5 Things to Consider Before Renovating an Underwater NJ Real Estate Home

What to think about before undertaking the costly job of renovating an underwater piece of NJ real estate

 

In the event that your NJ real estate home is worth less than what you owe on it and you need to sell it, the best solution is to fix it up instead of bailing out on it and moving away. Although pumping more money into an underwater home may seem crazy, in some situations a few thousand dollars extra spent to liven up an outdated kitchen or dingy bathroom could make the difference between a home that sells and one that remains on the market for months and months. There is no general answer to solve all problems when it comes time to make the decision of whether to put more money into an underwater home or to simply cut your losses. This answer might be dependent on the location of the home as well as how far underwater it is. Below you will find some factors to consider in the decision-making process.

How Much is the NJ Real Estate Home Underwater?

One good indication of this is how much home prices in your market have fallen from their peak. In some markets, prices have dipped but are still not far off from what they were before the market turned.

Evaluate the Current Market Conditions

Some markets are fix-up markets, such as high-priced urban markets flooded with older homes in need of work. For those buyers already experiencing difficulty when purchasing an older home, a bathroom or kitchen in need of renovation could put their finances over the top. For homeowners, spending a thousand dollars or so on some modest renovations could bring in a better offer and a buyer faster.

Are You in a Price-Is-Everything Market?

In a market with a surplus of older homes, renovations are valued. According to NJ real estate experts, instead of putting an additional $25,000 into your home, drop your price by that amount to see results when the time comes to put your home on the market.

Do Moderately Simple Home Improvements

There is a difference between putting a little work into your NJ real estate home and drastically altering its appearance. At some point, you need to be prepared to draw the line between what is practical and what is not. For example, in an outdated kitchen, you could consider refacing and repainting the cabinets and putting in new countertops instead of going over the top with granite counters and brand new cabinetry.

What is Your Financial Condition?

In the event you are in a market where prices are off 20% but you plan to stay in your house for the next decade or two, you could certainly consider making drastic improvements to your NJ real estate home. However, if you are falling behind on your mortgage and trying to short sell your home, you should keep your investment limited to the sweat-equity type.

 

The real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information on NJ real estate, call us today or click here to be connected with one of our top real estate specialists.