Maybe I’m old fashioned, but I think people should buy the house they can afford and maintain it well. I love walking through the older part of my town and looking at the tidy bungalows that are impeccably and lovingly maintained.
Life happens and resources you once had can falter. Happens all the time to the best of people.
Having a large mortgage might be part of an investment strategy. Especially for those in high income tax brackets, the after-tax interest rate might be quite low on the mortgage and alternative investments may be paying more. So these neighbors might be living beyond their means and on the brink of foreclosure if one of them loses a job or suffers a serious illness OR maybe they are in really good shape financially. I didn’t know that info was available!
I would not be worried about the mortgages & the debt-equity ratios of my neighbors.
I’d be worried if the neighbors were unable to maintain their homes, or if the character of the neighborhood had changed dramatically due to short sales and foreclosures (thank you 2008!)
Uh, that’s our situation. Economically depressed area. Houses in various states of disrepair. Home values (“comparables”) are unfavorable and we are STILL underwater (thank you again 2008!).
Sounds like the OP could invest in upgrades without much risk.
It would not be wise for us to sink major money into this old house.
Invest in the upgrades. It’s not just the value they’d add to the house, but an up to date kitchen and bath, done tastefully in neutral colors, will help a home sell faster. Buyers don’t want to be faced with a remodel project as soon as they move in.
As far as the neighborhood, it’s the exterior upkeep to look for. Is landscaping maintained?. Is exterior paint peeling? That sort of thing.
Maybe the neighbors refinanced their houses to pay for their kids’ educations. 
Bad idea there.
In some areas, youd be surprised how many new owners rip the “new” kitchen out.
If money is no concern to you, do what you want.
I think if you can afford it and like the neighborhood you should just do it and not worry about ROI. I do agree that a house in mint condition will sell faster.
It’s true new owners (and even old owners) seem to be addicted to ripping out new kitchens. Keeps me in business!
@Gourmetmom we have gotten a little lazy about that mulch too. You know…it doesn’t matter to us and it doesn’t matter to our neighbors. We also have 2 acre lots, and everyone cares for their yards the way THEY want to care for their yards. Years ago, it meant a lot to me to have a crabgrass free lawn. Now…as long as it’s green, it doesn’t matter to me at all if it’s clover!
Re: improvements. We have done some and will be doing some others within the year. We are doing these so we can enjoy them before we get ready to sell this house and move on. We will be replacing upstairs carpet, installing central air, maybe refacing or painting kitchen cabinets, and maybe getting wood chips and mulch put down. Maybe on that last one. We will enjoy these ourselves.
We are getting estimates to redo our driveway and walkway. Looking at some ideas that are a bit fancier than the plain cement. It will cost more, but we are doing it b/c we will enjoy it. Not doing it for the resale value.
We likely will be redoing our deck in the nearest future. I hate taking care of wood decking with a passion. Again, a giant composite deck is not going to pay off if we have to sell. Will be doing it for ourselves. Mr. is convinced that with global climate change, our area will be more desirable for retirement. That, and the fact that pretty much every FAANG now seems to open a new office here and grow in local numbers.
We were in our last house for 13 years. While we didn’t overbuild for the neighborhood, we bought right before the real estate crash so knew that we were never going to get out what we had in. That said, we knew we were going to be there for a long while and made some improvements anyway. We knew for sure we wouldn’t get a cent out of finishing our basement or putting in an expensive paver patio, but we had both for 10+ of those years in the house and enjoyed them immensely. We basically broke even on the purchase price of the house when we sold but the “upgrades” helped sell the house the first day it went on the market.
My opinion is if you plan on staying and you’re in a neighborhood where people are caring for their properties, do what you like to the house. It doesn’t matter if your neighbors have big mortgages as long as they are making their payments and keeping up with maintenance.
@thumper1 a clover lawn is healthier for the environment. We need to plant to encourage our pollinators and native fauna. That may sometimes mean a yard that looks a little different than what we’ve gotten used to.
I like the look of clover meadows! Crabgrass - no thanks. 
This one is completely up to you. The one extreme is that you want to enjoy your house in certain ways, and future resale is of no interest to you. My advice to anyone with that philosophy is to run the numbers and make sure you can afford to do this. If, for any reason, you had to sell the house, would putting a lot of your money into it adversely affect your options?
When we moved into our house 20 years ago, we did things to it that did not help it’s salability profile, because there was a more urgent need to make life as easy as possible for all of our kids and other friends and family we would host in the house. If a kid wanted an ugly paint color for her room, that it hurt the appeal of the room for resale was no big deal, as a minor example. We could afford that hit, and having to redo if it became a selling impediment
But we did draw the line at certain things that would have been so very nice to have done, because of the dollar amount of distraction and fixing it would take to bring the house into show condition.
These days, anything we do, or not do to the house includes consideration on the effect that would have on resale because it is in our imminent future. Big difference in attitude. If we were really counting on the money we would get from the sale of the house such work on the house would be an even more pressing matter. As it is, we feel we have enough leeway that, we don’t have to obsess and weigh every little thing, but we do keep an eye on the situation.
Yes, if distinct signs cropped up indicating a decline in neighborhood values likely, we’d rethink putting any money into the house. But all of that hinges greatly on HOW MUCH MONEY is involved. A hundred dollars? Pshaw—not a thought. Not even a thousand. But as we go up the scale, it would matter, yes.
Renovation is very expensive and you have to think long term when you do it, which is not easy to do nowadays. It can easily take 4-5 years for your updated house to appreciate sufficiently to get your money’s worth on an ambitions renovation. It’s not uncommon for people to spend tens of thousands updating their homes and then get a job transfer a year later. What ends up happening is either a huge loss or house that sits on the market for months because the value hasn’t appreciated sufficiently.
I would say, unless your cabinets are falling apart, you could slap on a coat of paint and replace the countertops. That would cost $2,000 instead of $25,000. You could replace a bathroom sinktop for $800, including labor to hook it up, and slap on paint to the vanity. We opted for the less expensive Home Depot laminate flooring and it saved us about $6,000.
I don’t think those cheap options would improve the value of the OP’s custom home.
I’m really on the fence on whether to renovate or just sell after a quick spruce up in the kitchen - I really don’t need to do very much to sell. I’m just tired of my kitchen, so if we stay, I want to reconfigure it to include a sitting area that will require building out.
I have not seen a house that I like better than mine in my area, even up to 45 minutes away. I would love to be on the water or have an ocean view, but a house equivalent to mine on the water would be much more than what I want to spend. The other option is building new, but after all that effort, I’d just have a different house in another neighborhood. And, if I wanted to build my same house today - exactly as is, for a number of reasons, it would probably cost triple.
Nor does OP want to go cheap.
She could be talking 100k. Lol. Lots of high end kitchen designers won’t take a job less than 50-75k, when all is said and done.
But clearly, she has the money in hand, isn’t concerned with eventual ROI. The kids may be, but that’s another story.
@lookingforward Probably at least that much since it’s brick house. I think that it will be impossible to match the brick so the build out will be fieldstone to match the patios in the back.
I purchased a new SubZero fridge (the big model with the glass doors) and Miele dishwasher a couple of years ago and I will definitely keep those, which will save a bit.
I also want to reconfigure my master bath and closet, which will be a big job. And all new paint and wallpaper everywhere, one new fireplace mantle and facing, all new fireplace doors, new stone kitchen floor, refinish all the floors, and drapes, which are astronomical. And some new furniture and light fixtures. I have a couple of chandeliers that I’ve grown to hate. I feel nauseous!