There is a general misunderstanding that all home renovations increase the value of your home. This simply is not true. Home renovations that don’t add value to your home are very common. They also do not fully recover your investment. An improvement is only as good as what the next owner thinks of it. If the potential buyer sees the renovation as a constant need for maintenance, they are going to be turned away from it. There definitely are plenty of additions and renovations that add value to your home, but for now, lets look at these examples of risky renovations.
Let’s start with the most disheartening one – the swimming pool. Everyone loves to be in a pool…at least once in a while. It is relaxing, it is refreshing…it symbolizes summer fun. But a homeowner with an in-ground pool has to live with the side effects everyday. A pool is expensive to maintain clean and sanitary. If you have small children, a swimming pool is a potential risk that must be taken into consideration.
A swimming pool can easily be tens of thousands of dollars to put in. This is money that a home owner will never recoup dollar for dollar. It can even be argued that the hazard for small children and the constant maintenance of a pool will negatively affect the time that your home will sit on the market.
In planned communities, most homes have some resemblance and commonalities. But there is such a thing as overbuilding for the neighborhood. This makes the home stand out so far from the norm, that it has a negative effect. When a buyer is looking at your home, they will reference the surrounding properties that are similar and expect to pay prices in the same ball park. This will make those over renovations costs difficult to recover, such as adding a guest home or another floor to the home.
Most real estate agents will tell you “you don’t want to buy the most expensive house on the block“. It makes resale more difficult and attracts unwanted attention, sometimes even exposes you as a target for burglary.
Fancy High End Upgrades
Half the fun of buying a home is moving in and giving it your own flavor. Therefor, a home that has these choices already done for the new home owner might be labeled as undesirable. By undesirable, we mean they won’t bring the seller more money.
Pretty much anything that defines a homes attitude is something you may want to stay away from when selling. New stainless steel appliances for example, aren’t going to drastically improve the value of the home, this is something that new home owners generally want to personalize.
Anything imported…whether it is some form of flooring or fancy rugs, are not going to be on the top of the list that people are going to be willing to pay extra for. In other words, they are not going to raise your homes value.
This one hurts a bit too. Man caves. Decks. These are either something a new owner wants to do their way, or they simply have a different intention for the space. A home theatre setup to the seller might be another bedroom to a buyer. A wood deck to the seller might have to be things to tear out to be replaced by cement by the buyer. These high customizations are nice to have but is not going to be something that a buyer will want to pay extra. They either plan to do it themselves or forgo the whole idea.
There are plenty of renovations that do directly increase the property value of a home, but hopefully we have given the general idea of what isn’t going to give you an immediate ROI. What are some renovations that don’t add value that you have done?