Solar Energy: Just a Fad or Worth the Investment?

Solar panels and other renewable energy sources are a big investment. It’s easy to wonder…is this a worthwhile investment for my home or just something popular that will be irrelevant a few years from now? Solar power is a growing industry that’s here to stay. The positive impact it will have on your home and the environment as a whole is well worth the investment and can save you money on electric and energy bills in the long run.

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A renewable energy source, solar power is unique because it does not emit harmful greenhouse gases in the energy generation process. The most abundant source of renewable energy, this powerful energy source is already used by many homes and businesses. There are a few types of solar energy systems. Solar power simply refers to any system that converts the sun’s light or heat into usable energy.

There are two primary systems for harnessing solar energy – active and passive. Active solar systems convert the sun’s heat or light into usable energy using mechanical or electrical devices. Passive solar systems don’t require mechanics or moving parts. They are specifically designed to collect and store heat energy from sunlight for heating or electric.

In the last ten years residential solar has skyrocketed, more than tripling the number of homes with solar. Over 1 million homes in the United States alone have rooftop solar in their homes. It is projected that by 2020 nearly 4 million homes will have rooftop solar.

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(Graphic from Namasté Solar)

 

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In addition to the obvious benefit of taking good care of the earth and making sustainable, environmentally friendly choices…solar energy also has more personal benefits for your home, family, and budget.

  • Save money on electric and heating bills. While you will have to spend some money upfront for solar panels, the money you will save using renewable energy will cover the costs and decrease your bills.
  • There are solar energy tax credits, incentives, and rebatesThe federal government offers a tax credit and many states, local governments, and municipalities offer additional credits. Depending on location, other solar energy incentives and rebates exist, adding another layer of financial benefit.
  • Solar power isn’t limited to sunny places. Sunlight still gets through clouds, and while diffused sunlight is not as ideal as direct, it can still be converted into energy.
  • Creates more jobs. Employment in the United States solar industry has skyrocketed and will continue to grow with the projected growth of home solar energy use. According to SolarCity, “employment in the U.S. solar industry recently surpassed 200,000 people – that’s more than the oil and gas extraction industry, and three times more than the coal-mining industry.”

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The first step to introducing solar energy to your home is to get a quote. Companies like SolarCity, Namaste Solar (a local Colorado company) EnergySage, SunRun, NRG Home Solar, SunPower, and more will often offer free quotes and estimates to help you find the right solar panel option for you.

If you aren’t ready to jump fully in with solar panels, there are lots of smaller ways to get your feet wet in the sustainability and renewable energy game.

  • Unplug electronics when not in use. Even when devices are turned off, if they remain plugged in they can still use electricity. Get a power strip that turns off, unplug your microwave and toaster when not in use, don’t leave your phone charger plugged in when your phone isn’t charging, and always remember to turn lights off when not in use! You’ll save energy and reduce your electric bill.
  • Power devices with rechargeable batteries. Amazon has a wide selection of rechargeable batteries and chargers, and this easy way to use less energy is quite convenient. Once you start using solar panels, you won’t even have to use electricity to charge the batteries!
  • Get a solar oven and/or solar water heater. Solar water heaters use the sun to heat a reserve water connected to the plumbing. Solar ovens can be purchased or built. Cook your food with the power and heat of the sun, saving tons of electricity and starting small on the road to solar energy.
  • Use daylight whenever possible. Especially in sunny Colorado, the power of our natural light is incredible! Practice not turning the lights on if a room is already well lit by the sun.

All in all, solar energy can decrease your carbon footprint, help the environment, save you money, and contribute to the growing industry of renewable energy. A win all around!

The Pros and Cons of Paying Off Your Mortgage Early

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HOW TO PAY OFF YOUR MORTGAGE EARLY

Pay a little extra each month. Any payments made over the minimum payment go to your principal on the loan, instead of towards the interest. Over time you can significantly reduce the amount owed and cut down the time of loan repayment, even by years (see graph).

Refinance to lower interest rate or shorter-term loan.
Both options lower the total interest you are paying, either due to the lower rate (if you don’t already have a low-interest rate) or the shorter amount of time for the interest to build. This allows you to save money long-term, either through reduced monthly payments because of the lower interest rate or by paying the loan off faster.

Downsizing.
If getting rid of your mortgage faster, or altogether, is important, downsizing can be a great way to get there. Selling your house and using the profits to purchase a smaller home could mean having no mortgage at all, or at least a smaller one. Using the same monthly payment as before you could be debt-free faster.

THE PROS

Save money! Interest builds up, especially over the course of a 30-year loan. Paying off your mortgage early can save tens of thousands of dollars on built-up interest.

Return on investment (ROI).
When you put your dollars towards your home, you know exactly what your return on investment will be. Real estate, the stock market, and the economy are ever-changing and investing in your home is a comforting way to be sure that your money is going to the right place.

Reduced cost of living.
Mortgage payments take up a big part of one’s take-home paycheck. Getting your mortgage paid off faster allows for a lower cost of living. This can create more financial freedom, allowing you to save money, which can then be put into retirement, kids’ college funds, travel, and more. It could also give you the chance to work fewer hours, or even work a job you always wanted but previously couldn’t afford the pay cut.

THE CONS

Lose the tax break. Mortgage interest paid throughout a year can be listed as a deduction on your taxes if you itemize. Taxes are complicated, so it’s important to talk to an accountant or tax specialist while figuring out if the tax deduction is worth keeping the longer loan.

Lost diversification.
From Todd Tresidder, a financial mentor, “this one is ‘the biggie’ so pay close attention… Most investor portfolios are denominated in their domestic currency and thus carry the risk that inflationary government policies will depreciate their investment purchasing power over time. A residential real estate mortgage is the only practical way for most people to short their domestic currency and hedge against inflationary economic policy.”

Life happens.
There are times when extra income could be better spent on investments, retirement, a more comprehensive healthcare plan, college funds, and more. For many Americans, medical bills are the primary cause of bankruptcy and investing in a better healthcare plan could be a wiser financial decision over paying off a mortgage faster. In some cases, insurance could be a more financially secure option than a paid-off mortgage.

Investments. Many hold the opinion that it is better, from a long-term perspective, to put extra income into investments rather than higher mortgage payments. Saving for retirement, investing in stocks, and having a diverse investment portfolio are things that can, over time, bring you even greater financial freedom and stability.

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Construction-Defects Reform Bill Passes Unanimously

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Condo construction is expected to increase, thanks to the new construction-defects reform bill. The bill changes laws and restrictions placed on builders, the repercussions of which have discouraged condo builders from developing for-sale condos in the past.

Designed to keep homeowners safe, construction-defect laws have historically placed full financial responsibility on condo builders, meaning a defect as small as a toilet being a few inches out of place could result in the entire complex suing the builders for defects. With such a high financial risk, most builders have opted for constructing rental properties and apartments instead of for-sale condos.

The result is a city that’s hurting for lower-cost housing. The lack of new builds is definitely felt, especially for those looking for affordability. The new bill seeks to incentivize new builds while continuing to protect homeowner rights. The compromise bill will, in fact, offer even higher protection to owners. It will require the majority of unit owners to vote before any construction-defects lawsuits are filed, instead of the HOA making the decision. Previous law only necessitated a majority of HOA board members to vote. Condo owners will now be required to be alerted to the potential impacts of a lawsuit on their selling or refinancing options. The bill does not stand in the way of individual owners with legitimate construction issues from pursing legal remedy, rather it protects condo builders from being sued by the HOA for illegitimate construction-defect issues.

HB 1279 was passed unanimously at the beginning of April by the Colorado House of Representatives. Sponsored by Democratic Rep. Alec Garnett of Denver and Republican Rep. Lori Saine of Dacono, the bill received no disagreement from House members.

Those backing the bill believe it to be crucial to encouraging new condo builds and a vital step for this booming city. The HOA coalition is in agreement, finding the bill to be a positive step towards creating more attainable housing options for Colorado residents while continuing to pursue its primary function of protecting homeowners and their right to pursue or not pursue litigation for legitimate construction-defect issues.

Those backing HB 1279 are encouraged by the positive and accepting response to the compromise bill-reform and hopeful for the opportunities it could create for more accessible housing opportunities for Colorado residents and newcomers.

Finding a Home You Love in a Crazy Market

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Denver’s housing market is booming. It’s hot, it’s popular, and it seems that everyone learned Denver’s once well-kept secret…that it’s the best. With so many people moving to this great city, inventory has been low and demand has been high. Looking at the housing market, one might feel discouraged and wonder if it is even worth it to buy right now. We’re here to assure you – it is! Despite the high demand and low inventory of the Denver housing market, it is possible to find a home you love as you make this wonderful city your permanent home (until the next adventure, that is)!

FIND AN AGENT

It is vital to find a great real estate agent who is knowledgable about the market, a real estate expert, and someone dedicated to their clients. The right real estate agent will fight tirelessly for their clients, finding you the right home. Madison & Company Properties has over 140 truly incredible, highly recommended, and vetted Realtors® who can help you find your new home. Check out our website to find a Madison Realtor® who is right for you!

PATIENCE IS A VIRTUE

Finding the right home probably won’t happen overnight. It’s important to take time to learn about different neighborhoods, and know what you want going into it. Have a list of must-haves, really-wants, and can-live-withouts. Be flexible, you might get the giant backyard but no wrap-around patio, or there are the perfect number of rooms, but you wish the kitchen had a different layout. No matter the housing market, it is almost impossible to find a home that is 100% perfect (unless you design and build yourself!), but you can find the 100% right home. And remember – you can always paint, redesign, or renovate!

GET PRE-QUALIFIED

When purchasing a home, it is important to know your budget and what you can afford. Before even beginning to look for homes, find a mortgage broker and get pre-qualified on your mortgage loan.

YOU’LL LOSE A FEW

And it will be okay. Bidding wars happen, folks come in with a bajillion dollars over asking price and you get bumped. It happens to everyone, and it will all work out in the end. This is one of the reasons it is important to hire a Realtor®, it is their job to negotiate, help you find the best home, and work with the seller to make sure everything is in line.