July 8, 2015

The Point of No Return

People spend their money on all kinds of things.  I see evidence of this when I go into various homes.  I've seen some bizarre things ranging from antique doll collections (they just stare at you... just stare) to a Coca Cola themed home to dozens of pictures of toads artfully arranged on a twenty foot wall to naked mannequins...

Frankly, the way you spend your money is nobody's business.  It's yours.  You've worked hard for it.  My opinion about money is that you should save/invest some, donate some, pay for the necessities, and the rest is for funsies.

People often ask me if I think doing "such-and-such" is a good investment for their home.  Well, if we're going textbook here, yes, there are some things that traditionally are good for resale:  updated kitchen and baths, flooring that's in good condition, landscaped yard, good windows and roof, stainless steel appliances, etc., etc.  YAWN.

And there are some obvious things that aren't good for resale:  a home that has not been maintained and cared for (water damage, paint, roof, windows, flooring), a home that is totally outdated, a home that smells or is haunted (see my past blogs).

Many home improvements benefit your lifestyle, not your investment portfolio.  There are some things you can do that will recoup a nice percentage of your money and others you do purely because you want it or like it.  On average, home improvements see a 60.6% return.  The best returns on investment (over $10,000) are siding replacement, deck/patio additions, window replacement, and minor kitchen remodels. (NAR 2013)

People often say that they "have $xxx,xxx invested in my home and want to get that back out of it."  If only it was that easy.  I've stopped counting how much money I've put into my home long ago.  I don't want to know.  There are very few people who will recoup dollar-for-dollar out of their home.  The market is such that homes just don't see that kind of appreciation anymore.  And that's OK.  After all, it is your sanctuary...the place where you spend most of your life, the place where memories are made and where your family lives, loves and grows.

So get that pool!  Paint that room bright purple!  Buy those $20,000 worth of new doorknobs!  If it makes you smile, then do it!  You can't live for what you think everyone else wants.  This home is YOURS, not the next owner's.

Enjoy your home.  Live in it for today, not tomorrow.  A talented Realtor (ahem) will help you prepare it to sell and will try get the most money out of it someday.  Go ahead.  Invest in that $20,000 worth of hardware, and let me deal with convincing the buyers that you have the best knobs in town.

Happy Spending,


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