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Could you rent out that place and buy or rent a bigger place for you guys? My husband and I just bought a bigger house b/c we have a baby coming soon and our townhouse just won't work. We would lose too much money if we sold, so we're going to be renting it out instead until the market gets better.
I think the best way to add value is to add an extra room. I don't think an extra bathroom and closet are going to add alot of value to the property.
@artbee: I could rent out my place once the renovations are complete (the kitchen is fully installed). My bf would have to sell his condo because his condo contains a restrictive covenant that only purchasers may live there.
How big is your house? How many bedrooms? Would you do the addition yourself? If it would raise the value of the house, and allow you to stay in it longer, it would probably be worth while. Most people want more than 1 bath these days anyhow so I dont see how you could lose by adding a bathroom. If you sold, would you buy a new place? The way I see it, you may "lose" money on selling your place, but whatever you buy next has come down in value also from the time you bought yours, so really if you buy/sel at the same time, and you're playing in the same market, it looks like you take a big loss on paper, but its sort of a wash.
@JoJo Bananas: thanks. I will research this. Whether we put an addition or not, I will have to find some way to add some closet space (like getting a carpenter to extend a wall and build one in) because there is literally NO closet space right now.
@jackndiane: How long are you planning to stay? If you are going to be leaving in 5 years anyway I don't think it makes sense to spend money on a renovation when you likely won't make that money back. If you plan to stay in this house a long time, I agree with @JoJo Bananas: that you should spend some more money and do a larger scale addition.
@pinkshoes: The house is about 1200 sq ft plus a finished basement. It is 3 bedrooms 1 bathroom. I don't think that you could do an addition yourself. I mean, you have to know how to lay a foundation and to do construction work. So, I do not think a DIY on this project would be wise. I guess I could try to look at it like a wash. Thanks
The big city bees are probably wondering how it could even be possible to have a house and two people not fit into it! No closets? Welcome to New England living! We have lots of dressers and cabinets to make up for it. Good luck finding an apartment or home that has more than one bathroom, too. Guess what - we share!
My point isn't to make you feel bad, but to point out that people happily live in 600 square feet together many places in this country. It requires inventive storage solutions and getting rid of all that crap you didn't need anyway. I'm going to assume that your house isn't as tiny as the apartment my husband and I have happily lived in for almost 3 years, mostly because I grew up in the south, and truly small homes (by big city standards) simply did not exist.
I would consult a local real estate agent. If the value of your house + the cost of the renovation is less than or in line with the comparable sales for similar homes in your area, then it could be worth considering.
For instance, if your house is a 2 bed, 1 bath and is valued at $175k, and the addition would cost $30k, you should be sure that a 3 bed, 2 bath in your area would sell for at least $205k.
Also, take into account how long you plan to live there with the renovation. Sometimes even if the dollars and cents don't make you a profit, the ability to live in a house you love and make it work for you is worth it.
@jackndiane: HAHAHAHAHAHA
Sorry.
I just read that your house is 1200 sq ft and you think there isn't enough room for the both of you. Hahahaha.
Do you know what that house would cost in Boston, if you could even find that kind of square footage without an hour's commute? $550,000+.
Needless to say, because of cost, most people live in way less than that. Go through your stuff, get rid of the crap you don't need. You'll be surprised at how much space you DON'T need.
@jackndiane: That sounds like a pretty good size! Your OP siad there was only one bathroom?? If there is already 2, and only 3 bedrooms, I dont think adding another bathroom is worth while. 3 bed/3 bath to me is over kill and I certainly would not pay extra for that. For that size house, an addition would not render a very good return imo.
@crayfish: I tend to agree with you. I do not think we need an addition. I do think we need at least added closet space built into the existing structure (if you saw the house I'm sure you would agree.) However, my bf is adamant about the addition. He thinks one bath will get really old really quickly.
@Moose1209: We are planning on staying about 3 more years
I really don't think you are going to recoup the cost of adding an additional bathroom and some storage if you already have a 3 bed/2 bath. If the two of you really have that much stuff, you could probably do a storage unit for years for cheaper. I also don't know about your area, but many people aren't sure real estate has bottomed out yet, so your home values could decrease further (of course, they could also go up!)
@bells: It is technically a 3 bedroom home, but one of the bedrooms is more like a study. However, it sells as a 3 bedroom and could easily be treated as such. All of the bedrooms are a good size (there are no really small rooms), but none of the existing bedrooms is large enough that you could add a walk in closet and bath to it. As I mentioned earlier, you could extend the wall and build closets (not walk in) into the existing master bedroom without an addition. However, adding another bath and/or a walk in would require an addition
oh it also depends on your neighborhood. Are you in a very nice area? Are you surrounded by larger houses? Or does your house fit in about the same as others?
@Sking: Thanks but it is a 3 bedroom, 1 bath house. Does this change your assessment or is your vote still "no addition?" I really do appreciate the input
Wait, one bath or two? I think there is a big difference between a 3 bed/1 bath and a 3 bed/2 bath. I would purchase the latter, the former - no.
@jackndiane: I would consider it then. I think CanAmBride has some great advice. Especially about it potentially being worth it for you guys for the next three years.
3 bdrms and 2 bathrooms in 1200 square feet, sounds big enough for a family of 4 if you ask me. You don't need to "add" a closet. Just have some built in wardrobes put in. A 3/3 will not get you anymore money than a 3/2. Adding and addition for a closet and a bathroom, to an older home, will actually drop the value usually.
@mwitter80: I think that I messed up early in this thread by saying it was 3 bedroom/ 2 bath. It is not a 3 bedroom/2 bath. There is only 1 bathroom. Also, qhile there are technically 3 bedrooms, one of the bedroom is much more like a study. Also, there is no closet space currently. A family of 4 could not live in the house comfortably. If there were closet space added, then a couple with a small child could live there, but that is about the house's limit currently. I just wanted to clarify. Thanks so much for your input
Growing up, there was 6 of us in a 2 bed/1 bath, maybe 1200 sf home. I cannot believe that 3 bed/1 bath would not be enough for 2! I would not sink any money into the house unless it would make you money - 10k renovation could get you 15k+ in resale value type deal, and you can never guarentee that. I wouldn't do it. *esp* if the 3rd bedroom isnt very large, and the house isnt geared toward a larger family.
@jackndiane:P.S. Don't feel bad about wanting more space. DH and I both owned our own homes before we moved in together and were very used to spreading out. We now live in a 4 bed, 4 bathroom, 2,000 sq ft house and were just talking about how when we have kids, we will probably need a bigger place. We don't even have a lot of stuff. We just like having a dedicated office, work-out room, guest room, and master bedroom. Everyone is willing to pay for the house that fits their own lifestyle. If DH and I wanted to live in the city, we would settle for a smaller place. But we want space, so we live in the suburbs!
For the time being, could you use one of the extra bedrooms as "storage" or a really big closet? I have a girlfriend that has a ton of extra clothes and uses her second room in her apartment as one gigantic walk-in closet.
Also, have you thought about putting the extra bathroom in the basement? I know it wouldn't be super convenient, but it would still serve as an extra bathroom in case you and your bf both needed to shower at the same time or something. I always think that having a bathroom in the basement is a plus. Plus, you wouldn't have to add an addition this way.
Just some thoughts...
Good luck!
Ok then understood. Add the second bathroom. You will get your return on it. If you can create a master suite, that will get you the biggest bang for your buck.
We live in Chicago so I'm sort of on the same side as Crayfish here. My husband and I lived in a 1.5 bedroom / 1 bath apt that was barely 800 sq ft for 3 years- to me 1,200 sq ft sound luxurious! You might need to get a little more creative with storage and that kind of stuff but it's definitely feasible without adding an addition. If you have 2 other bedrooms, get some wardrobes from Ikea and make one of them a really big walk-in closet. There's not much you can do about the 1 bathroom but you know- sometimes you just have to suck it up. The only reason we were able to just buy a house in the suburbs is because we lived in our tiny place and made sacrifices. In the long run, it will be worth it.
I don't recall the rules of the homebuyer tax credit exactly, but I think if you move within five years, or don't treat the home as your primary residence, you have to pay back the $8k. Definitely something to consider in the cost recovery category, you're keeping that $8k to stay in your home.
And for what it's worth, adding a bathroom to a 3 bedroom home probably will increase the value in the future. I would absolutely buy a 3 bed/2 bath home, but I would probably not consider a 3 bed/1 bath, at least for me and DH.
@CanAmBride: Thanks for the understanding. Also, I really like your idea about looking at comps for 2 bathroom, 3 bedroom (not true 3 bedroom but technical 3 bedrooms like I have) homes.
What style is the house? How are your building codes where you live? I honestly have never heard of someone ever adding just a bathroom/closet addition without adding a bedroom. If I had to go that far, that's what I'd do.
In today's market,tho, I wouldn't do anything that isn't strictly cosmetic. Home values/equity are now as low as they were during WWII.......people are losing a ton of money, and its not likely to go up much in the foreseeable future.
@animalcrackers: Yes, I thought of this. The homebuyer's credit requires that it be your residence for 3 years. I have already lived there 1.5 years. I think I could easily live there 1.5 years more with no addition and sell. I'm just not sure if the market would turn around enough in that time to not take a huge loss
I understand wanting more space, as I wish for more space as well (and I have more than you) :)
I just put in a new bathtub, double vanity, toilet, and light fixtures and material costs were about $4500 and plumbing (a few things had to be moved slightly, but just a few feet) cost another $5000. If you added in the cost of building a new roof, pouring foundation, wood, tile, electrical etc I think it would cost at least $25,000-$35,000 (and that is probably low).
However, if your house is currently worth $175,000 would adding a bathroom and closet bring the value in today's market to above $210,000? I don't think it would as you are adding minimal square footage and while a second bathroom is a great selling feature, it isn't enough to overcome whatever the local value per square foot.
I would buy some ikea warddrobe closets and hold tight for a couple years. Better to save the $30,000 and use it on a deposit for a larger house that you would both want to stay in long term! :)
Be careful what you do with the house. Depending on which level of the homebuyer's credit you received, you might have to pay back the entire amount if you rent it our or sell the house. ETA: Ah, saw you already knew that.
I don't think that selling the house now and waiting to sell it later will cause a bigger loss so it might be worth staying the way it is for a few more years. I don't think housing prices will drop much more so there isn't really a downside there. I wouldn't be renovating it a lot though since you will probably not get that money back if you tried to sell soon.
@canuckbee: thanks for the understanding. I agree with you that it is a risky proposition. The more input I get the more I think I will just make smaller cosmetic improvements
No problem, happy to help! My fiance and I have done a fair bit of "improvements" around our house and now we are considering the fact that we want something bigger and well, just different and I'm realizing that we won't be getting our many back from some of the improvements (mainly the bathroom reno that I mentioned).
If you sell in a year and half then you shouldn't worry too much about losing a few thousand, as in the long term you'll save the same amount on the next house that will still be down in price as well (at least that is my logic).
Me and DH live in a three bedroom one bath and we are thinking of turning one of the adjoining rooms into a master suite we also dont have closets lol I've never not had a closet but it's livable especially with the extra rooms to use as storage I think one renovation is worth it at a time and id go with second bath ... With 2 other rooms space for clothes and such wouldn't be my main concern plus you can always track down an armoire like the old schoolers had. :) hope this helps
From what I've gathered, you have:
1200 sq ft + a finished basement. 3 bedrooms & 1 bathroom and in today's market it's already valued slightly lower than what you bought it, PLUS you already put in $9500 in renovations and you only plan to stay for 3-yrs.
Don't do it. Get the current sale prices of comparable homes in the area and print it out, add your current expeses, plus finished renovations and the expected cost of further renovations and sit your bf down so he can understand. You would be throwing money out the window if you expect to re-coop all the money you put into it after just 3-years!
My advice:
Convert the basement and/or one of the bedrooms as closet space. Live with one bathroom for 3-yrs. If anything, you can look forward to getting a new place by then.
If the raw numbers doesn't convince your bf, then don't forget to add exactly how much you'd lose and ask if that amount is worth having to share a bathroom for 3-yrs.
Good luck to you!
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My boyfirend may be moving into my home in the next year (we will be getting engaged). I purchased the home approximately a year and a half ago for 185k and I got the home buyer's credit of 8k. The values of property have gone down slighty and now the house would probably go for 180k or 175k without any renovations. I have already put money into the home- I have renovated the entire kitchen myself (about 6k) and I have had the outside painted and the floors refinished (about 3.5k). The problem is this: the home is not big enough for me and my bf to live in as is. There is only one bathroom and there is no closet space. My boyfriend and I are considering putting on an addition (another bathroom and a small walk in closet) but I am worried we will lose major money if we do this. However, I also worry that we will lose money if we sell the home now. My bf is already going to probably take a loss when he sells his condo so we can move in together. Help! I need advice!