Editor’s note: This is a transcript of the audio file.

Pumping money into an underwater home may seem like financial madness. You may just want to cut your losses.

But sometimes, money spent to liven up a kitchen or a bathroom could be the difference between a home that sells and a home that sits.

I’m Janet Stauble with the Bankrate.com Personal Finance Minute. Here are some factors to consider if you’re thinking about sprucing up your underwater home.

Like real estate, renovations are all about location, location, location. In markets with lots of older homes, there’s value in modernizing yours.

But in states like Florida and California where there are lots of new homes, a seller who renovates before selling may seem like an oddball. In a price-is-everything market, drop your asking price by 20 grand instead of sinking that amount into updates.

Stick to midrange fixes and draw the line at what’s practical. If your dingy kitchen has a 70’s feel, reface and repaint the cabinets and spring for new countertops. No need to go crazy with granite and gutting to freshen things up.

If you’re doing fine with your money, a modest investment probably makes sense. If you plan to stay in your home for a decade or two, then build away. If you’re falling behind on your bills, limit your investment to the sweat equity kind.

To learn more about today’s housing market, visit Bankrate.com. I’m Janet Stauble.