Sightseeing in Austin and Lake Travis

This past weekend I took a cruise on Lake Travis. It was the first time on Lake Travis for me. It was a blast. I rented a pontoon and drove around the east part of the lake. I checked out Hippie Hollow, the Oasis and Mansfield Dam.

Home Improvements

Its been a busy month for me. I closed on a new house March 10th, 2010. I went to Charleston, South Carolina on March 12th for a wedding for and old college friend. Been trying to move in ever since and get it ready. I have absolutely no furniture and will be starting from scratch. First things I got was a bed, TV and recliner. I also had a Water Softener installed and gutters installed all around the house. Lennar only had front gutters installed.

Things To Look For In A New House

Here are all the things I really like about my house. If you are looking for a new house I would consider only a brand new house at this point. Look for these little details. They make a big difference in the long run and believe it or not, the cost of a new build really isn't that much difference then a used home. This list is, admittedly, a list of "technical" things, since Im a technical guy. If you want to see a listing of non technical items then just do a google search.

Brand New Construction using the latest in building technologies and meets all the high-efficiency code of Austin Green Building Program. All new homes have to be built with the latest building codes. Most of these codes require better building techniques and money saving energy efficient materials to be used. A new home will be warrantied for at least one year and many major items warrantied for up to 10 years. Why settled for a home "as-is" when you can get warranty and some peace of mind for the same price or better? Look at JD Power's rating for builders in your area. Here is a link to the builders ratings for Austin, TX.

LP TechShield, Radiant Barrier used on the roof to block 97% of the radiant heat of the Sun. This alone will save allot in cooling and heating the house, especially in the hot summer months of Texas. The barrier typically reduces heat in the attic by up to 42%, which equals to about a 17-39% monthly savings on cooling costs. There are many suppliers of radiant barriers and the technology is relatively simple and very effective no matter who you use. Existing homes can also be retrofitted with the technology to achieve similar results.

TJI Engineering Wood used to support the 2nd floor, this prevents squeaks in the floor. TJI joists resist the bowing, twisting and shrinking that can lead to squeaky floors. TJI joists save on labor because they are lightweight and install quickly. The beams are stronger then lumber wood and can span much greater distances without additional support beams underneath. The technology is also "Green" since you can use scrap wood in the OSB layer.

Lime Stone exterior, just looks dam nice. Any brick or stone house always looks better then a non brick house. While it is just a facade and provides little structural support, it still acts as a thermal mass to help moderate the house's overall temperature. On this house the Lime stone is literally 4 inches thick. They say their is little insulating value to the stone, but I still feel like it takes longer to heat up in the morning sun compared to a wood or vinyl sided home.

High Efficiency HVAC system - a 14 SEER Lennox Air Conditioner and heat pump - costs less to keep the house cool and heat. If the temperature falls below freezing then a back-up radiant heater kicks in.

Dual pane low E Windows . The glass is coated with a thin layer of tin. This absorbs the UV rays and prevents the heat from entering the house. The window frames are also made of Vinyl which is more insulating then aluminium when tends to conduct heat more readily then vinyl.

Seven zone Sprinkler system that shuts off automatically with use of a rain sensor. This wireless device has a ceramic sensor that communicates to shut-off the system if it is wet outside.

Jump ducts in every bedroom for better circulation and energy efficiency. Typically, when you close a room door the ventilation system has to work harder to push air through the closed door. By adding a vent to the each room the system can just push the air through the vent for better air flow. The only hassle now is that I have more filters to replace in each room, but this is a better way in the long run.

DSC Security System with wiring for CAT5, telephone and Fiber Optics. I have a fiber optic connection at the road. This should give me the fastest possible Internet connection. The house being pre-wired means that an installer doesn't have to worry about fishing cables through all the walls.

I don't cook much, but I love the look of Granite Counter tops in the kitchen! For what ever reason, after looking through so many homes, a plain laminate counter top just says old and dated to me. Yes, Granite doesn't add much functionality to a home for a guy that doesn't cook much, but dam a Granite kitchen just looks awesome! It is one of those things that catches the eye and makes you fall in love with the place. Click the picture to see the entire counter top.

(you can click on at picture above to see more details..)

New Home Purchase

I put in an offer on a new home today and it was actually a brand new construction from Lennar. I never really thought I would ever buy a new home, especially in this economy with so many foreclosures on the market, but the deal I got was unbelievable.

I falsely assumed that all the good deals would be foreclosures or short sale. The reality is that new construction homes in Texas are very competitive against used homes and even some foreclosed homes. I actually will be paying less in the long run for a 3,282sq/ft home, 4 bedroom, 3.5 bathroom ,lime stone, home then a similar one currently listed on the market today, after you include the costing cost, repairs and all the appliances that I would have to get.

The builder is paying all my closing costs and buying down my interest rate to 4.25%! I basically just come to closing with my down payment. I also negotiated $30K off the list price, with a new Washer and Dryer. The house already had a new fridge, stove, microwave, garbage disposal, garage door opener, granite counter tops and sprinkler system. And I did all this without a Real Estate Agent!

Real Estate Agents will tell you that you need them to "look out" for you and that the sellers are only interested in themselves. In reality, the agents are looking out for themselves and to take a 3% cut of your sale for doing very little.

After this purchase, it will be my 4th house that I have purchased by myself with no agent other then the seller's agent working with me. I can honestly say that I have never had a bad experience doing it myself and have saved more money this way then using an Agent.

Reasons to be buying now: I basically decided that now was the right time to be buying a house. Here are a few of my key reasons.

- After March 2010 the Federal Reserve will stop buying Mortgage back securities from Fannie Mae and Freddie Mac. Basically the government has been buying up 90% of all loans for the past 1.5 years. After March interest rates will go up, unless they extend this program. I estimate that rates will go from 5% to at least 6.5%

- After April 2010, the $6.5K-$8k tax credit will be gone. Basically the government is giving away free money if you buy a house by April 2010. Even if you don't pay taxes, you will get this "credit"...

- Seasonality - basically the winter is the slowest time of the year for home sales. Buying at this time, is when less people are buying giving sellers more motivation to sell and to discount prices.

- Builders are desperate to sell there inventory and will pay all your closing costs and even buy down your interest rate. I am getting a 4.25% rate and they are paying over $11K in costs on top of a $30K discount to the list price!

From 2-27-2010

Why does the IRS ask your Job Title? and Austin Plane Crash

Why does the IRS ask your job title? The simple answer is because their are specific tax laws that vary depending on what you do for a living. Specifically the "Self-Employed" status or sole proprietor status.

If you are a self-employed person and do not fall under an "employee" status, you can generally claim many additional expenses, as tax deductions for against any monies received. This is a tremendous tax advantage over an employee, where the employer must pay income taxes for that employee's entire salary.

Typical self-employed careers would be a lawyer, accountant, Doctor, construction worker or dance instructor. All these jobs can be paid a fixed amount per hour to the individual. That individual does not pay income tax on the monies received. Taxes are only applied at the end of the year or quarterly after all expenses are accounted for like office space rent, office supplies, software, car, travel, tools and training costs.

Current tax rates for a self-employed person is 15% for the first $50,000 in net earnings. Where if you made $50,000 as an employee at "normal" job you would be tax at the 28% tax bracket. Think about that.. As an employee your tax rate is almost double that of a self-employed person. So you make $50K working for someone then you have to pay $14k in taxes. But if you work for yourself and made $50K then you only owe $7.5k

The self-employed are at a great tax advantage here. Keep in mind that self-employed typically don't have any benefits like health care so they have to pay all that themselves. In any case, its still a big difference in taxes.

Back to my original question about your job title: This self-employed status is great for many workers in the USA, except in 1986 Congress pass a law that excluded some jobs from being "self-employed." This group of workers were primary technology workers. The exact text was "engineer, designer, drafter, computer programmer, systems analyst or other similarly skilled worker engaged in a similar line of work..."

So this entire group of workers could not work for themselves because some clever government lawyer wanted more tax revenue and decided to single out this group of workers to extract more taxes from them.

Now, I am a technology worker and I ask why not also exclude private lawyers and accountants? Well the answer is simple. It was a lawyer and an Arthur Andersen accountant that wrote the exception into law. Why would those skilled trades people shoot there own profession in the foot?

This law is totally unfair and discriminatory to single out an entire profession. And this was one of many reasons why Joe Stack killed himself flying his plane into the IRS building in Austin, TX. Now, I'm not condoning what Joe did, he was crazy. But I read his suicide letter and tried to put myself in his shoes. I can say I understand his frustration. This law needs to change, but I would never condone anything crazy like what he did..

Here is a NY Times Opinion Editor about this law,

http://www.nytimes.com/2010/02/21/opinion/21shulman.html