When mucking around in the list of home improvement projects (mine is usually long), I find myself weighing “smart-living” versus “smart-investing.” While I consider what to do first, I get stuck in a circular logic that leads me to do nothing at all.
Finish the third floor to create a bedroom/office with life-altering storage space? Yes. Great idea. Except that it makes the most sense to move the basic sink and toilet from the powder room up to that space as no one will see it but family (and mostly children.) This, of course, means an upgrade of the replacement fixtures on the first floor. The powder room could use a spiff, but it’s very low on the priority list. But the third floor will need a sink, so…
When talking to a friend about this conundrum, I could barely finish my (rambling) story when he looked solemnly across the table. Leaning forward and lowering his voice he said, “We need to talk about the kitchen.” It was as if I had a horrible addiction, and he had been waiting for me to open the door so he could intervene.
I agree that the kitchen needs freshening. Agree with whom? With many of my friends and my very smart real-estate agent who sold me the house. Three years ago as we waited for the inspector to finish (here’s the good news: my 100+ year-old-house is beautifully built), she leaned against the counter and said, “The kitchen and upstairs bathroom are going to have to be updated before you sell this house. You might as well do it now and enjoy it.”
(We can’t even discuss the upstairs bath right now because while it does need attention, that project is small enough that I may be able to do it myself. Except for the electricity. I don’t mess with electricity.)
When I asked her what she thought about finishing the third floor and putting another bathroom up there so that we would have four bedrooms and two baths up, she said, “If you’re going to add another bathroom to this house, it better be the master.”
Right. The master. The master bedroom and the other two bedrooms on the second floor share a hall bath. There is a porch off the master with access to plumbing and stack, but as I peek out the window at it and see the finished master bathroom in my mind it looks very … expensive.
Ultimately, the thing that trips me up is that while the third floor would create space that would make my family’s lives easier, it may not be the highest return on my investment. The other projects, kitchen and baths, would undoubtedly add value (and sex appeal), but they don’t solve the issues of our domestic dysfunction.
And it’s here that I become frozen. Afraid to make a mistake, I do nothing. Which is a bit of a problem for me on two levels. One, while any of these projects will enhance the value of the house one way or another, I’m not getting anything completed. And, two, if there’s an underlying message to this column it is do something. So my becoming immobilized by the fear of making a mistake makes me a hypocrite. A fraud. A phony. We simply can’t have that.
I do think that information is power. The best way to determine how to invest money in your home is to do the research. Once you have all the figures in front of you it is easier to determine where you will invest.
The Pros Know
The best way to determine the value of your home is to talk to a real-estate agent. These men and women are on the front lines, and they can tell you how the market is trending and what improvements will be the smartest investments for optimizing resale.
Contacting a contractor or individual service people and gathering material cost estimates in advance will help you both determine a reasonable budget and let you know if your dream kitchen (or bath or basement) is a possibility.
I really believe that you should make your home what you want it to be. But. You need to be aware that if you spend a small fortune putting a spiral staircase from the family room to your newly constructed state-of-the-art wine cellar, you might not get your money back from it. At this point, you’ll have to determine risk and reward. Will it bring you unparalleled joy as long as you live in the house to the point that you’re willing to take a wash? Then I say, “Cheers.” But be smart and know what you’re getting into.
Know Your Hood
Most homeowners have a pretty good idea how homes are selling in their neighborhood. We see the signs and we chat with our neighbors. (Yes, you person-who-just-put-a-sign-in-your-yard, we’re talking about what we think you bought it for, what you’ve done to it and the price point at which it’s listed. And you know we are, because you do it, too.) But another good resource is the internet. Sites like Zillow, Trulia and Redfin can be good places to start to get some standard sales history and determine what is driving sales.