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The housing market sucks. Really. The days of buying a house “as an investment” are pretty much over, though owning a house still offers some pretty big perks, from allowing you to pick your own appliances to leaving you free to blast Robyn at ear-bleed volume at 2 a.m. But I’ve heard some pretty strange conversations at the local big box lately. Those same folks who bought $500,000 houses on sub-$100,000 salaries a few years ago, you know, for “an investment?” They’re into remodeling now. And you should hear the cockamamie reasons they’ve dreamed up to buy more things they can’t afford.

The number one excuse I hear for home improvement extravagance is “improving resale value.” No, I’m not kidding. Even thirty seconds of Googling shows how bad an idea that can be. While buyers may love your granite countertops and huge pool, they’re not likely to shell out extra cash for it — especially in today’s market. The best article I found (from HGTV) touted 93% as the best return rate one can expect on home improvements. And those were more practical jobs like upgrading siding and minorly fixing up a crappy kitchen.

So despite HGTV’s multiple design-centric shows, they recommend something boring and sane: Fix your busted house first. Forget majestic bathrooms and bling’d out pools. Fix the damn leaky roof.

And let me offer a piece of advice, too: Don’t lie to yourself. If you want luxury items in your house, there’s nothing wrong with that. If a pool makes you happy — and you can make the payments — knock yourself out. Just don’t imagine that you’re “making an investment.” You’re not. You’re just buying cool crap. Stop BSing and enjoy it.

(Check out the Luxuo “Luxury Blog” for more pics of that palatial bathroom pictured above.)

Which Home Improvements Pay Off? [HGTV]

 

8 Responses to Home Improvement Sanity

  1. Joe says:

    I am pretty sure those numbers apply to contracting out all work. doing things yourself can probably yield better results. And some things do bring buyers in, so while the house may not sell for more, it could sell quicker.

  2. Fong says:

    @Joe, agreed about estimates being based on market costs and not sweat equity.

    For my DIY home improvements, my priorities are always to fix what’s broken, maintain what’s not, and only improve upon if I’m going to enjoy it myself without dwelling on “resale value”. Everything in moderation.

    Mini-rant: HGTV and more notoriously DIYnetwork seems to lack much DIY anymore. They deal with flamboyant design shows, real estate shows (which I’m convinced is sponsors by the National Association of Realtors) and Crasher shows…seriosly, why is Hollywood Hi-tech on DIYnetwork? Where’s the “DIY” part of that?
    End rant.

    • Joe says:

      I was watching Hollywood Hi-tech, and I agree there is no DIY. The crashees(sp?) at least do SOME of the work during the crash.

      Don’t forget that when they DO show people doing work, they skip every important step or they’re just doing it wrong (as far as I can tell from the show). Last night on rescue renovation I watched them put a knee wall up for plumbing on an exterior wall, and thought great, you did that to reduce penetrations in the vapor barrier and exterior insulation, as well as protect the pipes from freezing (they didn’t say any of this, they just talked about hiding some plumbing). Then they were putting the wall up, I didn’t see ANY vapor barrier being placed behind the wall, and they proceeded to cut a hole in another exterior wall for a recessed medicine cabinet (WTF?!?!) again without mention of insulation and vapor barrier. I just want Mike Holmes to go slap them.

    • jeff_williams says:

      Some of the DIY Network shows are still very much DIY. Sweat Equity for example. I had to tell Amy M what we were doing on shoot days so she could talk about it on camera.

  3. Simon says:

    A house is only an investment if you can not only sell it for more than you put into it but you have somewhere to live when you sell it. Most people keep buying up and thus they never gain anything until they go to the old folks home and sell it or die and leave something for the grandkids. My system is to be happy with what I have, maintain it and don’t worry at all about resale value. I LIVE in my house instead of acting like a speculator.

    Doing most of my own work helps too.

    Simon

  4. PutnamEco says:

    Re:
    Those same folks who bought $500,000 houses on sub-$100,000 salaries a few years ago, you know, for “an investment?”

    No, They have been foreclosed on, and the real investors are buying the “distressed” properties for dimes on the dollar,and what is even worse is Freddie, Fanny, and HUD homes that were foreclosed on are being auctioned off in lots so large that there are only a few billionaires investment groups that will even be able to think about purchasing them, of course if you do the math, they will get unreasonable low prices per house.

    http://www.thestreet.com/story/11224917/1/a-huge-housing-bargain–but-not-for-you.html

  5. Alf says:

    Your goal is to find a buyer who loves your place. I’ve watched how the right projects and the right furniture staging make a big difference. Thank God this isn’t a world that moves only on the word of experts and conventional wisdom.

  6. joe homeowner says:

    I love my house and I am going to fix the leaking roof next year. Thanks TM for all your support I know I can do it.

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