5 Smart Upgrades for Underwater Homes

Monday, March 19, 2012

With a few improvements, your current home can be your dream home, EVEN if it’s underwater.

When a home is no longer a fit, the natural reaction is to move on
and find a home that better suits your needs. But sometimes, staying put is
best. This notion even applies to homeowners who are upside down on their
current mortgages: they owe more than the place is worth. Sitting tight, even
in an underwater home, doesn’t mean you have to make do with a house that no
longer suits you. And we’re not saying you should upgrade with every gadget and
doodad known to man, but there are a handful of improvements that make sense,
even for homeowners facing negative equity. Here are five upgrades that might
have an upside for your lifestyle or your bottom line. (Source: Trulia)

 

REMODELING YOUR HOME AND NEED A REFERRAL?

CALL ROB ZIMINSKAS, OWNER OF BROKEN
HOME REMODELING

(214)293-3770 * www.BrokenHomeRemodeling.com

 

 

 

In Staying Put: Remodel Your House to Get the Home You Want, architect Duo
Dickinson
gives new meaning to the term ‘housebound.’ He uses the term to refer to
homeowners who have decided to stay put instead of moving up to a larger home,
including those who made that decision because they are upside down on their
mortgages: they owe more than the place is worth. The premise of Dickinson’s
book is something I’ve long believed myself: that staying in even an underwater
home can be a smart move – and it doesn’t have to involve making do with a home
that no longer works for your needs. Blinging out an upside down home with
every gadget and doodad known to man can constitute throwing good money after
bad, but there are a handful of upgrades that might make sense for homeowners
facing negative equity. For the most part, sensible upgrades to upside-down
homes can all be described as things that either:

  • make life in the place much more comfortable for the long term – alleviating the want or need to move
  • boost the home’s sagging value or saleability for a relatively small investment,
     and/or
  • begin saving the homeowners money – or even earn tax credits – immediately.

Here are five upgrades that might have upside for your lifestyle or bottom line, if
you own an underwater home:

 
1. Cosmetics that boost curb appeal.
When your home is mired in negative
equity, chances are good that you might have been investing your dollars and
cents into keeping your head above water and the property in sound functioning
condition – not necessarily keeping the exterior at its most pristine. But if
you are looking to boost your home’s value to hit an appraisal mark for
refinancing, or even just trying to lure in a buyer to purchase the place as a
short sale, primping your home’s exterior cosmetics can be a smart investment.
Keep costs down by doing it yourself, or even hiring a reputable handyman to
tackle small, but impactful tasks like:

  • painting the shutters, eaves, doors and other trims – if you can paint the whole  house, great – but if you can’t afford all that, painting the trims and
    accents can make a massive visual difference in the look and feel of your
     home, very inexpensively;
  • adding fresh, new hardware like a mailbox, house numbers, and a front door or
     door knockers and kick plates; and
  • landscaping – planting lush or fragrant flowers or trees, trimming up overgrown shrubs and even installing low maintenance ground cover can also transform the entire look of your home from the curb.

And while curb appeal is priority number one if you are trying to get your home sold, interior design projects of a similarly small scale can also create massive benefits for your emotions and comfort level for the buck if you’re planning to stay put for the long haul.
It’s amazing what a basic paint job in your bedroom, opening (or ditching) your
window coverings or installing lighting or shelves can do to make your family
happier at home!

2. Economical expansion.
If you crave more space and your home can be expanded within its existing
footprint, consider an economical expansion – having a professional convert
your garage or basement into a rental or mother-in-law type unit can be an
especially good investment if you can house more family members or bring in
some income within the new living space. In a similar vein, consider adding a
prefab unit in your large backyard or even building on additional square
footage, if you can afford it and truly need the space. Before you do, though,
make sure you get permits and check in with your local real estate pro to be
sure that you’re not just overimproving the place vis-a-vis the neighborhood,
digging your negative equity hole beyond your financial or emotional tolerance
level or even an extended timeline you might have in mind for selling the
place.

3. Greening it up.
Upgrades that improve your home’s energy efficiency have inherent value in
terms of scoring you points as a good citizen of the planet. But they can also
improve your day-to-day living comfort – and decrease your utility bills.
Buying solar panels can eliminate your electric bill entirely with an upfront
investment; leasing the panels can cost you nothing upfront and keep your
energy bills fixed for as long as 20 years! And on my own personal home
improvement wish list is a tankless water heater – they eliminate the need to
pay to keep that big old tank of water hot, and they produce endless hot water
– no matter how many showers you take. Endless hot water! (As a side benefit,
if you happen to live in earthquake country like I do, you don’t have to worry
about strapping the tank or checking to make sure it’s still secure after every
tremor or aftershock.)

In many states, green home improvements like these and dual-paned windows,
adding insulation or installing efficient heating and cooling appliances might
qualify you for tax credits; check with a local tax pro to see what tax
advantages you might earn by going green at home.

4. Combining quarters.
A home improvement show would be nothing without someone pointing out how
gloriously spacious the kitchen/dining room, master bedroom or even two
smallest bedrooms could be if they could just (say it with me, folks): “knock
out this wall.” If you’ve uttered those very words about your own home, consult
with a contractor – many interior walls are relatively easy and inexpensive to
remove, even if you might need to leave in and finish off a support beam if the
wall does turn out to be load bearing. I know it’s anathema to some agents to
even think about combining two bedrooms into one; for resale purposes the rule
of thumb is the more bedrooms, the better. But, here’s the deal: (a) two
teeny-tiny, unusable bedrooms are not better than one, in the eyes of most
homebuyers, and (b) most walls that are easily taken down can be equally easily
put back up when it’s time to sell. If you’ve decided to stay put in your
underwater home for the next 10, 20 or even 30 years, there’s no reason resale
considerations should stop you from taking down a wall that is preventing you
from fully enjoying your home.

5. Built-ins that make things work.
Built-in work and storage spaces in your office, garage, craft rooms, kitchen
and even otherwise unusable nooks and crannies are uber-useful and can give you
the feel of a highly customized luxury home without moving – and without
spending much cash. (And window seats? Don’t get me started – who doesn’t love
a window seat?!)Similarly, functional furniture like loft beds, Murphy beds,
pot racks, pantries and armoires can create a highly customized feel and
convenient lifestyle, but you can move them around the house – or even take
them with you whenever you do decide to move! Investing to improve a
home that is upside down should be done very carefully, and only once you have
your personal endgame firmly in mind. The budget you set to spruce up a home
you need to divest of via a short sell might be vastly different from the
investment you’re willing to make to enlarge a home you plan to house your
family in for the next 20 years. So be intentional: get clear on your finances
and your future plans for your family and career before you start spending on
home improvements in this market climate. Then, you’ll be in a position to
create a regret-free home improvement plan.

REMODELING YOUR HOME AND NEED A REFERRAL?

CALL ROB ZIMINSKAS, OWNER OF BROKEN
HOME REMODELING

(214)293-3770
* www.BrokenHomeRemodeling.com

 

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