Five C’s of Exterior Home or Business Property Improvement

ProTect Painters often gets questions related to value of painting a home’s exterior.  Aside from logical idea of protecting your largest asset, this question really gets to the question of whether any home improvement is worth the effort.  This update is aimed at giving consumers a framework to sort out advice from contractors, neighbors, TV shows and family members.

Curb Appeal
View your home from various positions along the street and from the back side as well.  Be honest with your opinion.  What is your first and last impression?   The exterior of a home or business can be a very good reflection of what’s going on inside.  You cannot always judge a book by its cover.  But would you enter an unknown shabby looking restaurant versus a clean one to get something to eat. Not likely.

Comparison
Compare your home or business with those around you.  You don’t necessarily have to be the best.  But below average is a huge problem.  Your property may be detracting from the overall value of the community or worse yet be considered an eye sore.  If you are in this camp, even a small investment in improvements will go a long way.

Current Condition
The current condition of your property will have a major impact on any improvement you plan to undertake.  If the home or business is in great mechanical or physical shape, improvements will be easier to tackle.  Older properties may have special needs like bringing systems up to code or dealing with lead paint.  If the property is in poor shape, be prepared.  It is going to cost you a little more to get the property back up to area standards.

Character
Every structure has character.  These distinctive features can make it more memorable or viewed as outdated.  Properties which have two or three special features will typically be appraised at a higher value.  Just make sure you don’t overdo the project.  Consider carefully if you are altering a current distinctive feature or adding a new one.

Consideration or Cost
Even the simplest of projects have costs.  Conduct a thorough cost/benefit analysis.  Yes, you can include some emotional or intangibles here. Just don’t over-weigh your decision based on these.  If you won’t see a return on your investment, you probably should not undertake the project.  Remember that over improving will cost you both time and money.  At the other extreme, failure to address small problems like failing paint, a leaky roof or other maintenance issues will create bigger problems down the road.  Some projects have to be completed even if they don’t add immediate value.

Conclusion
No, conclusion is not the 6^th C!  But, it is where you need to end up.  Properties and homes don’t just sit there.  They are subject to market conditions, weather and normal wear & tear.  You can’t put off maintenance forever.  You may face a decision to relocate before your planned project date or budget is available.  There are also other life events like family and health changes which will affect your ability to complete DIY projects.  “Iamagonnadoit” is not always the best solution.  Consider using reputable licensed contractors for the work.  In most cases, they will do a better job than you anyway.

The best practice is to maintain your home or business at or above comparable properties in the area.  Only consider feature improvements as budgets and markets permit.  This will keep your property’s value at or above market levels in the event you decide to sell or relocate.  It is even more critical if you plan to rent or lease to others.  In general, renters just do not maintain a property at owner standards.  And high quality properties will command higher rent.  Be very careful if you are making lease hold improvements to someone else’s property.  Make sure your lease or rental agreement will allow enough time to recoup these costs.

Hope this helps a few make better decisions about home or property improvements. ProTect Painters is dedicated to helping our customers make the best decisions about their properties.  We specialize in high quality interior and exterior painting services.  But our goal is to help customers find the best resources to maintain their most important asset.  If we can help in any way, please let us know.  If we don’t provide a service you need, we likely know someone that does.

ProTect Painters of Oviedo ~ Winter Springs / 407-542-9036
Interior / Exterior – Residential / Commercial Painting Services
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“It’s the Economy Stupid!” – Economics of Painting Your Home

Many are aware of my background in institutional investment management services and years teaching at the graduate level for a major global university.  As a painting services provider, I continue to be absolutely astounded by consumers willing to focus primarily on “low or lowest price” as the main criteria for selecting a painter.  Failure to conduct a broader analysis is a substantive logical mistake.  You really need to consider more than initial pricing in your decision making.  Let’s take a quick look at the value proposition analysis and how this might be applied to selecting a painter for your home or business.

Created Scenario

A typical Central Floridian wants to get their home’s exterior painted. They obtain four estimates.  Low cost provider one bids $1,500, mid priced dude bids $3,000, double up bids $4,000 and OMG bids $6,000.  Paint is paint right?  With the exception of artistic quality, these will all look the same when the house is painted?  Gee… I don’t know.  I am suspicious of the low and high bidders.  I’ve heard we should throw these two out.  Guess the best deal is mid priced dude.  The second coat of finish paint is probably worth the extra price, but just can’t afford this option.  Done!  The consumer signs the mid priced contract and they are off to the races.

(Disclosure: The numbers, names and products here are fictitious.  This scenario is to help you understand how to make better decisions only. Any relationship to anyone is purely coincidental. No animals were harmed in the making of this scenario. Not an attorney. Not a doctor. No way! No how! Please consult a licensed and insured painter prior to attempting this on your own.)

Whoa!  You Just Made a Very Costly Mistake

Feeling great about the decision making and short-term financial gain but losing site of the total project is a critical error.  While there is no way to make you a decision making genius in a blog post, we are going to attempt to peel this onion.  It may be bitter sweet.  It might be hot.  However, you have got to expand your knowledge to gain wisdom. 

Here We Go……

The four components in this scenario have been kept simple.  They include: price, product, preparation and repaint cycle. We also assumed the consumer would select the same service level in subsequent repaints during the timeframe (hopefully after this brief lesson they won’t make the same mistake twice). The idea is to create a value proposition matrix which includes total cost over the full life-cycle of the decision.  Here’s how the data stacks up:

Bidder	Price	Product Quality	# of Coats Applied (3rd is seal or prime)	Preparation Quality	RePaint Cycle (Years)	Approx 15 Year Total Cost w/ Repaints (5% Inflation)
One	$1,500	Very High	1	Poor	3	$10,318
Mid-Priced	$3,000	Average	2	Good	5	$11,970
Double Up	$4,000	High	3	Better	8	$9,215
OMG!	$6,500	Very High	3	Best	13	$8,415

In the scenario above, you get 2 stars out of 4 for throwing out the low bidder.  This will not always work.  Change the criteria slightly for a hungry painter with high quality and you might have thrown out the deal of the day.  Not likely, but you should never default to throwing out the low bidder on price alone.

The real pain comes with the view of the two you kept.  Your decision making process was flawed and it just cost you well over $3,500. Both solutions are less than optimal. In fact, the one finish coat job from Mid Priced Dude selected is your most expensive option.  And … this doesn’t even account for the hassle of multiple repaints during the timeframe.  Yikes!  

This could get a lot worse! Given historical norms for economic recoveries, the 5% inflation number in this scenario is likely understated.  Some economists believe we could see double digit inflation in this cycle.  Imagine the difference here if inflation is higher. Yes, economics matter.  Do not ignore them.

Summary

Ok, the scenario is a bit stretched to prove a point.  Point is …don’t be stupid. You do not repaint your home frequently enough to fully understand the economics of painting.  It is a lot more complicated than price.  Make sure you are working with a professional that can fully explain these issues.  Most cannot.  If you have any doubts, call me.  I will try to help you even if you do not select ProTect Painters.  At least, you will be able to make a better informed decision about the investment on your project.

Quality that lasts typically requires a higher initial investment.  But …it’s frequently the optimal solution.  ProTect Painters of Oviedo ~ Winter Springs is the first choice provider for interior and exterior painting solutions throughout Central Florida.  Call us today for your free evaluation and detailed estimate.

The Dark Side of Exterior House Painting …Choosing Colors for Great Looks and Longevity

The most commonly used exterior paint color for Central Florida homes is what we call “builder beige.”  It seems we have been lulled over the past 15 years into thinking this neutral, good coverage, yet boring idea is the standard for homes.  But wait!  There could be some rational reasons for this color selection.  Read on for more on this idea.  Regardless, if your home is builder beige and less than 10 years old, you probably have never painted the exterior and are well overdue for updating your home.  So… what color are you going to choose?

Time to Paint Your Home?

Beyond the sticker shock of painting your home properly, the most common questions are what color and how long will this last?  If you are painting your home for the first time, your builder paint may have lasted only 3-5 years.  That builder beige just did not hold up to your expectations?  “We don’t want to do that again!”  Before you throw the beige under the bus, considering there could be other issues here as well.

Painting a home is 90%+ preparation.  New construction surfaces create difficulties.  They absorb paint at uneven rates and curing masonry continues to leach salts for a long time.  Builders are faced with the tradeoffs of home delivery times versus longevity/protection of the coating applied.  Since most consumers know little about paints, most builders apply products designed to get the production completed quickly and at lower cost.  Looks good for the initial sale but does not produce quality long-term results (Note: In 2004 storm leak cases, many builders cited it was the homeowner’s maintenance responsibility to paint the home and avoid water intrusion issues.  Some of these lawsuits are still pending.)

Properly applied, today’s paint systems can last well beyond the 3-5 year range above.  Typical repaint cycles fall into 5-7 year, 8-12 year and 15 year+ ranges based on the amount of surface preparation, paint system selection and color.  In most cases, the repaint on your home should outlast the original builder paint on your home.

What’s and Why’s of Color

Can we talk here?  Better paints just work better.  Paints are a combination of chemicals and pigments used to provide protection and color.  Paint technology is constantly evolving but color selection has a tremendous impact on performance.  Ultraviolet (UV) light is absorbed or reflected by the color affecting how long a paint job will last.  Apply the best paint you can find for the application (PS – Cost alone is not a factor.  Some very expensive elastomeric products fade worse than high quality latex coatings.)

Dark colors on the body or trim draw attention to the property.  They are also more prone to fading.  They absorb more heat and are likely to be subject to additional moisture problems.  Touch ups for ongoing maintenance can be an issue since the color in the can may not match the house.

Beiges, browns, tans, and earth-tone colors (inorganic) tend to be more stable on exterior exposure.  The pigments used in these colors are less likely to break down then the pigments in reds, blues, greens and yellows (organic colors).  This is especially true in hot sunny climates, like Florida, where the intense UV exposure exerts a heavy toll on exterior paint.

Some manufacturers have been trying to extend color warranties but this practice is too new and yet to be tested completely.  Keep in mind they only warranty the paint and not the paint job.  The cost of materials is small relative to the labor and preparation required to paint your home.  These products are 20-40% more expensive than the most commonly used paints.  Personally, I am not convinced they are any better but data here is very limited at best.

What Colors Should You Choose?

The ones you like – of course!  You can pick any color under the rainbow as long as it is the one which meets your objectives (And maybe the objectives of your HOA as well … always check the rules before proceeding.)  Just be advised that not all colors are created equal in the eyes of the paint gods.  Please take fade, durability, maintenance and longevity under consideration.  If long repaint cycles are your goal (10-15 years+), then avoid the dark colors and stick with inorganic tones.  If you like to change colors frequently, the live it up.  It’s your home.  Enjoy the colors you like and plan on more frequently repaints. 

Try Before You Buy

One of the best ways to select colors for your home is driving around.  Take a look at houses in various neighborhoods.  Take pictures of those you like.  You might even considering knocking on the door and asking what color they used.  “I love the color of your home.  Would you mind telling which color you selected?”  Don’t worry about the brand of paint. Today’s laser guided paint match systems can find the color match for your home.   Get a test sample of the color(s) and paint them on your home.  (Colors tend to look different on the wall than on the chip or in the can).  Adjust your colors slightly until you find the ones the match your style, mood and objectives.

Still Confused?

Color analysis paralysis?  Ok, time to get help.  They are many options here.  First, call a painting contractor.  They don’t always pick colors but the good ones can help you evaluate the pros and cons of the colors you have selected as well as the best products for your home.  Go to the paint store and look at some of the pre-selected color themes for homes.   Paint companies spend thousands designing these for your use.  Try some of the free color sites on the Internet.  They tend to be selling something but may offer some help for your project.  Check out the local interior designers.  They may have a color designer on staff.  For a fee, they will provide a consult and several color palettes.  If you are selling your home, consider home stagers.  They will give you advice on how to dress up your home for today’s market.

What’s the Value of Painting & Staging Your Home

Several of you have asked this question.  It is a great question and one that is very difficult to answer.  I conducted a literature search on the web for subjects including home staging, value of painting, return on investment for painting and other terms.  A sampling of info obtained is included below.  No wonder consumers are confused, the data is spotty and the opinions are wide and varied.  There is one common thread.  They are all very positive!  Staging and painting your home adds value.

 Bottom Line

•  Painting your home on the outside and inside, assuming you complete the job in a professional manner; increases curb appeal and adds value.
• “They” (buyers) are not like “you.”  Hard to swallow but you really need to paint over those dream colors with something neutral. Premium buyers want “move in now” quality.
• Painting is relatively inexpensive.  Typical Central Florida home exterior painting might cost $1,000 to $4,000.  Interior makeovers more or less depending on the tasks needed.
• Staging a home accelerates the sale.  Typical results: 40-90% less time on the market.
• Small investments here provide large upside return results.  Data suggests the results can be 200-500% of your investment.  Assuming a 300% return, a $5,000 painting makeover could net an additional $5,000 to $15,000 in your pocket at closing.

I will continue to work on finding better refined data on this topic.  If you have any reliable data or personal experience in this area, send me a note and include the source of your data.  I will consider adding your information in a subsequent update to this blog post.  My email address is gordon.boardway@protectpainters.com.

 Sampling of Comments Obtained in Web Search

 myfirsthomeblog, Top 10 Home Improvements For Adding Value, #1 & #8

1. 1.     “Enhance the Curb Appeal The simplest rule to follow when choosing home improvement projects is to consider what can be seen and work on those things first. Curb appeal is one of the primary determining factors for potential buyers. And while not a large factor in appraising home value, appearance is paramount in terms of sale price. So how do you increase the curb appeal of your home? Start by reducing clutter, painting your home’s exterior and improving the landscaping”
2. 8.     “Paint and Redecorate the Interior
   Be sure to use neutral colors when repainting your home’s interior. Remember that interior decoration is very personal and future owners may not like any bright shades you may have used, or the prospect of struggling to paint over them. If you do decorate your home with bright paint, be prepared to paint over it with neutral colors prior to putting the property up for sale.”

 JUNE FLETCHER, of The Wall Street Journal

“..a study showing professionally “staged” homes sold in 13.9 days, half the usual time on the market — and went for 6.3% over list price, or four times the average markup on unstaged homes.”

Trish Pachak, Home Stager, Westminster, CO

“95% of the homes Staged by WSC have sold in 33 days or less as compared to the non-Staged competition which sits an average of 195 days. U.S. Housing and Urban Development reports that a “Staged” house sells, on average, for 17% more than a house that is not staged. According to a report by the Christian Science Monitor, Staged homes sell for 7.4 percent more and in half the time. Whichever statistic you agree with, it’s obvious that staging your home for sale can make you more money.”

 StagedHomes.com

“Statistics gathered by Stagedhomes.com shows that 95.6% of homes Staged^® by an Accredited Staging^® Professional^®, ASP®, sell within 37 days compared to an average of 212 days for non-Staged^® homes. ASP^® Staged^® homes are on the market 83% less time than a non-Staged^® home.”

 Real Estate Staging Association

“Our study includes 87 vacant homes (not staged) previously on the market an average of 277 days unsold. Those homeowners had their properties staged. Those same homes sold in 63 days on average after staging. This is 78% less time on the market.”

 Staged by Design, Seattle

“Here are the results of month 11 of reviewing sold homes in the Seattle area.  In our research, we found that in the Seattle Area in July, 217 homes sold that were listed between $500,000 and $1,200,000.  Of those that sold (excluding Waterfront and Waterview listings) 70% were Staged Homes, 30% were non-staged or empty. Average days on Market for Staged Homes was 58, whereas average days on market for non-staged homes was 98, a difference of 40 days.  Average difference of asking price and sales price for Staged homes was $28,488, whereas the average for non-staged homes was $30,471. ‘

 realtor.com, Frequently Asked Questions

“How Do I Increase My Home Value?” “Paint – interior and exterior – is an easy, inexpensive way to increase a home’s value.”

 myspendingplan.com, Home Improvements: Dos And Don’ts For Increasing Resale Value

“Adding a fresh coat of paint to the interior and exterior of your home can increase its value considerably.”

July 2010: Cost of Painting Your Home or Business Going Up 20-40%

One of the most difficult ideas to grasp is why prices rise in a down trodden economy.  Evidence is mounting for a major rise in paint prices and the cost of painting your home or business is going to go up quickly. 

On June 30, 2010, Bloomberg (http://www.businessweek.com/news/2010-06-30/akzo-ppg-profit-squeezed-by-paint-materials-shortage.html) reported a shortage of raw materials affecting paint manufacturers.  “the price of acrylic acid, a resin that binds pigments together, jump 71 percent in the past 12 months. Titanium dioxide, which makes paint opaque, has risen close to a record this year, while there’s not enough methyl methacrylate, which is used to create weather-resistance.”  Paint product sales are rising lead by the recovery in the US and Asia markets. 

Perfect storm ahead?  Supply and demand fundamentals at work.  Inflation just around the corner.   According to Pilcher, who formerly worked at Akzo, the world’s biggest paint maker, and Sherwin-Williams Co., the third- largest. “There won’t be enough house paint to go around.”   The consensus forecast for inflation in 2011 is around 5.5%.  Add this to ongoing supply and demand pressures and we could see the price of paint for your home jump 15-20% by early next year.

Thousands of consumers have delayed painting their home or business properties during the recession.  Many of these properties are experiencing damage from weather.  The cost of repair may soon exceed maintenance.  As a result, the painters are seeing a rise in requests for repaints.  Demand for services could push the price to paint up another 10-20% as contractors seek profit margins closer to historical norms.

The Bottom Line:  Painting your home or business may never be cheaper than right now.  The nationwide 25-50% off sale is almost over.  Prices are going up quickly and you have to act fast to get in at these levels.  Don’t put off that painting project any longer.

Solution for the Real Estate Markets, Local Jobs and Economic Growth

As someone who spent almost 30 years in the institutional investment management business, I never imagined considering house painting and home improvements as an investment.  However, recent data suggests these could provide superior returns.  In this economy investors need to seek alternatives to financial instruments.  Stocks, bonds, and mutual funds that hold them, have done nothing impressive recently.  Markets are stagnant.  Investors frequently have no clue that a large portion of their dollars fund foreign jobs.  We need immediate help in our local communities.

Have we sold out everything to foreign trade or just lost our sense of what works?  Oil wells exploding which were monitored by someone in Marshall Islands, not the U.S. mainland, foreign interests planting spyware in our top secured national databases, and even outsourcing of the computer chip in the U.S. passport to a foreign manufacturer.  Bet the comedians can build an entire show out of just these three alone.  Well… I don’t find any of these funny at all. 

We forgot the most important person – the customer.  This customer is us.  Real estate taxes represent a large portion of the fuel which runs our economy.  Why not invest in something which increases real value, generates local jobs and provides additional revenues to your municipality.  Cash for cars and cash for appliances helps fuel purchases but a large portion of the profits go overseas.  Most of this stuff is not made here.

It is time to get the bailout boys fingers out of the dike (or wherever they have them), fix the fundamentals and rebuild a large portion of the American dream – homeownership.

Central Florida Status – Opportunity Better Than Almost Anywhere in the U.S.

As reported in the Orlando Business Journal June, 15, 2010 (http://www.bizjournals.com/orlando/stories/2010/06/14/daily22.html?iana=e_du_pap&t=printable), “Central Florida ranks among the U.S. metropolitan areas hardest hit by the recession, according to a new report from the Brookings Institution (Brookings: Latest From Brookings) The Orlando area ranked 85th out of 100 metropolitan areas struggling through unemployment, job losses and a crumbling housing market. Between 2007 and the first quarter of this year, the Orlando area lost 9.6 percent of its jobs. Central Florida home values plummeted 21.7 percent between the first quarter of 2009 and the first quarter of this year, when adjusted for inflation, the report found. Home values have fallen 41.2 percent between the first quarter of 2007, when the housing market began to slide, and the first quarter of 2010. Orlando also had among the highest number of real estate-owned (REO) properties in the country, ranking No. 94 out of 100 metro areas.”

This equates to an incredible loss in real estate taxes.  The solution is not raising taxes.  We must address the fundamental issue.  Taxes are based on real or perceived value. Investments which increase value, generate property sales and fuel local jobs are needed.  But you better move quickly.  Builders are not building anything new these days.  Mark my words; there will be a real estate shortage at some time in the not so distant future.  The greatest returns always go to earlier risk takers who see the pattern and cyclical nature of investing.

The Solution

Create a Central Florida program, investment pool, REIT, or whatever format you can use to fund strategic growth through real property improvements in the local community. I know what you are thinking.  We can’t get municipalities to agree on anything.  Fine!  Don’t bother them.  Form a citizen’s run group to get this up and running.  Is there anyone out there who would like to be on the Central Florida hero team?  Perhaps there is an astute investor out there that can help?  Let me know.  I will be glad to help, but I do have my own business to run.

The Idea

Create incentives for homeowners including bank REO to invest capital in strategic home improvements designed to increase value, sell property and create local jobs. 

Let’s use the 10 recommended improvements from Home Gain (http://www.homegain.com/sellertools/calculator) as a proxy or example.  Using my local area (32765), all ten improvements have a Return on Investment (ROI) greater than 100%. I taught graduate level finance classes for 15 years.  The answer to the, “Would you accept this investment?” question on this one is undoubtedly yes. 

It seems that home sellers including bank owned properties should be incented, encouraged and funded to complete these improvements.  Home Gain’s numbers are based on DIY.  However, banks and many individual sellers will hire skilled professionals to complete the work.  Work requires both products and crews.  This creates jobs, economic growth, real estate sales/appreciation and increased real estate tax revenues.

Call to Action

If you believe one person can make a difference, then help me find a better solution to this mess we created.  This is not a bailout.  Bailouts only minimize the downside.  They stick a finger in the dike and don’t address the fundamental issue.  This is a “bail-in.”  You cannot run a machine without fuel and water.  My proposal is an investment in US jobs and our local economy. 

There are thousands of bank REO properties in Central Florida alone.  Do the math.  Take a $250,000 property and complete all ten Home Gain services.  Let’s say the investment is $30,000.  The Home Gain average return in my area is 301%.  $30,000 x 301% = $90,300.  You take a distressed property from $250,000 to $340,000.  At least 20 people or more get income from jobs created, the property is no longer in distress and local community gets at least another $180-225 to pay for local services.  That just might be enough to pay for the firefighter coming to save your life on the next call to 911.

Come on Central Florida.  It’s time to start putting this town back on the path to growth.  Stop complaining about how bad things have become.  Make some strategic investments in your future. 

The Asterisk*

I suppose there has to be some form of disclosure on this blog post. It seems everything today is regulated.  Thank God we still have the freedom to express an opinion in the U.S.  However, in the spirit of full disclosure, I do have a vested interest in the funding of home improvement services.  My company provides interior and exterior painting services for homes and businesses.  These services are included in the top 10 Home Gain home improvements recommendations.