I would look at houses that are similar to yours in price range and see what they have.

We are getting our house ready to sell (high end for our market) and most, for example, now have granite in the masterbath so we upgraded the cultured marble vanity in the masterbath and powder room to granite. That was important in competing with houses in our price range. On the other hand we are downsizing and the house we are buying is less expensive and upgrading to granite in that price range would have been a waste for resale since it really isn't expected in that price range.

I think you need to check out the competition also. Some of those items like the kitchen, bath, or CAC may not be an issue if the other houses don't have them. On the other hand, any of those items could just be the thing that sets you apart and makes you better than the competition when it is time to sell. You probably wouldn't have to do everything to have the advantage.

Good luck and keep us posted.
I'm not familiar with the area where you live so I don't know how desirable CAC or an oil burner is. I'm assuming you're in a colder climate so maybe the oil burner replacement??? should be given preference over the CAC because it's more of a need. I also don't know what you mean by backyard, but if it's landscaping related, you may be able to get by with fairly inexpensively if you're willing to do do the labor. You have time to grow some nice bushes and trees if you start now. If you can make the place a small haven, it could be a huge advantage. Depending upon the state of the deck, you might have the option of leaving it 'as-is', replacing with a new deck or possibly even changing it into a less expensive patio area. By the same token, you may not have to entirely redo the kitchen or bathroom to get it looking updated. You might be able to update by repainting the walls and cabinets and upgrading faucets. The costs could be a couple of thousand compared to $50K.

In general, unless you do the work yourself, the average return on any home improvement is negative. eg, you spend 10k and your house value only goes up 9k.

If you said you wanted to sell in 2 months, I would say to clean everything well. Get rid of all the clutter. Paint the walls. Fix anything that is broken. Minimize or replace any huge eyesores.

Perhaps I'm not a typical home buyer, but the one thing above all else that would sell a house to me is the hvac system. If I were looking at two houses priced similar and one had updated hvac, that would be the clear winner for me. Yes, this isn't a glamorous decision that most people will see when they walk into a house. But everything else is cosmetic. Those can be fixed at will to suit a buyers taste. Everyone needs a proper functioning hvac unit.
Also, you may want to consider looking into switching the unit out for a natural gas one. I have an oil heater in my current house and it is the bane of my existence. Plus, switching to gas would have its advantages in the kitchen since most people prefer it

You'll want to be on par or better than the neighbors so you'll need to check pictures of listings in your area.

In my area, oil tanks are considered to be a liability on par with asbestos so that would be top of my list. Next would be kitchen or bath-which ever is worse in appearance. But bath is more likely to need a total gut while kitchen may get by with new counters ,sink, and faucet, while painting or staining the cabinets.

Gosh, there are a lot of things to consider before deciding which project should take precedence. You are the one living in the home, and know which one of these are in a sad state of affairs and not just behind 'current trends'. If something is liable to break down soon, or is an eyesore deal with that first.

Consider it is also a starter home. You can definitely over improve a starter home and price it clear out of a sale, or lose money if the over improved home is located in an area of homes with less value.

Since you may be living in it for five more years, you may as well benefit from your investment. What would you like to change most for your own enjoyment?

Yes, you can sink money in the outside easily, but just cleaning up your ground, removing overgrowth, installing some shrubs and trees for visual impact, and neatening up your gardens can be done yourself without a lot of expenditure and is important for showcasing your home. Take it off of your money list and just do it anyway.

If you have an antiquated heating system and no AC, you might consider this high on your list of priorities. There are tax credits now you can advantage, and you can also be partially reimbursed through savings on your utility bills. It's the first thing I look at when buying a house. It's the first thing I replace, if needed, too.

Look at partial renovations more seriously. A kitchen and bath can get very expensive, but fixing any issues with existing cabinets and a good cleaning and new hardware can make a lot of difference. Pay attention to caulking, and finish work. Splurge on things like faucets, back splashes.

There is a distinct point of diminishing return on starter homes and it may be more cost effective and profitable to do less and charge less than do more and charge more. This is especially true in a sagging house market where bottom line is more important than it used to be and house appreciation isn't automatically assumed.

i'm in the process of selling my starter home. I did upgrade pretty much everything except the siding.

My advice, skip all of it. We did the work ourselves, and still we're not getting all our money back.

If something is sticking out like a sore thumb you might want to do something, ie: everything is nice and new except for the bathroom.. Also do any repairs that are needed like a new roof if the old one is in bad shape.

However, you're never going to see the $$ back on an upgraded heating system, new electric etc

you say the kitchen and bath need upgrading, having not seen the house I can't tell you whether you're right or wrong. However, my kitchen was from the 60s and the bathroom as well, they weere terrible. However if you're are from the 80-90s and are just a bit dated, I'd skip any upgrade unless you can do the work yourself.

Thanks everyone for your replies. All your advice is very helpful and appreciated. I agree with checking out the competition. Although I'm not looking to sell right now, I check out what's for sale in my neighborhood all the time. I would say I'm on par with what's out there...right now, anyway.

I live in the Northeast (Long Island)...so, heating system and CAC are both important. We don't have the option of switching to gas heat, as there are no gas lines on my block (it would cost $30K to have a line run to our house...HELLO?!?!?!)

Our kitchen is brown laminate from the 60s! One of the reasons we got such a good price for the house! It's a very large kitchen too, so replacing it would be $$$$. Everything looks fine, but just dated. No use putting granite lipstick on this pig!

Since I will probably be here for a few more years...I may redo the bathroom we have downstairs, and then just do a minor facelift on the bathroom upstairs.

I should have been more specific when I said "backyard". It's way overgrown and has no defined beds, etc. We could probably do a lot of the work ourselves, but I'd like to have some regrading done and I don't think we can tackle that job. Our lot size is 85x150...not huge, but it's a decent sized backyard.

I'm just trying to enjoy the house, but make smart decisions about the money I invest into it.

Modern laminate tops are pretty cheap. If the countertop is the main thing dating the space, that would be a reasonable thing to update. Of course, if you meant the cabinets, then yes, that could get expensive quickly.

Do what needs to be done & what makes *you* happy living in the house;

if/when you're closer to selling, do what needs to be done *then*.

You can't always predict what'll be hot 5 years down the road;

pink & turquoise & black ceramic tile baths from the 1950's used to be considered old & ugly, & now people are clamoring for mid-century classic style.
Your 1960's features might be the hottest thing in 5 years.

As a fellow LI person, congrats on purchasing your home. Both an exciting time, getting a place to call home, and paying for the retirement of the previous owner who probably bought the house new and didn't touch it.

Sounds like you got your priorities straight. I would say, if you are going to regrade and add material, or even not, if there is a lot of dirt work to be done, hire someone to do it with a bobcat. For our house we regraded the side yard, and built 2 beds in the back, and 2 in the front. It started with 30 bags of dirt from home depot, and ended with us getting 9 cubic yards of dirt dumped from the supply house. all of which was carried, wheelbarrowed, and shoveled by hand, by us. Although we're finnally happy with how it turned out, it would have been easier, and probably better, to have it fixed from the start, with the right amount of dirt, and the right equipment doing the work.

Regarding my antique kitchen...both the cabinets and the countertops are laminate...yuck.

And to my fellow Long Islander...yes, we're happy to finally have a home. We were in an EXPENSIVE apartment for years because houses out here were so unaffordable for so long. Things have definitely gotten better. You hit the nail on the head with the previous owners. I know they weren't the original owners. They lived here for 15 yrs and I'm now convinced that everything they touched in this house...just made it worse, not better.

I think I just have to sit down and type up a punch list of things I'd like to see done in the house big and small and then start to prioritize by affordability and want vs. need. I'm going to take everyone's advice and try not to focus so much on resale, and more on just enjoying the house while we live here.

I think the key to starter homes is they are usually purchased by people who may not have much owning experience or money. They are not going to look at something and say, "Oh, I can just tear that out..." they want something turn-key.

That said, I have heard that dollar for dollar, kitchen and bath upgrades are the best bet. People see and use these rooms regularly. But you know the situation best. If the oil burner is causing you to lose sleep, do that first.

Also, unless you're getting into hardscaping, I would think that the yard would improve significantly over time just with regular maintenance and attention.

Around here wooded lots are popular and trees take some time to grow. Plant a few quality trees in good locations and that should reward you down the road.

I agree w/a PP who said you should just clean up the yard really well, then plant a few trees (if needed -- and especially if you don't have CAC, which I think you mean central air conditioning). We live in a starter home (going into our ninth year OMG). In my neighborhood of starter homes, which is on the opposite side of the country, most of the front yards are basic (tree and grass) and most of the back yards, from what I've seen in listings, are about the same. I enjoy gardening, so I've done what I felt like w/the yard. If I did not enjoy gardening, I would have left it to be basic and clean. Better to match the other yards unless this is important to you and something you enjoy. As for the deck, make it safe for use and clean it up.

The kitchen, IMHO, is an area that should be updated if it's as awful as you describe or, when you go to sell, you might also have to offer potential buyers a pretty sweet deal on the price. Our kitchen was also laminate, but a little more current (1970s LOL). Fake butcherblock laminate counters that were swelling w/water, fake dark wood cabinets, 12-inch wide drawers that were falling off, poor layout...it was terrible! AND it was a small, one-butt kitchen. So when we had a chance we remodeled. It's not high-end, but with the help of reading the kitchen remodeling forum here on GW we were able to incorporate a lot of nice features. It's really a great kitchen within our budget, and I think it will set us apart when/if we sell. One budget-saver was to get Ikea cabinets. We've had them almost two years and they have been a great value. Perfect for a starter home! I love the new kitchen, and since DH and I both cook, we really appreciate it. Even if we can't recoup everything we spent, the aesthetic improvement while we live here will make up for it. Our kitchen is open to the main part of the house so it's not like we could hide it away when it was old, broken, and ugly. Maybe I'm a bit biased when I recommend remodeling the kitchen, but if you use the kitchen a lot and find a way to swing an affordable remodel it will probably be worth it to you.

Your idea to make a list and think things over makes a lot of sense and I hope things are clearer for you when you're done.

If you are willing to look at IKEA - and can do some things yourself you might be able to do a kitchen for very little money. Look at the kitchen forums here too for other ideas/options of budget transformations.