Ride Out the Housing Slump with Smart Upgrades

Filed under: General, Lending, Young Adults, Adults, Retirees

Do you have visions of "SOLD" signs dancing in your head? If your house has been lingering on the market for awhile or if you're planning to list your property soon - options are available. Consider upgrading your home to make it more comfortable for you now and more appealing to buyers down the road.

Best Upgrades for the Dollar

Each year, Remodeling magazine releases the "Cost vs. Value Report," which summarizes remodels and upgrades that offer the highest return on investment as rated by the nation's Realtors®. For 2007, exterior and replacement projects topped the national averages with recovery rates over 80% including upscale siding replacement (88%), wood deck addition (85%) and wood window replacement (81%). Minor kitchen remodels also scored high with an 83% return.*

Results are also broken down by region, so you can see that a minor kitchen remodel in Des Moines might not fetch as much as a similar upgrade in San Francisco. Check out your region's highlights at www.costvsvalue.com before you call the contractor.**

Upgrade and Stay a While

Some people put their homes on the market due to a change in their family or living situation. In a tough market, it might make sense to remodel your existing home to fit your new lifestyle and stay put.

Empty Nester? If your kids have flown the coop, it might be time to move from kid-friendly to adult-focused. Consider reconfiguring your living space for pampering by upgrading to a four-star chef's kitchen (78.1% return) or building the master suite of your dreams (69% return). Ditch the old swing set, and turn your backyard into a personal oasis.

Growing Family? Perhaps an addition makes sense. The Remodeling report shows an average return of 73.9% for two-story additions - so you might be able to stay in the neighborhood you know and love, with enough room for baby and more.

Going Green? If you're looking for greener living quarters, you're in luck. You can upgrade paint, carpet, wood flooring, toilets, appliances and more with eco-friendly products - often for less money than conventional materials and fixtures. Breathe easy, because going green can improve indoor air quality and help save on your utilities.

Upgrade to a Win-Win Situation

If you're in a position to ride out the tight housing market conditions today, ponder a remodeling project or two. Your upgrades can provide for a better life now and give you an edge and a bigger return when the time is right to sell.

Finance with Your Home's Equity

If you've decided to stay in your current home while the housing market settles - and an upgrade makes sense - consider tapping into your home's equity to finance your projects. Home equity loans can work well if you're looking at a large one-time expense. You borrow one lump sum, and then pay the loan back over a set period of time. If you're looking to take on a variety of projects, consider drawing on a home equity line of credit for revolving expenses.

Using your home's equity to finance your upgrade is smart financially, too. Competitive interest rates and tax advantages give home equity loans and lines of credit an edge over credit cards and personal loans.***

* Estimated figures based on resale value in current market.

** Web site provided for information only.  No endorsement is implied.

*** Consult your tax advisor.

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