would you spend 200k upgrade on a 630k house?
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Anonymous
| or would it be better to sell this house and buy another house? 200k includes typical stuff - kitchen, bathroom, basement...etc. |
Anonymous
| Depends on the current value of the house versus the neighborhood. I could put about $100k into my current house and still expect to recoup a lot if we had to sell - houses are going for so much more than we paid even 5 years ago. If I put $200k in it would be with the understanding that my home would be a bit overvalued for the average buyer. |
Anonymous
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200K is high for the kitchen and bathroom and basement. So, no, not for that.
Over the course of fifteen years we might have put 200K total but that was for new roof & solar panels, new hvac, new flooring, new paint everywhere, re-finishing flooring, new bathroom, new kitchen, screen porch, new windows and doors. And actually, now that I add it up, on all of that we spent maybe 85K. So 200K for three items on that list? No. |
Anonymous
| Depends on the neighborhood. If my house was one of the lowest-value houses and after the reno my house would be in line with other homes in the neighborhood, I’d do it. I wouldn’t do it if my house would then be wildly higher than the other homes. |
Anonymous
| We just made almost this exact decision (after I made probably too many posts about it here). We were contemplating a 150K addition/renovation vs. move. We decided to move. Still haven't closed on the sale or purchase yet, but not regretting the decision so far! |
Anonymous
| Looking at your home as an investment is generally a bad strategy. That said, you obviously do not want to throw money away either. A reasonable expectation for a return on investment for the types of home renovations you mention would be 80-90% if you pay someone to do the work. In other words, you would be spending 200k to add 160-180k in value. From an investment vantage, you are throwing 20-40k away. Of course if it is renovate or move, you need to factor in closing and moving costs, as well as anything else associated with a new home. If you want to keep falling down the rabbit whole, then you need to factor in the costs associated with living through a renovation and/or potentially moving neighborhoods. |
Anonymous
Nobody can tell you this. You have to do some math and determine how much you love your neighborhood and current location and how long you plan to live there. |
Anonymous
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Thank you all. Interesting perspectives. To answer some of the questions, our home is probably mid to slightly lower end of homes around here. We set aside 200k for "upgrades" but we have not received an estimate yet. We don't plan to move though. We liked the house and it has served us well over the years but, nevertheless, it's almost 30 years old and can use some updates. And, yes, even if i put in 200k, i realize my house will not sell for 830k. Thanks all.
- op |
Anonymous
| Depends on how much you want to stay in your neighborhood. We love our neighborhood and want to be comfortable in our home so we have no plans to move. If your house is just an investment and you are not involved in the community, the answer is different. Moving is also so much work! |
Anonymous
| Depends on your neighborhood comps and whether you can get what you want elsewhere for the same money. We bought for 700K a decade ago, been trying to decide whether to do a $300K addition/whole house renovation. A smaller house than what we would end up with just hit the market for $1.3M around the corner, and was under contract in 2 days. So obviously it's a good financial move for us to do an addition, but we are still weighing the cost to our quality of life for the construction part. |
Anonymous
| We went through the same thought process at very similar price points. In the end it came down to looking around to see what would make us move. That level ended up being ~$1.3M. I'm not saying that our $675k house was better than a $1M house, it is just that we wouldn't have left our location and neighbors for a moderate upgrade. So, we are putting >$200k into our place to do some significant bathroom/kitchen renovations. Little hesitation in the decision in the end. |
Anonymous
NP - the PP's calculations are similar to ours. We're spending $350k on a big renovation/addition. The end result will definitely not be as nice a house as I'd like, but it will be nicer than anything I could buy in my general vicinity/school zone with the equivalent amount of additional investment. To get a larger, renovated house in my area was probably $600k+ what our current house costs. |
Anonymous
| We wrestled with the same decision 2 years ago, and that's when I started reading the real estate forum and this one daily. We looked for several months and realized we could not find a house that makes moving worth it. So we ended up renovating ours and it has been a major pain, but the end results are worth it. Our house is slightly higher priced than similar sized houses in our neighborhood, but we got what we really wanted, which was a screened porch. And we are not moving anytime soon, so it's worth it for us. |
Anonymous
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I would,
Moving is expensive. You have to budget atleast 20K between real estate fees and fixing up the house to be sold. Then fixing up the next house is another 5. That's 25-30 K gone. Additionally, there is no way the new house would have all that I would get if I designed the renovation myself. So that's another 25-30K of value to me, personally. Add these up and you have 50-60K lost in the move. The way I look at it, I am losing about 50K by moving. If I spend 200K to gain about 100K in resale value, I have really lost only 50K (100-50K cost to move). I love my location, and my land is very flat, so a 50K loss is not that bad. |
Anonymous
You are underestimating moving "costs". If I could solve or close to solve my issues with my current house in place, I would have in a heartbeat. |