Home Renovations That Don’t Add Value

While many home renovation projects add value to your home there are others that offer little or no ROI when it comes time to sell. A few of these projects include personal spaces, swimming pools and luxury upgrades that may appeal to you but not to a majority of buyers.

“Value” can be defined as increasing a homeowner’s comfort, adding enjoyment as well as increasing your home’s resale price. It is important to keep in mind not all home renovations add value.

Installing a Swimming Pool

A swimming pool addition is a good example. In warmer climates, a pool can provide hours of enjoyment and enhance an outdoor space, but it may not provide the financial return you expect.

According to Curbio, adding a swimming pool can increase a home’s value by roughly 7%. On a $400,000 home, that would amount to $28,000. The cost to install an inground pool averages $45,000, falling well short of your initial investment.

In some markets, adding a pool could make your home less appealing to potential buyers. Yearly maintenance costs can be as much as $1,800. There are also other concerns, including insurance and the time it takes to maintain a pool, that can discourage a buyer from purchasing your home.

Before any major renovation begins, have a well-thought-out plan that includes researching your local real estate market and the preferences of potential buyers.

Personalizing Can Have a Negative Effect on Buyers

Designing or renovating your home to suit only your personal taste can have a negative effect when selling your home. A buyer may see extra costs and work needed to change the space you created. Buyers tend to avoid homes with too much personalization, such as themed rooms, built-ins, and fixtures that reflect a particular taste.

It is important to keep these things in mind when planning a renovation, especially if you intend to sell your home in the future.

Focus on Value-Added Features That Match the Market and Your Home

Most buyers are interested in homes that take into consideration the climate, home type, neighborhood, and prices they can afford. For example, installing a patio kitchen in a colder climate may not suit the region, whereas a mudroom might be a better choice and appeal to more buyers.

The same can be said for specialty rooms, such as home theaters and hobby rooms. While these may add comfort or convenience for you, a buyer may not be interested.

More flexible spaces, such as a home office that can serve multiple purposes or an extra guest room, may add more value for a buyer.

Renovations That Reduce Usefulness Should Be Avoided

Renovations should not remove practical living spaces or reduce storage or parking. Turning a garage into an extra bedroom or family room removes parking and storage space that buyers may expect.

Combining two bedrooms into one larger space reduces options for larger families who need those bedrooms and eliminates closet space. Doing so may alienate many buyers looking for additional space for their families.

How to Decide Whether a Project Is Worth Doing

Good renovation choices consider resale appeal to buyers in relation to cost, upkeep, and the benefits you enjoy while living in the home.

Research your local market and recently sold homes to help you judge what attracts new buyers. Meet with some real estate agents to find out what other homeowners entering the market are renovating to help them sell their homes. Don’t assume a project will pay off everywhere.

Stick to renovation projects that have historically offered a good ROI, such as kitchen renovations, bathroom remodels, improvements to your home’s energy efficiency, flooring updates, and window replacements.

By CW Mathews