HOW CAN UPGRADES TO MY NEW HOME SAVE ME MONEY?
 
Here is an important cash flow consideration when buying a Bullfrog Builders home.  Although some upgrades cost more money up front, they can actually save you money each month, and in some cases, they will save you more money each month than they cost.  That is hard to believe, but let’s consider a few examples.
 
Example 1:
 
If you spend about $15,000.00 more up front to buy solar collectors that convert the sun’s energy to electricity and it causes you to have a zero electric bill, it would be worth considering even if you disregard all of the other benefits.
 
Based on a 30-year mortgage, 5.5% interest, for each $1,000.00 you finance, it costs $5.68 per month.  Your cost of the solar collectors adds $15,000.00 to the price of the home and will only make your payment about $90.00 more per month. 
 
If the estimated monthly utility bill is $190.00 per month (average), but you have an average utility bill of “0” because you make as much electricity as the home consumes, then you are actually profiting $100.00 per month!
 
                                              $190.00 Utility Savings
                                             -   90.00 Extra Per Month on Mortgage
                                              $100.00 Per Month Positive Cash Flow = $1,200.00 Per Year
 
Not Bad!
 
Example 2:
 
Steel frame construction.  If you spend $5,000.00 more for a steel frame and use the same math as outlined above, it is $30.00 per month.  Since termites don’t eat steel, you save future exterminating costs that can be very costly with a wood frame home.  It is estimated that on a wood frame home the homeowner will spend an average of $15.00-$20.00 per month or more preventing and/or repairing termite damage.  This can be an aggravation and maintenance item.  With a steel frame home, you won’t have to worry.  The other savings is in insurance.  If your homeowner’s policy costs an estimated $1,000.00 per year and you get a 30% discount for having a steel frame home, you will save another $300.00 per year or $25.00 per month. 
 
So your savings look like this:
 
                                     $30.00 Extra Per Month on Mortgage
                                    - 15.00 Savings on Termite Treatment, Maintenance, etc       
                                    - 10.00 Savings on Insurance
                                     $10.00 Profit!!
 
By spending a little more up front for a better product, you actually gain $10.00 per month.
 
Then, there are the upgrades, which we consider “creature comforts”.  Creature comforts are items that make you feel better or save you time or look better than a less expensive item that performs the same function.  An example would be an icemaker in your refrigerator.  It costs about $100.00 extra, but it is convenient, and you never have to refill or deal with ice trays   Another example is when you buy a new car and you choose to spend $400.00 extra for electric door locks instead of manual locks or $500.00 extra for electric windows instead of the old crank style. 
 
In fact, we have all become so accustomed to these comforts that we have come to expect them as a standard feature instead of an upgrade, especially when buying a new car, and we generally never even question the fact we are paying very large sums of money for these features.  And, remember, when you drive a new car off of the lot, it has already gone down in value.  You will never get your money back out of it!
 
On the other hand, when we invest in upgrades in a new home, it is rare that the home goes down in value.  In fact, these creature comforts are certain to make the value of your home go up.  Unlike the new automobile that goes down in value immediately, a new home will go up in value.
 
Here is a sample of items that are upgrades that do not necessarily save you money on the monthly cash flow, but will almost surely come back to you if you ever sell your home.  Note the average price and monthly increase on the mortgage payment.
 
 
 
Granite countertops-kitchen
Wood floors in living areas
Interior stone wall accent
Upgrade light fixtures
Stained concrete floors
Covered patio
Two (2) tile or marble shower wraps  
Estimated
Cost   
 
$2,000  
500  
1,000  
500  
1,500  
2,500  
750  
       Increase in
Mortgage Payment
 
    $12  per month
    $12  per month
    $  6  per month
    $  3  per month
    $  9  per month
    $15  per month
    $  5  per month
 
As you can see, many features that can greatly enhance your home can be part of the overall plan, yet only cost you a couple of extra dollars per month.  Your home is an investment that will go up in value, so you won’t have to worry about losing your money, as in the example of buying a new car.  The monthly interest is also deductible on your tax return.
 
One last thing to consider is how the added features make you feel.  This is your home where you will live and raise your family.  It is important to feel good and have a sense of well being in your home.  Your home is where you will make fond memories to be cherished.
 
Some things are more important than cash flow or profit, so choose your upgrades wisely.  I hope that my staff and I will be your choice in fulfilling your new home dreams.