Don’t renovate capes!

Okay, that’s a bit over-stated, but here’s an example of someone putting what may prove to be good money after bad. 66 Perkins Road was bought for $2.2 million in 2006 and renovated to some extent (or completely – depends how one interprets realtorese). Returned to the market for $3.6 million in 2007, it was still a house with low ceilings and still didn’t sell. It’s got a new broker now and a new price; $2.750 million. Depending on how much the owners have put into it, the new price seems perilously close to what they paid for it (net sale proceeds after taxes and commissions = < $2.585, less renovation costs). It’s true that they could have given their money to Walt Noel to invest and lost it all so breaking even may not seem like such a bad deal, but my general rule still stands: pay for renovations if you intend to stay and enjoy them; otherwise, move on. There was a time when you could buy a house, update the kitchen and baths and maybe pick up a hundred grand profit – this is not that time.

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