What do you do, if your present home has become too small, but you're fond of the neighbors, your kids like the school, and you're particularly attached to your back yard?

Do you add on or sell the place and buy something bigger?

It's a difficult decision, and of course it's a personal one. But I can offer a few facts to help you analyze the situation.

The most important question, from a financial point of view, is -- how does your home compare with its neighbors?

If you have the classic "most prudent buy" -- the least expensive house on the street -- it's probably safe to invest money in expanding it. You're likely to recoup quite a bit of your investment when you sell.

Just try to ensure that after you've finished, the different parts of the house match. You don't want to end up with a five-bedroom house that has only one bathroom or the tiny original kitchen that won't even hold a highchair.

But if yours is already the largest or most valuable house in the area, putting further money into it isn't likely to increase its eventual sale price.

Every street supports only a given price. After that people with more money want to live on a different street -- people are just like that. No matter how fine the house, you aren't likely to get your money out.

If you're particularly fond of the neighborhood and you intend to remain in the house for many years, that may not matter. You can't look at your own home simply as an investment. Just admit that you're making improvements for your own enjoyment, then relax and enjoy them.

I'm Edith Lank, and I wish you good luck.

Published: April 8, 1999

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Editor's Note: This article reflects the opinions of Edith Lank only and not necessarily the views of this or any other publication, organization or Website owner.