Sunday, November 16, 2014
Your perfect house - perfect investment?
I went to a very promising estate sale in my neighborhood. All the houses around are on a smaller side. Around 1500 sft, with a small frond yard and minimal back yard. Quite cute place. As we were turning the street there it was - a huge house directly out of Real Housewives of New Jersey show. It is a beautiful house no doubts about it, but at the same time it looks as if someone has phtoshopped it in. Does not fit with the neighborhood as all. There is no doubt that this was lots of money to have this house build. Gorgeous house but wrong street. It got me thinking - it must have been a huge investment. The one that you will most likely loose money on. Even if the house is beyond fabulous I cannot see how anyone will pay it's true worth when every house around is around $100K. This got me thinking - where is the line between making your house truly yours and what your street can take?
Owning a house is a dream come true for many girls. When finally the house lands on your hands it is the very exciting. When I got mine it was a dream come true. It is very tempting to start to customize it just for me. Luckily I must say there was not enough of funds to start doing all I wanted to. There are things we want to do and there is a reality of what makes sense doing. Investing money into my little place makes sense only up to meeting the price of $100K. Naturally, I would like to have the closet of the stars, my shoes displayed properly and a king sized bedroom. Who wouldn't? However, I need to be financially savvy here, if I did all of this then my house value would increase but it would never go above certain level. Most likely less then I have put in. Unless you have your house paid for it doesn't make best sense. It seems that getting an average of the houses on your street and going with you budget until that number, makes most sense. Especially if you think you'll be selling sometime in a future. Maybe a engagement or a baby may make you want to upgrade. Hey, you never know.
After doing all the calculations it looks like my renovations should not go above $13'000. Will it get me a closet of starts? Probably no, but at least I will not loose money on sale. Hey you never know, I may get engaged or buy a dog :)