A couple about to embark on creating their dream house writes Suze Orman for advice before they crack open a can of paint: "We recently bought our dream house. Problem is, the master bathroom is a nightmare. Our friends say we should redo it all in white, which would be most appealing for resale. But we're desperate for color. We want mosaic floors, cheerful tiles in the shower, and a whirlpool tub. What do you suggest—and how much do you think is reasonable to spend on upgrading a bathroom in a house in our price range?"
Your friends definitely have a point: The further away you get from neutral tones on the color wheel, the greater the chance that your ideal bathroom will be a turnoff for potential buyers. But before I give you the "beige is best" line, let's talk about your plans for the future. The length of time you expect to occupy the house should determine how much attention you need to pay to resale value. If this is your dream house, and you're there to stay, then make it a home you love! If you plan on living in the house for 20 years, whatever remodeling you do now will probably be out-of-date by the time you're ready to move; the work's resale value is going to be diminished by time if not by taste.

If you're going to move on in a few years, then yes, you should renovate with an eye toward resale. You definitely want your home to appeal to the widest number of potential buyers. And for that, middle-of-the-road neutrals are the way to go. The good news is that, according to Remodeling magazine's annual "Cost vs. Value Report," homeowners can typically expect to recoup more than 92% of the cost of an upscale bathroom remodeling job when they sell. But as I mentioned before, the further away from neutral colors you go, the lower the probability that you'll get close to $9 back for every $10 you spend. You can find plenty of ways to incorporate color without imposing your taste on any future buyer. Rather than opting for color in the mosaic and tiles, which are permanent, what about settling for more neutral tones there and bringing in bursts of color with your accessories and fixtures? I'm thinking about the towels, the lighting fixtures, the artwork, etc. When you're ready to sell, it won't bust the budget to convert all those color touches to neutrals.

Now let's talk about your budget. If you're expecting to move in a few years, you obviously don't want to spend more than you can easily recoup. What you want to avoid is creating the most expensive house on your block. It's far better to have a nice house on an even nicer block. That way, when you decide to resell it, your home will be seen as a terrific value.

What about finances? Do you have enough cash on hand to pay for the work, or will you be taking out a home-equity loan (HEL) or line of credit? I think HELs are great as long as you're super responsible. Just because the bank will give you a big, fat HEL doesn't mean you should take it. If you fall behind on the loan, you could lose your dream house when the lender forces you into bankruptcy. Real estate may be a terrific investment, but the crazy appreciation rates we've seen during the past few years aren't going to continue. Things are going to slow down as interest rates rise. That's just the nature of the housing market.

One final bit of advice: I don't want you paying for a lavish, high-end bathroom with money that belongs in your retirement savings account or in the kids' college fund. That could leave you in serious financial trouble down the line.


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