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What Homeowners and Investors Need to Know About Roof Replacements


Apr 01, 2020 by Matt Frankel, CFP

Replacing your roof can be one of the more expensive home repairs you'll do, with project expenses often coming to a five-figure sum. While nobody wants to pay to have their roof replaced, by knowing some valuable information, you'll have a better idea of what to expect throughout the process.

With all of that in mind, here's a guide that can help you determine whether you need a roof replacement, how much you should expect to spend, how to pay for it, and what you should expect during and after your roof replacement.

Do you need a roof replacement?

The best way to know for sure whether you need a new roof is to hire an experienced roof inspector, but there are some signs you can look for:

  • Your roof is more than 20 years old.
  • The roof shingles have curled edges or are cracked.
  • Some areas of your roof materials are visibly darker than others.
  • Most of your asphalt shingles are missing granules, or you notice a lot of particles from your shingles building up in the gutters.
  • You can see daylight coming through cracks or holes in the roof when you stand in your attic, or you can see holes in your roof shingles or material.
  • Your roof has areas that are visibly sagging.
  • There are signs of water damage to your attic or the ceilings just below the roof.

Of course, sometimes your roof material just looks like it's clearly beyond its lifespan. Again, the best course of action is to ask a professional roofing inspector or call a roofing company to get a thorough assessment of how much longer your roof could last -- if at all.

How much does a roof replacement cost?

The average homeowner spends $7,902 to install a new roof, according to HomeAdvisor (NASDAQ: ANGI), but it's important to mention that this can vary significantly.

Factors that determine how much you'll have to spend include:

  • Roof area: This is an obvious variable. Replacing 1,000 square feet of roofing is going to be significantly cheaper than a 1,500-square-foot roof installation, with all other factors being equal.
  • Condition of wood: This was a variable I hadn't accounted for when replacing a roof recently. When you get a replacement estimate from a roofing company, it usually assumes that some of the underlying wood is no good (my estimate accounted for one sheet of plywood and a few two-by-fours). Replacing the plywood can easily add $1,000 or more to your roof's price tag.
  • Roofing materials: The type of materials used for the new roof are perhaps the biggest factor that determines the cost. Asphalt roofing shingles cost $3.60 per square foot on average, according to HomeGuide, but vinyl shingles and metal roofing cost significantly more, at $4.40 and $8.00 per square foot, respectively. Slate roofs average $14.80 per square foot, or about four times the cost of an asphalt shingle roof.
  • Geographic location: Simply put, roofing services and materials cost more in certain parts of the United States than in others. If a roofing company faces a higher labor cost, you can expect to pay more for a roof installation. Permitting costs also vary considerably based on location.

When it's time to replace your roof, it's important to get estimates from at least two or three different roofing companies. It's not uncommon for estimates to vary by a few thousand dollars, even for the exact same roofing materials.

Can you finance a roof replacement?

First off, if you're replacing your roof because it was damaged by a certain event, such as hail or vandalism, check with your insurance company to see if you're covered. Insurance won't pay for age-related roof replacements or replacements necessary due to neglected maintenance.

Some roofing contractors allow customers to pay for their roof installation in installments. As long as the fees and interest they charge are reasonable (comparable to what you'd get from a bank loan), this can be a good option.

Other ways to finance a roof replacement include a home equity loan or home equity line of credit (HELOC). Because these are secured by your home itself, they typically have relatively low interest rates when compared with other types of bank financing.

A personal loan can also be a good option. The market for personal loans has exploded in recent years, and this can be an especially good choice if you have top-tier credit.

Finally, if you can pay for the roof within 12 to 18 months, it could be a good idea to look into a credit card with a 0% introductory APR. There are a ton of good options on the market, and this can be a great way to spread the cost of your roof out without paying any interest at all.

How long does it take to replace a roof?

While it may seem like a long and complicated job, the average roof replacement takes just a couple of days. I recently had a roof replaced on a triplex I own, and the job was finished in just two full work days.

Plus, it's important to know that you'll still have full use of your home while the roof replacement is going on. There's certainly going to be some noise to deal with during working hours, and it's a good idea to keep your kids from playing outside near the home while construction is going on, but generally speaking, roofing construction crews won't need to be inside the home at all.

How long will a new roof last?

The expected lifespan of your roof depends on two main factors:

  1. The material used: Roofs made of slate, copper, or tile can easily last for 50 years or more. Fiber cement shingles last about 25 years, and asphalt shingle roofs typically last 20 years.
  2. The climate where you live, especially if the roof is often subject to harsh conditions like snow or tropical storms.

There are a few things you can do to help your new roof last as long as possible. First, make sure (or have your contractor make sure) your attic is properly ventilated to prevent the plywood that supports your roof from rotting. For example, if your bathroom exhaust fan vents directly into your attic, it could create a damp (rot-inducing) environment that could accelerate your roof's deterioration.

You can also help keep your roof young by cleaning your gutters regularly to prevent water buildup and cutting back tree limbs that are touching your roof.

Is a roof replacement tax deductible?

The short answer is "not really," but there's a way that a new roof can help you save on taxes over the long run.

Specifically, a roof replacement is considered a capital improvement. This means that it's added to your cost basis for the property, which could come into play if you sell for a gain. As a simplified example, if you buy a home for $150,000 and sell it a year later for $200,000, you have a $50,000 capital gain that could be taxable. However, if you spent $10,000 on a roof replacement, you would treat it as if you spent $160,000 on the home, thereby lowering your taxable gain. (Note: Capital gains tax is a complicated subject, especially when it comes to the sale of a primary home, so ask your tax advisor if you have any questions.)

Real estate investors get to add the cost of a roof replacement to their cost basis as well, which can result in larger depreciation tax deductions each year.

The Millionacres bottom line

A roof replacement might seem like a complex and costly home renovation project, but if you know what you're getting into, you'll be well positioned to get it done at the right price. You'll also know what to expect before, during, and after the replacement.

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Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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