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CNN Live Saturday
Dollard Signs: Home Remodeling Tips
Aired May 22, 2004 - 16:32 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: DOLLAR $IGNS is straight ahead but first the latest developments at this hour.
Iraqi police are investigating this suicide car bombing that happened in Baghdad outside the home of Iraq's deputy interior minister. Investigators say four Iraqi government bodyguards and at least one other person were killed in today's explosion. Ten others including the deputy interior minister and his wife were wounded.
Newly freed Iraqi detainees from Abu Ghraib Prison are speaking out about abuse at the hands of U.S. forces. One says soldiers forced female detainees to serve meals to male prisoners after the men had been stripped naked and beaten.
A top U.S. commander says nearly 400 more detainees will be released next Friday as part of the effort to reduce the prison population.
It's a weekend of cleanup and recovery across tornado-ravaged parts of Iowa. Officials in the small community of Bradgate says just about every building in town was damaged by yesterday's storm. At least 15 people were injured.
One of Europe's most eligible royals is now off the market. Spain's Crown Prince Felipe married former television journalist Letizia Ortiz. Despite rain thousands gathered in central Madrid to watch the ceremony. Some say the wedding hoopla was a welcome distraction from Madrid's deadly train bombings two months ago.
Welcome to DOLLAR $IGNS where we help you make the most of your money. May is National Home Improvement Month. But the money you put into remodeling doesn't automatically equate to added resale value. Do you know which remodeling jobs offer the best return on your investment?
Well, according to "Remodeling Magazine," adding a deck allows to you recoup more than 104 percent of your costs. Replacing the siding allows to you get back 98 percent, and if you add a bathroom, you'll recoup 95 percent of the cost when you sell.
Which remodeling jobs offer the least return? Some real surprises here, refitting your kitchen, transforming the basement and making over the master bedroom. You'll recoup less than 80 percent of the costs on each of those projects when you sell.
Well, joining us with more tips, Jonathan Mangham is a real estate broker and a certified public accountant her in Atlanta. And Sal Alfano used to be a professional remodeler, now he is editor-in- chief of "Remodeling Magazine" in Washington.
Good to see both of you gentlemen.
(CROSSTALK)
WHITFIELD: Well, let me begin with you, John. When should you decide to renovate or perhaps even sell your house all together, that it wouldn't be worth it?
JOHN MANGHAM, CERTIFIED PUBLIC ACCOUNTANT: Well, if you're going to sell, there are a lot of things you can do to get your house ready for the market. Many real estate professionals would tell you get that curb appeal up, do some things to the outside. That will draw buyers to the inside of the house. But there are a lot of projects that don't make sense to be done on the inside, the basement that was just mentioned on your intro segment is a top one.
WHITFIELD: And Sal, so when you finally decide, OK, I'm going to keep my home but I'm going to try and upgrade it, what are some of the things you need to look at? It's not always the most obvious such as remodeling a kitchen or a bathroom, as we know, which is the top of the list for recouping costs, but sometimes it can be small, little details, can't it?
SAL ALFANO, "REMODELING MAGAZINE: Well, I think you're right. I think the first thing people look at are some of the standard systems, roofing, siding, that sort of thing. You want to make sure that the basic systems of the house are in pretty good shape before you start spending discretionary funds on a major project inside the house or even outside the house.
Curb appeal is something that makes a big difference when you're trying to sell a house. And so if selling is your main objective, take care of things on the outside of the house. But most remodeling projects really don't stem from a need to sell, but because of some change is taking place in the family and you need more or you need a different kind of space.
WHITFIELD: OK. Well, we've encouraged people to send e-mails. And they are already coming in. Phil from St. Joseph, Illinois, writes: "I know that I'll be placing my house on the market at the beginning of 2005. What should I do during the summer and fall both inside and out to help maximize the amount of money I receive for the property and minimize the amount of time it spends on the market?" John, you want to take a stab at that?
MANGHAM: Sure. The optimum thing to do on the inside of the house is fairly straightforward and inexpensive, homeowners can do this one by themselves, and that's put fresh paint on the walls. That's the kind of project you can conduct over the winter months, taken at your leisure. Get that place clean, fresh, painted, and then reduce the clutter.
Take things out of the inside of the house even if you have to put them in a storage facility, make it easy for your subsequent buyer or potential buyers to walk through the house and see how they'll enjoy it.
On the outside, of course, landscaping, the best time to sell is in the spring when the flowers can be out and blooming. That will draw people to the inside of your now freshly painted and cleaned house.
WHITFIELD: And so Sal, should you kind of refrain -- if maybe you are getting ready to put your house on market, should you refrain from doing any major work, because a potential buyer may really see other things that they'd rather concentrate work on, how do you make the decision of the little or big things to invest in or some of the big things to invest in in terms of remodeling?
ALFANO: Well, you're exactly right. Remodeling is a very personal experience and any new homeowner is going to have their own idea of what they need to do to the home. So remodeling your kitchen to get it ready to sell doesn't make much sense because the next buyer may not like what you did to it.
I agree that working on the inside -- you know, remodelers -- I work with a lot of professional remodelers, and whenever they're on a remodeling project, the homeowner always has a hundred little things that they never got to over the last five or 10 years, even.
If you're getting ready to sell the house, take care of all that stuff, all the loose hinges, everything that's been -- you've put off for all that time and really get the place shipshape so that all the tiny details are taken care of, the dripping faucets and the squeaky hinges and the cabinet doors that aren't aligned properly. That's the kind of stuff that a homeowner can do or a handy man service at very little cost.
WHITFIELD: OK. We're taking calls and e-mails. We'll take more right after a short break. The toll free number is 1-800-807-2620. And our address is dollarsigns@cnn.com.
(COMMERCIAL BREAK)
WHITFIELD: Welcome back to DOLLAR $IGNS. We're talking about getting the most out of your remodeling of your home. John Mangham is a real estate broker and Sal Alfano is with "Remodeling Magazine."
And of course, we're encouraging people to telephone us as well as e-mail us. I've got our first phone call on the phone now with Phil in New York. And he wants to know how long before there's real payoff on all the work that he's doing. Phil?
CALLER: I can spend about $45,000 on a master bathroom modeling project. I'm just wondering how long it takes to recoup that?
WHITFIELD: John?
MANGHAM: Well, I guess the first thing you're going to recoup is personal pleasure. And don't forget you're working on a personal asset. One of the things that a lot of people do on a remodel is just say, I'm in it for the money because I'm getting ready to sell the house. The reality is, you'll get personal pleasure from the remodel and then when you sell, if you spent 45,000 and did a good, quality job, the payback could be 80 to 90 percent, depending on the numbers in your area.
But if you continue to live in the house, your payback will grow as the house appreciates. So you'll wind up with not only the 45,000 you put in, but 50,000 and 55,000, and the numbers go on.
WHITFIELD: Do you end up having to show receipts for how much you invested in order to know what you get back once you try to sell?
MANGHAM: I think if you want to do the calculation, and I don't find very many homeowners who really want to do the calculation, you'd need to know what you spent. And it's if it's a big contracting job and it was $45,000, it would blur the distinction to go five years in the future and say, I got an extra so many dollars out of my house because how do you allocate the dollars to that bathroom against the dollars to the kitchen, the living room, the den, the new deck that you put on? It's a tough calculation to make.
WHITFIELD: All right. Sal, and Penny in California is on the line with us and has a question about flooring. Penny?
CALLER: Hi. We want to replace our wall-to-wall carpeting for a 2500 square-foot California ranch home in north of San Diego with either ceramic pavers or light oak engineered planked wood. Which do you suggest for the dollar?
WHITFIELD: Sal?
ALFANO: Well, that's -- of course, it depends. Probably not exactly what you want to hear. But they can be comparable in cost. Really, I guess, depends mostly on what the existing structure of the house is like. If it's a slab on grade, and a lot of houses in California, particularly Southern California and San Diego area are concrete, they have concrete slab, then tile will work very nicely.
The problem with tile, of course, on a wood structure is that if it flexes, then the tile will crack and the grout will crack. So if you're on a concrete slab, tile will be fairly comparable to hardwood. If, however, you've got wood joists and they need to be beefed up, you're getting into a little more structural repair before you can even put the flooring down.
WHITFIELD: For replacing flooring to now replacing windows, Sherri (ph) in Nevada has a question. Sherri?
CALLER: Hi. I've been in my house for about 17 years, I've got wood frame, double hung dual pane windows, and I want to get something that's more energy efficient. And there's so many different kinds. What would you recommend?
WHITFIELD: Sal?
ALFANO: Well, double hung is a good window. It's a type of window that can be sealed fairly tightly. I imagine you want to keep the style. So what you want to look for is a glazing, a type of glazing, the glass in the window, that's insulated preferably with a kind of argon gas or krypton gas between the panes and maybe even a low-e (ph) coating which will reflect heat back into the house in the heating season and sun light back out of the house in the cooling season.
So pay attention to the insulating rating of the glass and then look at a window that has a frame on the sash that is going to seal tightly and keep air from getting in and out. That's where the big energy loss is in most windows.
WHITFIELD: A lot of times people want to not only replace things but add all together, like add an entire room. I notice in your "Remodeling Magazine," Sal, that adding an attic bedroom, you could reap about 92 percent in recouping your costs. Dean in Florida has a question about adding an office to his home. Dean?
CALLER: Yes, good afternoon, folks. I just recently completed the Zig Zigler-Peter Lowe program, and what I've got is the tools and the dreams to make my multi-recording studio possible. But what suggestions would you have in actually making the most out of putting a business at home, and actually does it have any effect in your equity in your house?
WHITFIELD: John?
MANGHAM: Well, let's talk about an office in your home and a business in your home. Certainly, the commute is terrific. It's a 30-second commute from your kitchen to your office. But seriously, the IRS takes a look at the home in your office in a couple different ways. If you use it exclusively for business or for meeting clients, you'll wind up with some good tax deductions. The personal benefits are reduced travel or stress and a tax break.
It changes the use of your home, however, because you now have maybe 80 percent of your home as a residence and 20 percent of your home as an office. And so you wind up having to treat the two components separately in your tax return. We could go deeper, but I'll suggest that you chat with your CPA. You're in-line for some deductions, you're in-line for some and tax breaks. And it's always nice to have Uncle Sam pay for some of those things that are in your home.
WHITFIELD: And James from Stone Mountain has a question in this e-mail: "Which of the following home improvements tends to increase a home's value the most, installing hardwood flooring, kitchen remodeling or master bath improvements?" Sal, I know you all broke it down in your magazine.
ALFANO: Well, kitchens are difficult because everybody has their own idea of what their dream kitchen is. And so there's no guarantee that you'll get the money out that you put into a kitchen remodel.
Bathroom -- master bathrooms are a very hot commodity at the moment in certain parts of the country. And you can hardly go wrong in improving that space. Again, taste matters. And so you don't want to go too far out in terms of design. You want something that's going to appeal to the general population.
But you really can't go wrong in upgrading a master bath. Most of the resale questions are local questions. It's a question of what's happening in your neighborhood, what's happening a couple of blocks down to home values. That's where the value of a remodeling project is determined on resale.
WHITFIELD: So John, I've got a question. Are you guys both in concert kind of saying too that it's a waste of money to remodel or invest in remodeling in your home if you're planning on selling it as opposed to staying there to enjoy the benefits of your remodeling projects?
MANGHAM: I think if you spend money to remodel something and immediately put your house on market, when all the percentages are running from 65 to 90 percent of the cost recaptured, that says you've put money in a kitchen for somebody else. Hopefully they'll like it and you're going to get paid back 90 cents on the dollar. Financially that's...
WHITFIELD: Maybe.
MANGHAM: Maybe. And that's a losing proposition. I would rather see, if you're thinking about selling your home within the next six to 12 months, do the basic inexpensive things, paint, clean, clean the windows, clean up the lawn, get it trimmed up and looking crisp. And then instead of spending money in the home, maybe offer a buyer incentive to let them start thinking about the next kitchen remodel that the new homeowner could do on their own.
WHITFIELD: All right. John and Sal, hold on a minute, we're going to take a short break. More of your calls and e-mails coming up on home remodeling.
(COMMERCIAL BREAK)
WHITFIELD: Welcome back to DOLLAR $IGNS. Have you got a home improvement project in mind but can't decide if now is the right time to do it? Well, you can ask our guests, real estate broker John Mangum and remodeling expert Sal Alfano.
All right, gentlemen, we're talking about upgrading our homes, improving it or at least just trying to create some conditions that you as a homeowner can enjoy, not just for reselling. So what about swimming pools, is that always considered an investment?
MANGHAM: I think swimming pools are never considered an investment.
WHITFIELD: Really?
MANGHAM: I have heard more stories of people trying to sell a property with a pool in the backyard, and the solutions completely go to, let's fill in the pool. In today's litigious society, the liability that comes with a pool, most people only want a pool for their personal pleasure. You would never want to make that as an investment. Don't make that decision as an add-on to the property unless you intend to use it and enjoy it yourself.
WHITFIELD: All right. Jeff from Michigan is on the phone and he has got a question about upgrading his patio. Jeff?
CALLER: Yes, hi, good afternoon. I have an old brick patio which is allowing water to build up in the basement, and I need to have it replaced. And the question I have is whether or not it would make sense to replace it with a brick patio or replace it with a concrete patio? Also the caveat that we'll be moving within the next six to 12 months.
WHITFIELD: Sal?
ALFANO: Well, if you're moving that quickly I would forget about the concrete solution. It's a lot of additional work. You really want to find out what the cause is. A brick patio by itself really shouldn't create the problem that you're describing. It's probably that the grade of the soil around the foundation has settled. And so you have water draining instead of away from the house, it's draining down into the house. Now a slab would take care of that. But you're talking about getting a concrete crew out there. It's a lot of work.
WHITFIELD: That sounds like a lot of money too.
ALFANO: It's a lot more expensive. I think if the brick are in decent shape, then really what you have is a landscaper needs to come out, remove the brick is, tamp the grade to where it needs to be and put the brick back. And I think you get out of it pretty cheaply.
WHITFIELD: All right. And Audrey in D.C. is on the line with us and she wants to add on to her home, particularly to get ready for her elderly parents. Audrey?
CALLER: Hi. Good evening. I have a 77-year-old colonial with a 1 1/2 bath and a 10-inch porch on the first and second levels. Can I enclose these porches, remodel or remove radiators and try to install a bathroom for an elderly parent?
WHITFIELD: Sal?
ALFANO: Sure. Well, yes, very common remodeling project to close in a porch. You might -- the cost is going to depend on the -- the cost of the plumbing is going to depend on how far you are away from the waistlines and the water lines in the house. It can be expensive to run those lines if the porch is outside the foundation of the house and most of the time they are.
So somehow you're going to have to get water lines out there, you're going to have to protect against frost. You're going to somehow have to insulate that space underneath. So it can get a little bit involved, but it's a very common way to add space and particularly to add a bathroom to a first floor or to a floor or to a floor of the house where you don't currently have one.
WHITFIELD: And John, this last call is for you. This is from Penny in Michigan who has a question about replacing carpeting. Penny?
CALLER: Good afternoon. Could you tell me if you should replace worn carpet before selling or should it just be cleaned?
MANGHAM: Well, I would probably take a look at the condition of the carpet. If it's worn and thread bare and it gives the house a rundown appearance, I might use an inexpensive carpet. It won't last very long but it will give it that fresh crisp look that I've repeated a couple of times today. You can replace the carpet with an inexpensive grade that will help it sell more quickly. You may not get more money for the property when you sell, but it will sell more quickly because it's got that clean, fresh look.
WHITFIELD: All right. Real estate broker John Mangum and remodeling expert Sal Alfano of "Remodeling Magazine," thanks, gentlemen, for helping us save a little money and assess whether we need to remodel at all.
MANGHAM: Thank you for having us.
ALFANO: Thank you.
WHITFIELD: That's all we have time for right now. But stay with CNN. Up next on "PEOPLE IN THE NEWS," "American Idol"'s Ruben Studdard and Clay Aiken along with "Shrek 2" star Mike Myers.
Then at 6:00 p.m. Eastern on "CNN LIVE SATURDAY," a look at what's next for the Bush daughters now that they're graduating.
And at 7 Eastern, "CAPITAL GANG" with Tad Devine, a top adviser to the Kerry campaign.
I'll be back after a break with a look at the top stories.
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Aired May 22, 2004 - 16:32 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: DOLLAR $IGNS is straight ahead but first the latest developments at this hour.
Iraqi police are investigating this suicide car bombing that happened in Baghdad outside the home of Iraq's deputy interior minister. Investigators say four Iraqi government bodyguards and at least one other person were killed in today's explosion. Ten others including the deputy interior minister and his wife were wounded.
Newly freed Iraqi detainees from Abu Ghraib Prison are speaking out about abuse at the hands of U.S. forces. One says soldiers forced female detainees to serve meals to male prisoners after the men had been stripped naked and beaten.
A top U.S. commander says nearly 400 more detainees will be released next Friday as part of the effort to reduce the prison population.
It's a weekend of cleanup and recovery across tornado-ravaged parts of Iowa. Officials in the small community of Bradgate says just about every building in town was damaged by yesterday's storm. At least 15 people were injured.
One of Europe's most eligible royals is now off the market. Spain's Crown Prince Felipe married former television journalist Letizia Ortiz. Despite rain thousands gathered in central Madrid to watch the ceremony. Some say the wedding hoopla was a welcome distraction from Madrid's deadly train bombings two months ago.
Welcome to DOLLAR $IGNS where we help you make the most of your money. May is National Home Improvement Month. But the money you put into remodeling doesn't automatically equate to added resale value. Do you know which remodeling jobs offer the best return on your investment?
Well, according to "Remodeling Magazine," adding a deck allows to you recoup more than 104 percent of your costs. Replacing the siding allows to you get back 98 percent, and if you add a bathroom, you'll recoup 95 percent of the cost when you sell.
Which remodeling jobs offer the least return? Some real surprises here, refitting your kitchen, transforming the basement and making over the master bedroom. You'll recoup less than 80 percent of the costs on each of those projects when you sell.
Well, joining us with more tips, Jonathan Mangham is a real estate broker and a certified public accountant her in Atlanta. And Sal Alfano used to be a professional remodeler, now he is editor-in- chief of "Remodeling Magazine" in Washington.
Good to see both of you gentlemen.
(CROSSTALK)
WHITFIELD: Well, let me begin with you, John. When should you decide to renovate or perhaps even sell your house all together, that it wouldn't be worth it?
JOHN MANGHAM, CERTIFIED PUBLIC ACCOUNTANT: Well, if you're going to sell, there are a lot of things you can do to get your house ready for the market. Many real estate professionals would tell you get that curb appeal up, do some things to the outside. That will draw buyers to the inside of the house. But there are a lot of projects that don't make sense to be done on the inside, the basement that was just mentioned on your intro segment is a top one.
WHITFIELD: And Sal, so when you finally decide, OK, I'm going to keep my home but I'm going to try and upgrade it, what are some of the things you need to look at? It's not always the most obvious such as remodeling a kitchen or a bathroom, as we know, which is the top of the list for recouping costs, but sometimes it can be small, little details, can't it?
SAL ALFANO, "REMODELING MAGAZINE: Well, I think you're right. I think the first thing people look at are some of the standard systems, roofing, siding, that sort of thing. You want to make sure that the basic systems of the house are in pretty good shape before you start spending discretionary funds on a major project inside the house or even outside the house.
Curb appeal is something that makes a big difference when you're trying to sell a house. And so if selling is your main objective, take care of things on the outside of the house. But most remodeling projects really don't stem from a need to sell, but because of some change is taking place in the family and you need more or you need a different kind of space.
WHITFIELD: OK. Well, we've encouraged people to send e-mails. And they are already coming in. Phil from St. Joseph, Illinois, writes: "I know that I'll be placing my house on the market at the beginning of 2005. What should I do during the summer and fall both inside and out to help maximize the amount of money I receive for the property and minimize the amount of time it spends on the market?" John, you want to take a stab at that?
MANGHAM: Sure. The optimum thing to do on the inside of the house is fairly straightforward and inexpensive, homeowners can do this one by themselves, and that's put fresh paint on the walls. That's the kind of project you can conduct over the winter months, taken at your leisure. Get that place clean, fresh, painted, and then reduce the clutter.
Take things out of the inside of the house even if you have to put them in a storage facility, make it easy for your subsequent buyer or potential buyers to walk through the house and see how they'll enjoy it.
On the outside, of course, landscaping, the best time to sell is in the spring when the flowers can be out and blooming. That will draw people to the inside of your now freshly painted and cleaned house.
WHITFIELD: And so Sal, should you kind of refrain -- if maybe you are getting ready to put your house on market, should you refrain from doing any major work, because a potential buyer may really see other things that they'd rather concentrate work on, how do you make the decision of the little or big things to invest in or some of the big things to invest in in terms of remodeling?
ALFANO: Well, you're exactly right. Remodeling is a very personal experience and any new homeowner is going to have their own idea of what they need to do to the home. So remodeling your kitchen to get it ready to sell doesn't make much sense because the next buyer may not like what you did to it.
I agree that working on the inside -- you know, remodelers -- I work with a lot of professional remodelers, and whenever they're on a remodeling project, the homeowner always has a hundred little things that they never got to over the last five or 10 years, even.
If you're getting ready to sell the house, take care of all that stuff, all the loose hinges, everything that's been -- you've put off for all that time and really get the place shipshape so that all the tiny details are taken care of, the dripping faucets and the squeaky hinges and the cabinet doors that aren't aligned properly. That's the kind of stuff that a homeowner can do or a handy man service at very little cost.
WHITFIELD: OK. We're taking calls and e-mails. We'll take more right after a short break. The toll free number is 1-800-807-2620. And our address is dollarsigns@cnn.com.
(COMMERCIAL BREAK)
WHITFIELD: Welcome back to DOLLAR $IGNS. We're talking about getting the most out of your remodeling of your home. John Mangham is a real estate broker and Sal Alfano is with "Remodeling Magazine."
And of course, we're encouraging people to telephone us as well as e-mail us. I've got our first phone call on the phone now with Phil in New York. And he wants to know how long before there's real payoff on all the work that he's doing. Phil?
CALLER: I can spend about $45,000 on a master bathroom modeling project. I'm just wondering how long it takes to recoup that?
WHITFIELD: John?
MANGHAM: Well, I guess the first thing you're going to recoup is personal pleasure. And don't forget you're working on a personal asset. One of the things that a lot of people do on a remodel is just say, I'm in it for the money because I'm getting ready to sell the house. The reality is, you'll get personal pleasure from the remodel and then when you sell, if you spent 45,000 and did a good, quality job, the payback could be 80 to 90 percent, depending on the numbers in your area.
But if you continue to live in the house, your payback will grow as the house appreciates. So you'll wind up with not only the 45,000 you put in, but 50,000 and 55,000, and the numbers go on.
WHITFIELD: Do you end up having to show receipts for how much you invested in order to know what you get back once you try to sell?
MANGHAM: I think if you want to do the calculation, and I don't find very many homeowners who really want to do the calculation, you'd need to know what you spent. And it's if it's a big contracting job and it was $45,000, it would blur the distinction to go five years in the future and say, I got an extra so many dollars out of my house because how do you allocate the dollars to that bathroom against the dollars to the kitchen, the living room, the den, the new deck that you put on? It's a tough calculation to make.
WHITFIELD: All right. Sal, and Penny in California is on the line with us and has a question about flooring. Penny?
CALLER: Hi. We want to replace our wall-to-wall carpeting for a 2500 square-foot California ranch home in north of San Diego with either ceramic pavers or light oak engineered planked wood. Which do you suggest for the dollar?
WHITFIELD: Sal?
ALFANO: Well, that's -- of course, it depends. Probably not exactly what you want to hear. But they can be comparable in cost. Really, I guess, depends mostly on what the existing structure of the house is like. If it's a slab on grade, and a lot of houses in California, particularly Southern California and San Diego area are concrete, they have concrete slab, then tile will work very nicely.
The problem with tile, of course, on a wood structure is that if it flexes, then the tile will crack and the grout will crack. So if you're on a concrete slab, tile will be fairly comparable to hardwood. If, however, you've got wood joists and they need to be beefed up, you're getting into a little more structural repair before you can even put the flooring down.
WHITFIELD: For replacing flooring to now replacing windows, Sherri (ph) in Nevada has a question. Sherri?
CALLER: Hi. I've been in my house for about 17 years, I've got wood frame, double hung dual pane windows, and I want to get something that's more energy efficient. And there's so many different kinds. What would you recommend?
WHITFIELD: Sal?
ALFANO: Well, double hung is a good window. It's a type of window that can be sealed fairly tightly. I imagine you want to keep the style. So what you want to look for is a glazing, a type of glazing, the glass in the window, that's insulated preferably with a kind of argon gas or krypton gas between the panes and maybe even a low-e (ph) coating which will reflect heat back into the house in the heating season and sun light back out of the house in the cooling season.
So pay attention to the insulating rating of the glass and then look at a window that has a frame on the sash that is going to seal tightly and keep air from getting in and out. That's where the big energy loss is in most windows.
WHITFIELD: A lot of times people want to not only replace things but add all together, like add an entire room. I notice in your "Remodeling Magazine," Sal, that adding an attic bedroom, you could reap about 92 percent in recouping your costs. Dean in Florida has a question about adding an office to his home. Dean?
CALLER: Yes, good afternoon, folks. I just recently completed the Zig Zigler-Peter Lowe program, and what I've got is the tools and the dreams to make my multi-recording studio possible. But what suggestions would you have in actually making the most out of putting a business at home, and actually does it have any effect in your equity in your house?
WHITFIELD: John?
MANGHAM: Well, let's talk about an office in your home and a business in your home. Certainly, the commute is terrific. It's a 30-second commute from your kitchen to your office. But seriously, the IRS takes a look at the home in your office in a couple different ways. If you use it exclusively for business or for meeting clients, you'll wind up with some good tax deductions. The personal benefits are reduced travel or stress and a tax break.
It changes the use of your home, however, because you now have maybe 80 percent of your home as a residence and 20 percent of your home as an office. And so you wind up having to treat the two components separately in your tax return. We could go deeper, but I'll suggest that you chat with your CPA. You're in-line for some deductions, you're in-line for some and tax breaks. And it's always nice to have Uncle Sam pay for some of those things that are in your home.
WHITFIELD: And James from Stone Mountain has a question in this e-mail: "Which of the following home improvements tends to increase a home's value the most, installing hardwood flooring, kitchen remodeling or master bath improvements?" Sal, I know you all broke it down in your magazine.
ALFANO: Well, kitchens are difficult because everybody has their own idea of what their dream kitchen is. And so there's no guarantee that you'll get the money out that you put into a kitchen remodel.
Bathroom -- master bathrooms are a very hot commodity at the moment in certain parts of the country. And you can hardly go wrong in improving that space. Again, taste matters. And so you don't want to go too far out in terms of design. You want something that's going to appeal to the general population.
But you really can't go wrong in upgrading a master bath. Most of the resale questions are local questions. It's a question of what's happening in your neighborhood, what's happening a couple of blocks down to home values. That's where the value of a remodeling project is determined on resale.
WHITFIELD: So John, I've got a question. Are you guys both in concert kind of saying too that it's a waste of money to remodel or invest in remodeling in your home if you're planning on selling it as opposed to staying there to enjoy the benefits of your remodeling projects?
MANGHAM: I think if you spend money to remodel something and immediately put your house on market, when all the percentages are running from 65 to 90 percent of the cost recaptured, that says you've put money in a kitchen for somebody else. Hopefully they'll like it and you're going to get paid back 90 cents on the dollar. Financially that's...
WHITFIELD: Maybe.
MANGHAM: Maybe. And that's a losing proposition. I would rather see, if you're thinking about selling your home within the next six to 12 months, do the basic inexpensive things, paint, clean, clean the windows, clean up the lawn, get it trimmed up and looking crisp. And then instead of spending money in the home, maybe offer a buyer incentive to let them start thinking about the next kitchen remodel that the new homeowner could do on their own.
WHITFIELD: All right. John and Sal, hold on a minute, we're going to take a short break. More of your calls and e-mails coming up on home remodeling.
(COMMERCIAL BREAK)
WHITFIELD: Welcome back to DOLLAR $IGNS. Have you got a home improvement project in mind but can't decide if now is the right time to do it? Well, you can ask our guests, real estate broker John Mangum and remodeling expert Sal Alfano.
All right, gentlemen, we're talking about upgrading our homes, improving it or at least just trying to create some conditions that you as a homeowner can enjoy, not just for reselling. So what about swimming pools, is that always considered an investment?
MANGHAM: I think swimming pools are never considered an investment.
WHITFIELD: Really?
MANGHAM: I have heard more stories of people trying to sell a property with a pool in the backyard, and the solutions completely go to, let's fill in the pool. In today's litigious society, the liability that comes with a pool, most people only want a pool for their personal pleasure. You would never want to make that as an investment. Don't make that decision as an add-on to the property unless you intend to use it and enjoy it yourself.
WHITFIELD: All right. Jeff from Michigan is on the phone and he has got a question about upgrading his patio. Jeff?
CALLER: Yes, hi, good afternoon. I have an old brick patio which is allowing water to build up in the basement, and I need to have it replaced. And the question I have is whether or not it would make sense to replace it with a brick patio or replace it with a concrete patio? Also the caveat that we'll be moving within the next six to 12 months.
WHITFIELD: Sal?
ALFANO: Well, if you're moving that quickly I would forget about the concrete solution. It's a lot of additional work. You really want to find out what the cause is. A brick patio by itself really shouldn't create the problem that you're describing. It's probably that the grade of the soil around the foundation has settled. And so you have water draining instead of away from the house, it's draining down into the house. Now a slab would take care of that. But you're talking about getting a concrete crew out there. It's a lot of work.
WHITFIELD: That sounds like a lot of money too.
ALFANO: It's a lot more expensive. I think if the brick are in decent shape, then really what you have is a landscaper needs to come out, remove the brick is, tamp the grade to where it needs to be and put the brick back. And I think you get out of it pretty cheaply.
WHITFIELD: All right. And Audrey in D.C. is on the line with us and she wants to add on to her home, particularly to get ready for her elderly parents. Audrey?
CALLER: Hi. Good evening. I have a 77-year-old colonial with a 1 1/2 bath and a 10-inch porch on the first and second levels. Can I enclose these porches, remodel or remove radiators and try to install a bathroom for an elderly parent?
WHITFIELD: Sal?
ALFANO: Sure. Well, yes, very common remodeling project to close in a porch. You might -- the cost is going to depend on the -- the cost of the plumbing is going to depend on how far you are away from the waistlines and the water lines in the house. It can be expensive to run those lines if the porch is outside the foundation of the house and most of the time they are.
So somehow you're going to have to get water lines out there, you're going to have to protect against frost. You're going to somehow have to insulate that space underneath. So it can get a little bit involved, but it's a very common way to add space and particularly to add a bathroom to a first floor or to a floor or to a floor of the house where you don't currently have one.
WHITFIELD: And John, this last call is for you. This is from Penny in Michigan who has a question about replacing carpeting. Penny?
CALLER: Good afternoon. Could you tell me if you should replace worn carpet before selling or should it just be cleaned?
MANGHAM: Well, I would probably take a look at the condition of the carpet. If it's worn and thread bare and it gives the house a rundown appearance, I might use an inexpensive carpet. It won't last very long but it will give it that fresh crisp look that I've repeated a couple of times today. You can replace the carpet with an inexpensive grade that will help it sell more quickly. You may not get more money for the property when you sell, but it will sell more quickly because it's got that clean, fresh look.
WHITFIELD: All right. Real estate broker John Mangum and remodeling expert Sal Alfano of "Remodeling Magazine," thanks, gentlemen, for helping us save a little money and assess whether we need to remodel at all.
MANGHAM: Thank you for having us.
ALFANO: Thank you.
WHITFIELD: That's all we have time for right now. But stay with CNN. Up next on "PEOPLE IN THE NEWS," "American Idol"'s Ruben Studdard and Clay Aiken along with "Shrek 2" star Mike Myers.
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