at every level of risk. Through diversification, automated rebalancing, better behavior, and lower fees, the Betterment approach to investing can help you generate 2.9% higher returns than a typical DIY investor.

Make the most of your tax refund and start investing with Betterment by signing up today!

5. Contribute to Your Children’s College Funds

If you do not have children, skip ahead to Step 6. If you have children, you need to learn the nuances of the Coverdell ESA (Education Savings Account, also nicknamed the Education IRA) and 429 plan. The ESA has income and contribution limits (currently $2,000 per year), but I recommend you start with the ESA in most circumstances, if eligible.

The important thing to understand is that minimal contributions to these vehicles will place you in a position to send your children to college without the burden of student loans if you begin early.

Related PostEscape From Student Loans: How Two Educators Paid Off $17,831.65 in 54 Days

6. Destroy Your Mortgage Debt

Pause with me for a moment and imagine a life without a mortgage payment. If you can’t image it, check out the FREE E-book, How to Hack Your Mortgage and Save Thousands, written by my friend Andrew at FamilyMoneyPlan. This is the plan he and his wife used to wipe out their $320,000 mortgage in 6 years.

What could you do with an extra $1,000 per month? $2,500? $5,000? I just felt an overwhelming sense of excitement  and peace typing these words. The next time I visit my doctor and have my blood-pressure checked, I am going to visualize the wonders of a mortgage-free life to improve my numbers.

For the average family, mortgage interest represents the second-largest expense that they will pay in their entire lifetime. In some cases, total mortgage interest paid on a 30 year mortgage can be approximately 75-80% of total principal, even at today’s advantageous interest rates! Make the most of your tax refund to accomplish progress on an annual basis and you could shave several years off your mortgage, especially if you are already paying extra on principal on a monthly basis.

7. Invest in Non-Retirement Funds and/or Real Estate

If you have made it to Step 7, please allow me to offer my congratulations. With no debt whatsoever, healthy savings, and kids’ college covered, you are poised to generate significant wealth. At this stage, you may have achieved Financial Independence, depending upon your lifestyle.

I recommend using tax refund money to invest in simple index funds at this stage. A modest tax refund sum is enough to get you started with many index funds. Adopt a long-term approach, relax, and watch your money grow.

Similarly, this is the time to invest in real estate, if interested. Becoming a landlord isn’t for everyone, and paying a property manager could eat into your net profit from owning a rental property. However, a rental property can yield some of the highest annual investment returns if managed well and purchased at prices below market value.

Want to make the most of your tax refund? Investing in real estate with Fundrise is an exciting option for investors in 2017.Fortunately, today’s investors can invest in real estate without the hassle of becoming a landlord or hiring a property manager. Fundrise offers real estate investment options with low entry costs.. As of February 2017, they offer three eREITs for new investors: the West Cost eREIT, the Heartland eREIT, and the East Cost eREIT. It is amazing that technology has brought common investors like you and me the opportunity to invest in multi-million dollar buildings half way around the country!

Even if you’re on the fence about real estate investing or just not quite ready to dip your toe in the water, I recommend signing-up with Fundrise today – it is 100% FREE, with no obligation, and in doing so, you’ll position yourself to learn more and possibly avoid wait lists.

8. Improve the Value of Your Primary Home

At this stage, true fun begins. When you are financially well-poised for the future, a tax refund represents an opportunity to both invest and add joy to your life simultaneously. This is the time to make improvements around your home which increase your happiness and feature a high return on investment.

Good Investments: new front door, landscaping, deck or patio, kitchen or bath remodel, walkway lighting

Bad Investments: swimming pools, utility sheds

9. Build Sinking Funds for Bucket List Items

Last, but not least, comes additional saving for specific purchases. If you make it down to Step 9 when determining how to implement your tax refund, you are an authentic Superhero. I recommend establishing separate sinking funds for a variety of priorities, such as vacations, new car purchases, secondary homes, or major home additions.

The purpose of a sinking fund is to plan for future purchases which are far off in the future. At this stage, you do not want to be fooled into getting back into debt or be caught off guard by large, necessary expenses. With a sinking fund, you won’t be financially caught off guard when your house needs a new roof, your furnace fails, or your vehicle sputters and dies.

Are You Ready to Make the Most of Your Tax Refund?

A tax refund is a great opportunity to get ahead in your finances. I am confident that you will not fail to cover all of your bases by following these steps. Depending upon where you are in your journey toward Restoring Order to Your World of Finances, you may wish to skip steps or modify the order. For example, renters may wish to place saving for a home down payment in the Steps.

If you haven’t yet filed your 2016 tax returns, be sure to check out E-File.com or LibertyTax today. Either way, careful consideration of your circumstances will put you on the path to make the most of your tax refund this year!


Readers, did you receive a tax refund this year? Are you currently awaiting a refund? How do you plan to make the most of your tax refund?

13 Simple DIY Home Inspection Tips

In today’s internet-driven world, home buyers have become more savvy than previous generations. Zillow, Trulia, Realtor.com, and a dozen or so other websites have made the process of window shopping for homes much easier. Pictures, virtual tours, and a wealth of data are available with the click of a mouse. And the average buyer can net plenty of experience living vicariously through other buyers’ experiences as showcased on the DIY Network and HGTV. Shows like Holmes Inspection have even inspired buyers to conduct their own DIY home inspection.

Yet the average realtor, myself included, can share countless stories of buyers who look at all of the wrong things when touring a home the first (or second . . . or even third!) time. I have had clients tell me that they were not interested in a home due to objections over carpet, basic landscaping, and even paint color. Other clients have happily fallen in love with homes once they mark off the “non-negotiables” on their list: granite counter tops, stainless steel appliances, and an open concept. I understand exactly what it must be like to host House Hunters or Property Virgins.

No home buyer should skip a professional home inspection. But you can save time and money by following these 13 DIY home inspection tips ahead of time.As a realtor, I am bound by a code of ethics which was designed long ago to protect consumers. I do my best to educate them regarding what to look for when touring a home, and I am quick to point out both obvious and subtle defects, as well as signs of possible latent defects. Most realtors who wish to protect their clients will do the same, especially if they want to keep a job long-term. However, not all realtors are so honest, as selling you a home as quickly as possible may determine whether or not they are able to pay their mortgage premium next month.

For the buyer who is represented by this kind of realtor, the process often goes something like this:

-Tour home, fall in love with aesthetic properties, develop emotional attachment to the home.
-Discuss pricing and comparable sales, make an offer, conclude negotiations and sign the contract.
-Schedule a home inspection with a professional home inspector.
-Begin picking out furniture, paint colors, carpet, etc., for the new home.
-Attend (sometimes) the home inspection with inspector, discover a lengthy list of problems which must be addressed.
-Enter state of sadness/depression/panic, question why the realtor did not notice or disclose all of the problems diagnosed by the home inspector.
-Either A) negotiate with the seller regarding necessary repairs or price concessions or B) cancel the transaction.

Sometimes the process goes much more smoothly. Sometimes it goes much, much worse, especially if the home buyers foolishly opt to skip a professional home inspection.

Avoid Home Buying Heartbreak and Hassle: Perform a DIY Home Inspection

In any real estate transaction, the most critical parties are typically the home inspector and the attorneys. As a buyer, they are your last lines of legal defense; they serve to protect you from danger and hours of stress and hassle.

To be clear, I would never, ever recommend that a client skip out on an independent, third-party, professional home inspection, even when buying a brand-new home through a builder. With that said, I believe a prospective buyer can save himself a great deal of time and money by looking out for the following problems and defects in advance of the home inspection by performing a DIY home inspection during a home tour.

The following DIY home inspection tips are not an exhaustive list. They may not apply to every home and location, and should be considered on a case by case basis. Again, do not skip a professional, independent home inspection in an effort to save money!

1. Take in the big picture

When Mrs. Superhero and I were searching for our first home, I was still a real estate amateur. We fell in love with a home which we had toured on a weeknight in February, so it was naturally dark during our tour. When we arrived for the inspection a week later, we met the inspector at the edge of the driveway. After introducing himself, the inspector said, “So, you know you’ll need a brand new roof ASAP, right?” Ouch.

Examining the full exterior of the home during daylight hours is an easy DIY home inspection tip. Look for damage to the roof (missing shingles, bowed eaves, rotting soffits, missing gutters), siding (missing or damaged shingles, encroaching landscaping), and the entire yard. Do not neglect to examine the same components in the garage, whether it is attached or detached. Also, examine the driveway for large cracks, potholes, etc. Note concerns on a checklist and document them with pictures on your phone or camera so you can address them during a possible future home inspection.

2. Test the garage door

It can be a bit uncomfortable to operate a garage door which does not belong to you, but this is an easy check that everyone should perform unless explicitly instructed not to do so by your realtor or the homeowner. Yes, your inspector will check it, too, but it is wise to check for problems yourself.

3. Open and close all interior and exterior doors

During your tour, you are naturally going to enter and exit all rooms in the home. While you’re doing so, opening and closing all doors is a simple step that some home inspectors may overlook from time to time. If you catch a malfunctioning door which requires re-hanging, you may save yourself money at the closing table.

4. Inspect the furnace, air conditioner, and water heater

When examining these items, look for evidence of maintenance dates on the exterior of the appliances. Inspect for any signs of leaking or irregular noises. If the furnace or air conditioner are not running during your tour, it is usually acceptable to temporarily adjust the thermostat to evaluate their level of functioning. Note: Do not attempt to turn on an air conditioner unit during the winter.

5. Examine all ceilings and walls for water damage

Admittedly, looking for water damage may be one of the toughest DIY home inspection tasks on this list. However, savvy homeowners are becoming increasingly skilled at hiding signs of water damage rather than rectifying the underlying problems. Any signs of discoloration, sagging, or unexplained lines near joints where dry wall may have been taped should be noted and addressed with the home inspector.

6. Check out the basement

More and more homeowners are searching for basements, in my experience. Yet many of them don’t check out the basement when touring a home if they learn that it is unfinished. You should examine the foundation for any major structural concerns, such as cracks, as well as examine the basement ceiling for obvious issues. If a basement is finished, you should ask your realtor to inquire as to whether the work was performed with permits. This may seem like no big deal to many people, but depending upon your city or village ordinances, a buyer could be on the hook for any un-permitted mechanical, electrical, structural, or plumbing work completed without a permit.

7. Examine the grade around all exterior walls

In the past five years, flooding has occurred in all 50 states, according to FloodSmart.gov. This cannot always be prevented, yet many home floods are caused by improper grading around a home’s exterior. Examine exterior walls to ensure that the soil is graded in an appropriate manner (slopes downward away from the home). Also ensure that downspouts are adequately extended away from the home’s foundation.

8. Test all light switches

This is an easy DIY home inspection item to cross off your list, and you’ll be glad to know if any light switches are wired improperly.

9. Inspect windows for signs of moisture

If you see fogging or condensation on windows, this is a sign that the windows may require replacement or repair. These items can be very costly, so you will want to be sure that your home inspector addresses them in his report.

10. Test all sinks and toilets

Invariably, home buyers feel uncomfortable evaluating the function of sinks and toilets. When you’re preparing to make arguably the largest purchase of your lifetime, pushing past some discomfort is a must! Begin by running all sinks individually for 3-4 minutes; this will reveal any draining problems. Also, check under vanities to ensure that drains are properly vented. Lastly, flush toilets in all washrooms while the sink is still running and listen for any odd sounds in the plumbing.

11. Evaluate Your Surroundings

I have heard countless horror stories from buyers who fell in love with a home only to face some harsh realities on moving day. One buyer discovered unappealing power lines running through their side yard. Another buyer shared that they hadn’t noticed a large water tower in their backyard because it had been digitally removed from all marketing photos online. And another buyer did not notice that a train ran right behind their backyard and shook the entire house several times a day. Be on the lookout for these unsightly hazards and more!

12. Visit Local Schools

While the value of a professional home inspector cannot be emphasized enough, buyers must inspect local schools themselves. Do not simply rely on reputation, recommendations from well-meaning friends, or scores from third party websites. Review state report cards, attend a school board meeting, and arrange for a brief tour of the school. In most areas, your property taxes largely go toward funding local public schools, so you want to be sure your investment is worthwhile.

13. Talk to Potential Neighbors

During your examination of the home’s exterior and yard, aim to strike up a conversation with your potential neighbors if they are also outdoors. Ask about their impressions of the neighborhood, schools, and neighborhood and community amenities. If you’re feeling brave, ask, “Would you buy your home again today if you were given the chance to do so?” Any major red flags revealed during this conversation may lead you to reconsider the home purchase (or seek a closing credit to build a bigger fence!).

Don’t Take the Home Buying Process Lightly!

For most people, a home is the largest purchase they will ever make. Do not enter into such an important decision without careful consideration of the condition of your potential new home! Review your notes from you DIY home inspection and compare them to the report provided by your professional home inspector. With careful consideration, you will avoid hassle and heartbreak and find the home of your dreams.


What additional home inspection tips do you suggest?