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01-21-2013 05:31 PM - edited 01-21-2013 05:33 PM
I wanted to gather some opinions/thoughts on how much effort to put into updating my townhouse.
I have a 3bd/2.5ba townhouse in Gaithersburg, and the property was built in the 1980s. It's in decent condition meaning nothing is broken and it's livable in the current condition. However, the bathrooms and kitchen have not been updated since it was built, and I need to have some landscaping done. The laminate floors in the kitchen are starting to peel/shrink from the wall.
I am just not sure how much money to put into this house in 2013, if I am considering renting or selling in June 2013 or 2014?
I'm already underwater ($10,500) based on the latest zillow estimate and my current mortgage balance; and in total, based on the original sale price that number increases to ($23,500). I estimate the kitchen and bathroom remodels would cost $28K (I'm going to do the landscaping work regardless).
Is it really worth making these updates?
Should I make all the updates or just one set more than the other?
If I make the updates should I consider renting or selling?
Do the types of updates change if I am considering renting or selling?
**As a side note, even though I'm a disgruntled homeowner due to the evil realtors and home inspector who were just out to fleece buyers, I did figure out that I still am making a savings due to the tax implication of homeownership. I just wished it was in a house that I really liked so renting or selling would not be a consideration, and I was really building equity.
01-22-2013 05:11 AM
Personally, not professionally, I think it depends on what money you have available if you sell or not.
As far as updates, remember that curb appeal and first impressions last. I would do what looks good cosmetically to land a buyer or renter and then worry about other things when an inspection comes along.
repaint some areas and replace the vinyl in my opinion......
I would not update the kitchen/bath's unless it makes sense to you.....
01-22-2013 05:40 AM
It all depends. I know it isn't the answer you want to hear, but you need to compare your home to others like it near you. If all the other town homes on the market have renovated bathrooms at lets say $300,000, and your bathrooms are not up to date. Then you may have to discount the property to $275,000 or less. On the other hand, if the comparable townhomes have not renovated the bathrooms, then you could list for $300,000 as they would be similar to what is selling in your neighborhood.
If you want to best answer, talk to a real estate agent, bring them through the home. They will point out the positives and negatives about the house, and what needs to be done. I wound up renovating all of my bathrooms, because all the other homes in my subdivision had new bathrooms. I am finishing that up now, before I list in a couple weeks. Good luck either way you go, make sure you get a realtor who has experience in short sales, unless you are going to bring the difference in cash to the table.
01-22-2013 08:53 PM
My recommendation is to rent until a combination of price increases and the mortgage getting paid down helps you build enough equity to net at least the money you've invested back to you. Make basic repairs like replacing the aging vynil floor. If you are handy and can lay tile do that, if not than replace it with a new vynil floor which is nuetral and decent looking but is also minimally expensive. Repaint if you need to, don't if you don't. Same with the carpets, have them cleaned if thats enough than don't do more. There is no sense in digging yourself into a deeper hole and also no sense to sell a place at a loss in a market which is increasing.
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01-22-2013 11:48 PM - edited 01-22-2013 11:50 PM
Good points from everyone. I took a look at the property history, and I honestly do not think it will reach what I paid for it unless another real estate bubble hits. Accordinngly, I'll take your advice and find a realtor to advise on needed updates for this year and see what the market (rental and re-sale) looks like next year. Thanks all!
01-23-2013 12:04 PM
FWIW, doing serious updates to most townhouses to enhance sales value can be a net negative. This is especially true in neighborhoods like what you are describing where most of the buyers will be placing a premium on affordability and many will be first-time inexperienced shoppers.
Agree with other posters regarding the cheap fixes that you can do yourself. Painting bedrooms and touching up paint in larger rooms are very easy and quick projects. Removing relatively new wallpaper is also a lot easier and faster than most people think. Paint the front door and replacing the hardware (if necessary). Same goes for interior doors. Clean the windows and consider removing curtains. Install new faucets in the bathrooms and kitchen (easy do-it-yourself job) that can enhance the room. You can buy pretty much all of these supplies very cheaply from Costco and Walmart. Planting a few cheapo temporary flowers from Walmart in the front of the house for curb appeal will run you about $20-30. Laminate stickers in the kitchen can look very nice. I have heard that laminated wood floors are also easy to install (snap together), but require some power tools that you can probably rent from HD or Lowes. Using a rented powerwasher (or buying one for a couple hundred bucks) to clean concrete driveways, walkways, and patios is also simple enough.
Try to list in April or May.
01-23-2013 01:23 PM - edited 01-23-2013 01:31 PM
Look where you are.. in Gaith. If you're renting, consider putting NOTHING into it. It will "never be vacant" being that tenants will be lined up due the savings that you pass along from the opt-out remodel costs...Plus, you'll be less stressed given that you'll care less about keeping the place "pristine"...