Housing Upgrades That Don't Pay

Before you dive into a major renovation project to give a house your special signature, consider how long you're likely to stay in the house.

A lot of people get into trouble by going into a home they're only going to be in for a relatively short period of time, and they start doing renovations and additions that are sort of on their fantasy list, but they're not going to be there long enough to really enjoy.

Here are four reasons to proceed with caution, particularly if you want to maximize your chances of a profitable resale later on.

1. High maintenance - If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install, secure, heat and clean.

2. Overdressed - Luxurious amenities can be a good selling point, but only if they blend in with rather than outshine what the neighbors have. Having the nicest home in the neighborhood can be a bad thing when it's time to sell. A prime example would be upgrading the kitchen in an entry leval home to reflect remodeling from high-end home magazines.

3. Too Personal - Making a "Cookie-Cutter House" in the image of your own exquisite taste. Any time you deviate, no matter what the improvement is, from what is a fairly traditional, single-family house, you run the risk of improving in a fashion that will not lend itself to additional dollars at re-sale time.

4. Unpopular - If no one else on the block has a room like the one you're adding, or all the other houses boast the very feature you're getting rid of, watch out. For example, although converting your garage into an office, bedroom or playroom can be a less expensive way to add square footage and create more living space, it can have drawbacks. Potential homebuyers might miss the sheltered parking more than they welcome the additional room, especially if other homes in the neighborhood have garages.

This final tip for whatever type of home renovation you may be considering: Before you do anything in a house, live in it for a while. Prioritize what needs to be done, then go back a year later and see how much your list has changed.

If you have comments or questions about this article on housing upgrades that don't pay, use the comment link below to sound off. Your privacy will be protected, as we never publish anyone's email address on this blog. We welcome your comments.

Gas Prices: Is the Worst Behind Us?

U.S. retail gasoline prices have fallen more than 10 cents per gallon in a week and could fall another 25 cents by the end of summer. Could this be a sign that the worst is over for U.S. motorists this vacation season?

The decline tracks a record pullback in the price of crude that has come amid mounting evidence high energy costs and an economic slowdown are shrinking American demand for fuel.

Despite the recent declines at the pump, gasoline prices remain more than $1 higher than last year at this time.

What do you think? Is the worst behind us at the pump, or is this just a temporary lull? Use the comment link below and tell us what you think.

Jobless Claims Highest in 6 Years

According to a recent Labor Department report, the nation's jobs market sent a fresh cry of distress as the number of newly laid-off people unexpectedly hit the highest level in more than six years. The AP's Ed Donohugh reports in this short video (runs :57)…

Do you think this latest jobs report truly reflects our nations' economy, or is this latest report just evidence that more people are looking for government help? We'd love to hear your opinion. Sound off by using the comment link below. Your identity is always protected when posting at our site. Your email address will never be published here.

Mortgage Points: Why Pay For Them?

If you are in the market for a home or considering refinancing your current mortgage, you probably have heard your mortgage professional talking about points. They may advise you to buy points or they may advise you not to, depending on your situation. The question is, do you really understand points and when it makes sense to buy points?

A point is 1% of the loan amount. So, one point on a $100,000 mortgage costs $1,000. Points can be purchased in increments down to an eight of a point. It's not any more complicated than that. When should you buy mortgage points?

The pros of doing this are really pretty easy to understand. By pre-paying your interest, you get a lower rate and therefore a lower payment for the life of your loan. The cons of buying points are that you must stay in the home for a certain period before you "break even" on the transaction.

For example, if you have a $200,000 mortgage and you buy two points, you will pay $4,000 for those points at closing. If buying the points lowers your payment $250 a month, you'll need to stay in your house at least 16 months to break even (16 × 250 = 4000). In this example, after 16 months you'll start making money. After several years, you'll save a lot of money.

One other thing to keep in mind about buying points up front: Points may be tax deductible, so there is an added benefit if you qualify for the tax deduction. Check with your tax advisor before you deduct points on your taxes.

If you have any questions or comments about points, just click the comment link below and sound off. We'll get back to you with answers to any questions you might have. We'd love to hear from you.

Real Estate Market: Will a New President Help?

Nearly half of all home buyers (44%) believe the housing market will improve once a new President takes office in January, 2009, according to a new survey conducted by Harris Interactive® and commissioned by Move, Inc., operator of Realtor.com®.

Forty-eight percent of women and 41 percent of men who plan to buy a home in the current market said they think the housing market will get better once the new President is in office.

According to the survey, 81% of home buyers are still nervous about the current housing market and report the existence of barriers between them and home ownership. Despite these reservations, the survey indicates underlying demand for homeownership is healthy. While nearly half (41%) of current homeowners do plan to purchase a home again, 80% of all renters plan to purchase a home someday with 47% planning to purchase a home within the next five years.

What do yo think? Do you think having a new President in office is what the real estate market needs to get back on track? Or do you think it won't really make any difference? We'd love to hear your comments. Click the comment link below and sound off on this question.