Homeowners often assume that upgrades and renovations always increase their place’s value and make it more sellable. But while many home improvements can add to a house’s appeal, they may not add value and, in some cases, could even act as a detriment when the property goes on the market.
Knowing which home improvements won’t add value to your home is vital if you plan to sell up – or considering investing a large sum of money in a home remodeling project.
In recent years, you can’t move without being inundated with advice on how to make more money on your property. From big projects to small tweaks, there are plenty of changes you can implement that will guarantee you a better return on your investment when you eventually move on. Planning your next laundry renovations? Hitch Property Constructions has you covered!
You’ve heard them all – from upgrading your home’s energy efficiency and building an extension to converting the loft space and remodeling your bathroom – but are the cost, hassle, and disruption involved worth the return you’ll reap in the end?
Here are the most common home improvements that could turn out to be mistaken.
Extensive Professional Landscaping
You can build an entire amusement park in your backyard, and it won’t bring you big bucks upon resale. If you want to put in a waterfall that cascades down into a koi pond, do it because you enjoy the water feature, not because you’re hoping to recoup the investment. Landscaping choices are a personal preference, and all the hand-crafted bridges and unique pergolas in the world won’t dramatically boost your bottom line. And some buyers will inevitably see only the money required to keep that beautiful backyard well maintained.
Upgrading the Utilities
Although you may have paid thousands to install new copper or PEX plumbing, replace your sewer lines or septic system, or upgrade the electrical wiring to Romex or conduit, it’s unlikely to bring you more dollars. These types of utility improvements are considered home maintenance—and your neighbours probably made them years before you. Of course, getting everything state-of-the-art isn’t a bad idea: In certain areas, top-of-the-line is considered the standard, and without it, you could take a hit when selling time comes. But don’t convince yourself these upgrades will let you mark up the price tag.
Many buyers in the marketplace appreciate a home that features a brand-new furnace or HVAC system, but they won’t pay you much extra to replace it. However, if the HVAC system is incredibly energy-efficient, you should use that as a selling point; it may make a potential buyer more excited about purchasing your home.
The same holds regarding a new roof: Replacing a roof past its average life expectancy of 30 years is considered a maintenance issue and won’t necessarily enable you to up your asking price. But giving buyers who are on the fence the peace of mind that they won’t have to make that costly repair anytime soon could spur them to make an offer.
Swimming Pool or Hot Tub
The TV commercials for pools and hot tubs depict children having a blast splashing around and adults sipping cocktails in the bubbling water. Sadly, though, the cost and expense of aquatic amenities rarely find their way back into your pocket. Many people won’t buy a home with a swimming pool. They don’t want to deal with the upkeep or safety issues. In fact, as part of negotiations, a buyer might insist that you tear out the pool or whirlpool. If you want to install a pool or hot tub, do it because you will enjoy it, not because it will pay off when it’s time to sell.
However, swimming pools add more value now than they have in the past, thanks to the increased demand resulting from the COVID-19 pandemic:
“I never wanted a pool, but for the first time during a pandemic, I wanted one. We used to say with pools that you wouldn’t lose money, but you wouldn’t gain it either. But outdoor living has become considerably more desirable.”
Making Quickly Dated Decor Changes
You might like white appliances and white ceramic counters, for example, but young home buyers do not. They are no longer “in.” And don’t go down the road of rose gold bathroom fixtures and door hardware. Even 12-inch-by-12-inch ceramic flooring has lost its appeal to some. The point is, don’t deliberately decorate in the latest style for resale reasons. Fashion changes too fast.
Sure, the salespeople at the solar panel company tell you that installing solar panels will enhance your home’s value, but that’s often not true. Going solar may be an admirable thing for the environment, but it usually does nothing for your residence’s selling price. Moreover, if you have financed the solar panels, you probably can’t sell the home without paying off the balance at closing, which is often not disclosed.
If you want to reduce your carbon footprint and monthly electricity bills, installing solar panels might seem like a no brainer. However, solar panels do not typically increase home sale prices. Solar panel cost and return on investment vary widely based on location and solar panel type. But on average, solar panel installation ranges between $11,144 and $14,696 after solar tax credits, while the average return for solar panels is around 10%.
The value solar panels add also depends on whether you lease or purchase the panels outright. Since leased solar panels belong to the solar company, not the homeowner, they do not add value to your home. On the other hand, Purchased solar panels may contribute to your home’s value; however, this value-add decreases over time (as quickly as 9% annually, according to one study) as the panels age and improved models enter the market.
DIY home improvement projects
While it might be tempting to spruce up your space with DIY projects like a faux fireplace or hand-painted cabinets, don’t expect these upgrades to add value to your home. According to top-selling Atlanta, GA agent Madalyn Suits, buyers notice DIY projects from a mile away — for all of the wrong reasons.
“We use the phrase ‘lipstick on a pig’ a lot. When people try to put their hands on everything, it shows that someone tried to make it look good. Buyers might begin to think, ‘Did they do everything themselves?'” she shares.
In one instance, Suits had a client who completed a DIY bathroom remodel with unappealing results. The client attached a frame to a built-in frameless mirror and added the frame to three of the four sides. They were also considering adding fake linoleum wood to replace the existing tile. However, Suits advised against it. “I recommended they spend their money on doing one project well so they could get more bang for their buck.”
Beyond yielding less than stellar results, DIY projects often cost sellers more than they anticipate. The higher the project cost, the lower the return on investment you’ll see at resale.
“We tend to watch a lot of HGTV, and it’s amazing to see what these people can do to a home. But there’s a lot of risks behind closed doors to those projects. You could easily end up spending more money than you planned,” comments Ray Mihara, a top agent in Tampa, FL, who sells 66% more single-family homes than the average agent.
If you’re thinking of starting some DIY projects, proceed with caution. You’ll need thorough planning, hard work, and dependable craftsmanship to pull DIY off successfully.
Whether you need an in-law suite or a home office space, there are plenty of reasons why you might consider a garage conversion. Still, you should think twice before converting your garage into an additional room if you want to sell it anytime soon. On average, homeowners spend around $10,000 to convert their garage into a living space, but, unfortunately, this home improvement does not add value to your home.
The reason? Most buyers prefer a functional garage to an extended living area. In a recent survey by the National Association of Home Builders, 25% of homeowners rated garage storage as “essential” while another 56% rated it as “desirable.” Additionally, our agents share that most buyers, especially those in colder climates, want the option to store cars inside of the garage to keep their vehicles clean and frost-free.
Wallpaper might be making a comeback, but that doesn’t mean this home improvement will add value to your home. Most homeowners spend between $800 and $1,200 to wallpaper a room — a cost they’re unlikely to recoup at resale. Wallpaper is highly personal, and a pattern that appeals to you may or may not appeal to a wide range of buyers. Most real estate agents recommend removing wallpaper before selling your home to create a neutral interior with mass appeal. If you’re thinking of revamping your walls, consider hiring a professional to apply a fresh coat of light grey, beige, or white paint instead.
Custom luxury upgrades
If you want to make extravagant upgrades to your home, be warned that custom, luxury home improvements typically only recoup a fraction of project costs. For example, according to Remodeling Magazine’s 2020 Cost vs. Value Report, high-end kitchen remodels only recoups around 54% of the charges, significantly lower than a minor kitchen remodel, which recoups 77% of costs on average.
The reason luxury home improvements do not add value is that these often remodels highly personal. Homeowners tend to splurge on high-end materials and finishes based on their personal preferences. When buyers tour the home, they view the luxury upgrade as a “nice to have” rather than an essential feature and often are unaware of the total project cost or significance of material choices.
If you’re selling soon, it’s not advisable to “spend big money on items like a wine cellar” since even the most passionate wine connoisseurs are unlikely to spend more for this bonus feature. A custom wine cellar can add elegance and a “wow” factor to your home, but for an average cost of $40,000, it’s unlikely to recoup the majority of the respective project cost.
Only loyal wine fans would even consider installing a wine cellar in their home, and the cost and expense involved would have to warrant at least a few decades of use, too.
The idea of a wine cellar seems excellent, especially if you have an extensive range of high-quality wines. However, the cost of installation is exceptionally high. It would certainly make a quirky point of interest for a realtor or estate agent, but in truth, unless your buyer shares your love of wine, it’s likely to be a hindrance than a bonus.
While you may see that as a unique feature in your home, it may end up setting you back more than you would expect with little to no financial benefits.
An oversized home addition
Before you significantly increase your home’s square footage, research the average square footage for homes in your neighbourhood. If a second story or home addition makes your home the largest in the area, you could struggle to sell your home down the line. According to The Real Estate Appraisal Group, most buyers look at homes in a particular neighbourhood because it matches their price range. If they have a higher budget, they’ll likely want to live in a community composed of similar or more lavish calibre homes.
“You have to pay attention to the price range in your neighbourhood,” says Mihara. “It’s good not to get carried away. In a lot of cases, the more you do, the more it will sink the bottom line.”
Remodelled basements and attics
Are you thinking about clearing out the cobwebs and turning your basement into a cozy living space? Suits say a remodelled basement can help sell your home, but you won’t necessarily recoup all of your money on it. Based on Remodelling Magazine’s data, a midrange finished basement will recoup about 70% of what you spend.
A finished attic offers an even lower ROI than a finished basement. On average, a finished attic costs around $80,000 but only adds $45,000 in value — that’s just 56% of costs recouped. For this reason, only 2% of real estate agents suggest sellers renovate their attic before selling.
When it comes to window replacement, a good rule of thumb is replacing broken or leaky windows. Window replacement isn’t cheap: new windows cost between $200 and $1,800 on average. And while this upgrade increases a home’s marketability, it only recovers a fraction of project cost resale. If your windows are in bad shape, it’s best to upgrade to new vinyl windows since these offer a 72.3% return on average versus wood, which has a 68.9% return on average.
Home improvements that won’t add value – what to avoid when renovating
These are the home improvements that you need to avoid if you want to add value to your property when renovating. Check out a wide range of laundry renovations Melbourne services at Hitch Property Constructions.
GOING OPEN PLAN
Open-living is still extremely popular as it helps to enhance the space and increases natural light. However, taking on this job involves a lot of work, as you will need to knock down a few walls to get the job done. It is also relatively expensive. Furthermore, thanks to the pandemic forcing people to spend a lot more time at home, an open plan home may not be the best choice.
EXTENDING A ROOM (AND LOSING A BEDROOM)
From extending an existing bedroom for more space to create a spacious master suite to creating the ultimate in luxe storage – a walk-in closet – expanding an existing room (and losing a bedroom in the process) is a pretty low investment if you plan to sell your home in the coming years.
Many people dream of having a walk-in wardrobe or expanding their bedroom to make room for their clothes and shoes. However, despite the high demand for storage, you can add 15% more to your property value with extra bedrooms than extra wardrobe space.
INVESTING IN HIGH-END APPLIANCES
If you spend a lot of time in your kitchen and are a keen cook, spending as much as possible on the best appliances may be high on your list of investments. However, if you plan to move in several years, you may want to hold off on those expensive purchases and plump for something a little less high-end.
Some high-end appliances cost double the amount of average devices, despite broadly having the same features, so it’s important to remember that names aren’t everything.
While you can bring your appliances with you when you move house, this isn’t an option when dealing with built-in appliances, and more often than not, it’s advisable to sell your home with all the fixtures and fittings intact.
How Do Home Improvements Affect Value Negatively?
As we’ve said above, there are home improvements that won’t add value. But how do you discern if the upgrades you’re planning will make your house worth more or not? We have a wide range of Melbourne laundry renovations services at Hitch Property Constructions.
The general rule is this: improvements and repairs to your home’s essential elements, such as the electrics, air conditioning, water services, the heating system, the roof and structure (think: failing foundations, damp problems, cracks in plaster and so on) will boost your home’s value, while cosmetic improvements, such as a change of decor won’t have a dramatic effect.