Renovate home or save money for another? Advice please!

[sassysophiebaby]

Background: My husband and his then fiance bought a 1300 square foot home for $99,000 at the height of the market. She left and we married a few years later. For personal reasons I have never like the house and we had plans to sell and buy another together, but my husband believed that you had to live in a house ten years before you could sell it and actually come out ahead. Then the market crashed and our house isn't worth hardly anything plus we now have two kids and the 1300 square foot house is bursting at the seams.

Question: To make the house a little more appealing is it wise to invest some money into it to make it more livable (we are thinking about enclosing the carport to give us a little more room) and appealing to us since we potentially will be living in this house another 10 years (we lived in it for 10 already). Or should we just hate the house we live in and save the money for a new house when we could potentially sell this one. My hesitation is that the area its in is not very nice. The houses are really just starter houses where people don't invest their money in them. I understand we would never ever get our money's worth out of the improvements but if I had to look at the blue vinyl floors in my kitchen for another 10 years I wanted to shoot myself in the head. We have no problem paying our mortgage and my husband makes triple what he was making when he first bought the house. The expensive improvements we are planning on doing is enclosing a carport to make it a four bedroom house and installing hardwood or laminate to replace the 15 year old dirty blue carpet that we currently have plus some landscaping because its something that I enjoy and the house had zero and I mean zero shrubs around the foundation. So should we renovate or save?

[NetSkyBlue]

Will the renovations you hope to make price the house out of the neighborhood? Nobody with the money to by a $250k house is going to want to buy into a neighborhood where all the other houses are $150k houses, for example.

If you are replacing something so ugly it would deter buyers, that's another story. Just don't spend outside the range you think a potential buyer would be willing to pay.

[BMEPhDinCO]

I understand your concern as we also live in a starter home but it wasn't up to our liking when we got it...

We replaced the flooring ourselves - it cost MUCH less and since it's still an "upgrade", it doesn't have to be perfect. You can get nicer artificial materials now for less than $1.00 a sqft or even tile for fairly cheap (we did the tile, it's a lot of work but looks great).

So in your situation, I would replace the flooring (DIY for under $500 or hire someone for under $1,000) and plant SOME landscaping (1-2 trees, a few brushes, keep it under $1,000).

I would NOT do the carport, I understand you want the room, but that would be the most expensive, plus people shopping around may want the original feature.

So if you can save up $2,000 by June, I'd do the floors and landscape then. At that point, start saving for your next house - if you can save $500 a month, you can move in less than 10 years and put 20% down on a nicer house...the more you save, the better!

In the meantime, maybe rearrange your furniture and get rid of clutter to make new space from what you have. A quick paint job ($50-100) can brighten up an older room too.

[Kooshiball]

I am wondering how much is the market value of the houses surrounding your neighborhood. If market value of the houses around your place (usually 1 mile radius) are much less than what you have owe to the bank then, it would be very difficult to sell (You have a choice to shortsale it but this will greatly affect your credit). If not, then as NetSkyBlue said, you should check what kind of housing improvement or size of the houses in your neighborhood because your potential buyers won't buy the more expensive house in the low priced neighborhood (Usually buyers do exact opposite. They buy the cheapest houses in the expensive neighborhood to seek potential appreciation of the house or good school district etc).

[sassysophiebaby]

The house next door and across the street were foreclosures which each sold below $40,000 and are now being rented out. I doubt that even if the market picked up it would sell for much more than $50,000 even with improvements. We tried to refinance for a lower interest rate about two years ago and it appraised for something like $60,000 which is a joke. No one in their right mind would pay that for this house not with much nicer larger houses going for a lot less. We have replaced the awful blue vinyl in the kitchen with ceramic tile and replaced the counter tops (I turned a hole in the laminate) with quartz which was on sale for less than $1000. Replaced the cheap kitchen sink and faucet and installed a glass mosaic tile back splash. So far we have probably spent under $3000 on the kitchen alone because we have done most of the work ourselves. I think we will continue to do small improvements to make the space larger and more comfortable for us while we wait for the market to improve. Our house will definitely be the nicest in the neighborhood and we will have to console ourselves with the fact that we will never recover the cost of the improvements.

[snafu]

Good on you for DIY improvements that updated the kitchen you despised. Forget about the old GF and make the place yours. If the house feels too small, you have too much stuff. Perhaps join the Declutter thread started by Disney Steve. This is a good time to go through your stuff shelf by shelf, drawer by drawer, closet by closet, cupboard by cupboard and room by room trashing anything expired, broken, stained, wrecked or too old. Sell or re-gift the stuff you no longer use or enjoy. Donate the stuff you've been keeping 'just-in-case.' Set limits on how much and how many. If you must, box the stuff you haven't used in more than a year for secondary storage [basement, carport], retrievable if necessary but let go if not used by fall. Don't agonize over the money spent, it's gone and holding stuff you don't use, love or enjoy just adds to your discontent.

It helps to instigate a 'new in - old out' rule so you are not overwhelming your square footage. I believe you would enjoy the rooms more by ripping out the nasty, old blue carpet and installing laminate. It is a relatively inexpensive DIY project easier to clean and adds value to a starter home. As others mentioned, fresh paint gives the biggest bang for the buck.

[GREENBACK]

The expensive improvements we are planning on doing is enclosing a carport to make it a four bedroom house and installing hardwood or laminate to replace the 15 year old dirty blue carpet that we currently have plus some landscaping because its something that I enjoy and the house had zero and I mean zero shrubs around the foundation. So should we renovate or save?

Sometimes these improvements can really change your opinion of your (home). I used the parentheses because a house is what you buy but a home is where you live. I've made major improvements to my home that I'll never get back but the place is so much better than when I bought it.

[Shewillbemine]

Don't ever hate the place you live in. It provides you with warmth, protection from the elements and a safe haven to call your own. Sometimes an adjustment in perspective can do wonders--you've lived there for a decade; you can't possibly hate it THAT much.

When I'm having a crappy day, I look at my two legs and thank God that I can walk.