How Much It Costs to Keep Up with the Joneses

Jealous of your neighbors' new master bath? Who wouldn't be? It's got heated floors, a sauna, and a massive whirlpool tub. To be honest, your own bathroom looks like the shower station at the public pool in comparison. And you have been thinking about renovating it. Maybe a sauna isn't such a bad idea after all. And how about one of those new tube lights? Yeah, that'd be cool.

Actually, doing the opposite — resisting the urge to keep up with the Joneses makes you the smarter neighbor. Just ask Michael Kelczewski, a REALTOR® in New Hope, Pa. His client added a spa with a downtown view to his Philadelphia home, which was way out of sync with his urban neighborhood. That made the home difficult to sell.

"He liked to sit in the tub with his Belgian ale and look over the city while it was snowing," Kelczewski says. "But the feature decreased the home's value significantly. The property sold after a year — with a significant price reduction."

Renovating your home into the nicest digs in the neighborhood comes with big risks. Best to think twice before replicating the Joneses' extravagant additions, lest you end up with an over-renovated house that's undervalued by the market.

Here are the questions to ask yourself before one-upping the neighbors:

Is This Your Forever Home?

It's hard to believe, but the average American moves 11.4 times. And according to the data-crunchers at FiveThirtyEight, most 25-year-olds still have more than six moves (!) remaining. So, statistically speaking, you're going to move.

And when you do, you'll need to sell your house. That means you should think about how any project will affect your home's value. It's not as simple as you think. Just because you improve, doesn't mean you recoup (more details coming up — just watch for the tables).

Some people just want to buy a house and turn it into a giant English estate. That's your prerogative.

Michael Kelczewski, REALTOR®

On the other hand, you may truly plan to stay put. Newer studies find that today's first-time buyers want to stay in their first homes longer than previous generations. So if you're one of the ones bucking tradition, then by all means, do what you want to do without regard to resale value.

"Some people just want to buy a house, and live in it and turn it into a giant, English estate," says Kelczewski. "That's fine. That's your prerogative." (Although you mightwant to look into any homeowner association rules.)

But if you're planning a move anytime between now and eternity, let the Joneses keep a good lead on you in the renovation race. You'll come out better financially. Guaranteed.

Jealous of your neighbors' new master bath? Who wouldn't be? It's got heated floors, a sauna, and a massive whirlpool tub. To be honest, your own bathroom looks like the shower station at the public pool in comparison. And you have been thinking about renovating it. Maybe a sauna isn't such a bad idea after all. And how about one of those new tube lights? Yeah, that'd be cool.

Actually, doing the opposite — resisting the urge to keep up with the Joneses makes you the smarter neighbor. Just ask Michael Kelczewski, a REALTOR® in New Hope, Pa. His client added a spa with a downtown view to his Philadelphia home, which was way out of sync with his urban neighborhood. That made the home difficult to sell.

"He liked to sit in the tub with his Belgian ale and look over the city while it was snowing," Kelczewski says. "But the feature decreased the home's value significantly. The property sold after a year — with a significant price reduction."

Renovating your home into the nicest digs in the neighborhood comes with big risks. Best to think twice before replicating the Joneses' extravagant additions, lest you end up with an over-renovated house that's undervalued by the market.

Here are the questions to ask yourself before one-upping the neighbors:

Is This Your Forever Home?

It's hard to believe, but the average American moves 11.4 times. And according to the data-crunchers at FiveThirtyEight, most 25-year-olds still have more than six moves (!) remaining. So, statistically speaking, you're going to move.

And when you do, you'll need to sell your house. That means you should think about how any project will affect your home's value. It's not as simple as you think. Just because you improve, doesn't mean you recoup (more details coming up — just watch for the tables).

Some people just want to buy a house and turn it into a giant English estate. That's your prerogative.

Michael Kelczewski, REALTOR®

On the other hand, you may truly plan to stay put. Newer studies find that today's first-time buyers want to stay in their first homes longer than previous generations. So if you're one of the ones bucking tradition, then by all means, do what you want to do without regard to resale value.

"Some people just want to buy a house, and live in it and turn it into a giant, English estate," says Kelczewski. "That's fine. That's your prerogative." (Although you mightwant to look into any homeowner association rules.)

But if you're planning a move anytime between now and eternity, let the Joneses keep a good lead on you in the renovation race. You'll come out better financially. Guaranteed.

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