If your immediate goal is to refi, then renovating the existing bath will get there faster than putting in a brand new one. I don't know if it'll get you 20K in appraised value, as that depends on where you live.

Is the future master bath near the hall bath? If so, even if the master bath needs to wait, I'd advise going ahead and figuring out the floorplan now. There might be some rough-ins that the plumber could do while the hall bath is torn up (like connect the vents and drains) that will make it simpler/easier to put in the master bath later.

Thanks for that info! I should mention that isn't the only project we are doing to increase the home's value. We are redoing the bathroom, stripping many many layers of 1980's wallpaper so that we can retexture the walls and repaint, getting rid of popcorn ceilings throughout the upstairs, replacing all of the dated light fixtures, ripping out all the old carpet and refinishing the existing hardwood floors, installing new windows throughout, and installing new interior doors with brushed nickel hardware. DD's bedroom will get beadboard along with the new paint. We will install new baseboards everywhere (they are carpet now) and crown molding in the living room. We are also planning to finish the basement family room and put new doors and carpet in the hallway down there that leads to the unfinished part.

The kitchen is going to have to sit this round out. A full remodel is more than we can afford right now so it will get freshened up with new paint and appliances. The cabinets are the 1985 but with solid oak doors and in decent shape. We will also do new light fixtures in there and a new faucet and possibly hardware for the cabinets. Eventually I will do new counters and a backsplash.

In the spring we will tackle the landscaping and install a new fence in the backyard after we get our first time homebuyer tax credit.

Does it sound like we are on track?

Oh, and yes, the proposed master is right next to the hall bath. The ceiling below both rooms is exposed right now as well, so our plumber (dh's uncle) said it should be pretty easy to run the new plumbing.

I suggest you ask a good local RE agent what would be the best to do to increase equity. My guess is it will be adding the master bath, but your local market may vary. If your DH has lost his job, I would not do anything until he finds another job.

Due to the credit squeeze, median price decline and resultant criticism of inflated appraisals, in many areas appraisals are coming in VERY LOW. I would be very cautious of doing anything to the house unless your personal finances are rock-solid.

Thanks jkom51. Dh did lose his full time job, however I work FT and he also teaches music lessons and does a fair amount of gig work. We can comfortably afford the house because we intentionally bought something we could afford on one income. We are not using our emergency fund for these projects, but money we saved and earmarked specifically to make the house livable. All of it will be paid for with cash. It had been used as a rental for the past 3 years and many of these projects are really necessary repairs. The addition of the master bath is a luxury, obviously, so that's where my question originated.

This home was actually 30K less than what we budgeted. Comps of recently sold homes in the neighborhood come in 60-80K above what we paid. Our RE market here in UT has been holding pretty steady while the rest of the nation has seen declines.

I will talk to a few RE agents to get their opinions as well. Thanks again!

It would seem that the house with two baths would be more valuable. I'm hoping you are not over-improving for your neighborhood. At least you are not adding on -- a good thing.

I'm also hoping this house is *worth* all this work -- that the end product will be much more valuable than it is 'as is'. (I need to tell you my self-awarded forum title is The Teardown Queen. LOL)

You have nothing to lose by consulting a couple of realtors.

Thanks chisue! We are definitely not overimproving for our neighborhood. We literally bought the worst house in the best neighborhood. Many of the homes have already been totally updated. It was bank owned and we really did get a great deal on it.

If I posted the rest of the pictures of the house, you'd see that it isn't quite livable as is, lol! Did you check out the bathroom pic? We also don't plan to go crazy on high priced materials. We'd like something better than builder grade, but still pretty middle of the road as far as the bathrooms go.

There are a few things that can and might wait (like the replacement windows and kitchen counters). We already decided today that we will wait on new appliances and put that money into something else. The ones we have are completely functional honestly and they will be fine for a while.

This is just my opinion but I would add the master bath. It adds a second bath to the home, creates a master suite and does not require an addition.

It also will be the pricier of the two options, however.

There's something kind of fresh and cute about your blue bath! (I know that pictures can be deceiving!) Any chance you could switch out the vanity/sink/fixtures and call it good for now?

Good luck!

If you are going to live in this house for quite a while I'd replace the windows and add insulation in the walls. If you're not going to live there long...I'll quote a realtor's remark when I bragged about having replaced all our windows, how much cozier we were in winter, etc. She said most buyers don't appreciate new windows. They expect that there will BE windows, and there it ends.

"There's something kind of fresh and cute about your blue bath! (I know that pictures can be deceiving!) Any chance you could switch out the vanity/sink/fixtures and call it good for now?"

busybeme - Now that the wallpaper is gone, it's actually growing on me a bit. After running some numbers last night, I think we settled on on exactly what you are suggesting. If the floor doesn't run all the way under the vanity then we'll do new floor tile as well, but we should get away with less than $1500 in materials that way and labor is all on us.

chisue - I am thinking that we'll be here a while. Our current house has the same single pane aluminum frame windows and they are awful in the winter. They sweat terribly and you can just feel the air rushing through. This will also be a DIY project and we have very good pricing on the materials so it will stay near the top of our priority list and we'll reevaluate as things progress.