Am I throwing my money away on my house!?

April 6, 2009 11:52 AM

We are concerned that we are throwing our money away on home improvments! Help!

So my wife and I bought our 1st house almost 4yrs ago. It's a cute little place built in the 40's in a young /artsy popular area of town (Indianapolis). We wanted to make sure we bought a place that we could easily afford and we wanted a yard etc. Since we've moved in we've paid to replace the ancient windows in the basement with nice new glass block windows. We've added a dishwasher (there wasn’t one before we moved in). We've pulled the nasty carpet out of the main room and had the hardwoods all redone. We've had the driveway re-sealed, and a hodgepodge of other small updates. I have paid to have all these things done as I'm not handy around the house. There is no doubt that the house is in better shape now than it was when we bought it 4 years ago for $105K

There are still many other projects I'd like to pay to have done (new insulation in attic, countertops, new tub/shower, etc.) but I'm scared that I'm throwing my money away since we already have one of the nicest houses on a kinda shitty block. Also, the house next door to ours has been abandoned for about a year (foreclosure) and is on the market for about $65k!?!?

We are in the midst of trying to have our first baby, and we don't plan on being in this house for more than a few more years (for numerous reasons) and would like to move more to the burbs eventually.

I'm already afraid that with the housing crisis we wont even break even on this place when we try to sell in a few years, and I'm scared to spend anymore money on the place. Any advice or suggestions you guys can offer would be most appreciated!!

posted by Hellafiles to home & garden (7 comments total)

Hmm. There's no real knowing what will happen to the market in the next few years. I'd make the improvements that affect your current standard of living. The new insulation will likely pay for itself in terms of saved heating costs and comfortable home temperatures. If the old tub or countertops look really icky, I'd have them replaced (heavily scratched countertops can be a health issue because it fosters bacteria). Otherwise... no, I wouldn't be pouring money into a place if I only intended to remain there for a few more years if it were already the nicest house on the block regardless of what the market looked like.
posted by orange swan at 11:59 AM on April 6

I agree with Orange Swan. Not knowing what the economy will be like in the next few years, and if you already have the "nicest house on the block", it makes sense to only do home improvements that will benefit you NOW (i.e., insulation, etc...). Good luck!
posted by Hanuman1960 at 12:13 PM on April 6

The advice you have been given already is the advice you need.

Generally speaking, it's better to have the worst house in a nice neighborhood than the nicest house in a worse neighborhood for resale value. If you're looking to move shortly, that's what you should be focusing on, as much as I despise saying that.
posted by wierdo at 12:22 PM on April 6

There are still many other projects I'd like to pay to have done (new insulation in attic, countertops, new tub/shower, etc.) but I'm scared that I'm throwing my money away since we already have one of the nicest houses on a kinda shitty block. Also, the house next door to ours has been abandoned for about a year (foreclosure) and is on the market for about $65k!?!?

It's hard to tell without knowing the specifics of your house and your neighborhood (you might want to check out what Zillow's estimate is for your house), but the general rule of thumb is that once your house is worth a lot more than the other houses in the neighborhood you're going to have a hard time selling it for much more no matter what improvements you make.

I would suggest thinking about these kinds of improvements as purchases rather than investments. When you spend a significant amount of money on something else (such as a vacation), you don't expect to make it back somehow later. Other than improvements that will save money in expenses (such as insulation), make decisions about spending money on your house the same way that you would decide to spend money on anything else, by considering your budget and weighing the value of the purchase. If it turns out that you end up selling the house easier or for more money based on those improvements, think of it as a bonus.
posted by burnmp3s at 12:50 PM on April 6

Also, if your attic is accessible to you -- consider doing it yourself. You can buy insulation at Home Depot and just roll it out. It'll take a day to get into all the nooks and crannies -- stop by Goodwill and pick up a big shirt and pants that you can throw away later. And then get 'er done. If your countertops and tub are serviceable, I'd leave it be.
posted by amanda at 2:00 PM on April 6

What everyone is saying: Your standard of living, and actually having the home you love and enjoy is what counts. Consider this: Even if you do actually take a loss when you eventually sell the property, if you had rented all those years, all of that rent money would be "lost," in a sense. For you as a homeowner, your "rent" is your PITI (principal, interest, taxes, insurance) plus what you spend on maintenance, repairs, and improvements.

If that works out so that you can afford it within your budget, and you have the home you love while you live there, that's o.k. -- even you do end up taking a monetary loss on paper. (says one who's done this more than once)
posted by Robert Angelo at 3:14 PM on April 6

I would recommend that you find a local realtor now, and get their advice on what's worth fixing up and what's not. You could offer to pay them for their time or work on the assumption that they'll be the listing agent when the time comes.

Consider getting an inspection done now to find out what will have to be fixed anyway when you sell.

We bought a house, fixed it up over 4 years with new floors, furnace, paint, etc, then sold it and broke even.

We worked off the inspection report from when we bought it, but things still came up on the repeat inspection four years later.

It's amazing how something you think would be a great selling feature doesn't mean much to other people at all.

Google "staging" for tips on showing your home to its best advantage. It's all about presentation.

Good luck!
posted by metaseeker at 12:00 AM on April 7