If you are an investor in Chicago an excellent way to use your tax return is to add value to the properties you already own. In our latest post, you’ll learn about improvements you can make to add value to your Chicago investment properties.
Many people will use their tax return on something material or frivolous that only provides a one time reward. But what if instead of using your tax return on a new tablet or tv, you used the money to build equity in your home? Adding value to your property will only benefit you over time. Keep reading to learn about some of the best ways to use your tax return to add value to your Chicago investment property.
Replace old, worn out appliances with their more efficient counterparts. Your new appliances will ultimately pay for themselves over time by providing lower electric bills and maintenance costs. Newer and efficient appliances will be a huge draw if you are attempting to rent the property out. Prospective tenants will likely be paying their own utility bills and will jump at the opportunity to save some money. Increasing the efficiency of your appliances will offer benefits for years to come.
A few small changes to your front yard can make a huge difference in the way your property is seen by prospective buyers or renters. A few easy things you can replace include the front door, mailbox, porch light, and house numbers. Updating your landscaping with new flower beds or trees isn’t a bad idea either and can be done for a relatively low cost.
Painting a room can completely transform it and give it new life. Plus it is a project that can be done pretty inexpensively in comparison to other renovations within your home. You’ll likely be able to do most of the work yourself, paying only for the materials and the cost of your time.
A new floor will completely change the look of a room. Even if you don’t do the whole house, upgrading the floors in a room or two will definitely add appeal to your property. Whether you choose to go with tile, laminate, carpet, or wood, adding new floors to a portion of your home can dramatically change the way it is seen by potential buyers and renters.
Adding a backsplash or new hardware can dramatically change your kitchen without having to do a major renovation. You could even repaint old dreary cabinets giving them a whole new look and feel. If you have an appliance that is on its last leg, now is the time to begin shopping for something new, not when it breaks down at the most inconvenient moment possible.
Home Improvement Deductions
While making improvements to your Chicago investment property won’t likely be deductible, you’ll still want to keep track of how much you spend. When you make improvements to the home, the amounts can be subtracted from your overall tax basis when it’s time to sell the property. Under current tax laws, the first $250,000 of profit is already tax-free, so tracking every single dollar may not be as imperative. But by using your tax return for renovations, you’ll not only be improving the property to attract more tenants, but you will possibly be able to save yourself some money over the long-term. Keep in mind, this applies to things that increase the value of the home, not your ordinary, everyday repairs.