Skip These 7 Home Projects — They Won’t Increase Your Resale Value
As a homeowner, it’s important not only to keep your home in great shape, but to also increase its value when you can. If and when you decide to sell, you’ll have already taken care of the ability to get top dollar for your property.
But there are plenty of home improvement projects that just aren’t worth trying when it comes to upping your resale value. Some of them are even counterproductive. Ahead, find some of the projects you’ll want to avoid if you’d like a sweet return on your investment.
Adding a home theater
What buyer wouldn’t like a home theater? Apparently, not everyone is impressed by them enough to pay for one. “A home theater is great in theory as an upgrade, but that is not going to increase your home sale price as one would believe,” says Jason Rowland, a real estate broker at the Rowland Group/Compass in Chicago. That’s because it’s a limited market amenity, and he says many people are not accustomed to having one. “This will not speak to the majority of home buyers, so it won’t create multiple interested parties, it will limit competition — the exact opposite of what you are trying to accomplish,” he says.
Rowland says there’s a simple way to determine if the upgrade you have in mind is a good idea. “Out of the 20 closest people you know, how many of them have this upgrade?” he reasons. “If the answer is ‘zero,’ it’s probably not a viable upgrade that will speak to the buying public.”
Adding a swimming pool
A swimming pool can provide unlimited fun, but whether adding one is a solid choice or not will depend on your location. “Using interior rooms or outdoor space for what the majority of your market is used to seeing is the best course for increasing price and number of interested parties,” Rowland says. In other words, if your neighborhood is full of homes with pools, then adding one would make sense. “If there are no pools in your neighborhood, know that it might not be a value add, as home sales in the neighborhood aren’t going to have comps to support a substantial upgrade in price.”
His view is shared by Eve Henry, a realtor in Prosper, Texas, who says pools can be tricky. “An appraiser will likely be comparing your home to others that have a pool, so it won’t add much value compared to the installation price.”
Here’s something else to consider: some buyers with small children refuse to purchase a home with a pool because they consider it too much of a risk.
Converting a garage
If you’re trying to increase your livable space, why not convert that garage that you never use? Well, Henry says a garage conversion is almost always a bad idea. “You are losing covered parking, which, in most places in the U.S., is one of the most desired features,” she explains. And technically, you may not be increasing your livable space. “Unless you are adding new heating and air conditioning systems, windows, and appropriate roof coverings, appraisers often will not count this additional square footage as living space,” Henry says.
Converting a bedroom
Jaylon Brigham is a real estate broker at Halstead Manhattan in New York. One problem she sees with co-ops and condos is conversions. She says people believe if they convert a 2BR/JR-4 apartment (usually defined as a one-bedroom apartment with a dining alcove that could be used as a bedroom) to a two-bedroom, it will make the apartment compete and price along with true two-bedroom apartments.
This is not the case. “Just because a seller puts up a wall and a door around a 10’ by 8’ area, it doesn’t make the apartment any larger.” That’s because the square footage hasn’t changed, so the seller can’t compete with true 2-bedroom homes that are 20 to 25 percent bigger. “The intrinsic value may go up for some buyers, who, for example, are expecting or planning a baby in the future, or are working from home, but the real value doesn’t,” she says.
Brigham notes you could also lose potential buyers who would prefer the open layout with a separate dining area. “My advice to anyone looking to convert that area into a second bedroom or a study is only to do it because they have a need for it, not because they think their home will all of a sudden be worth 30 percent more, because they’ll be disappointed,” she explains.
Curb appeal is important when selling your home. But if you get carried away, don’t expect to recoup your investment. “I would stay away from re-landscaping an entire house,” advises Jennifer Okhovat, a realtor with Compass in Los Angeles. Of course, you need to maintain the property — which includes keeping the lawn mowed and getting rid of weeds. But she says there’s no reason to overhaul the whole yard before you put the home on the market.
“In the past few years, for example, I have seen clients replace grass lawns with artificial turf — only to have the new homeowner change it back,” she says.
Getting new flooring
Another questionable choice is replacing a home’s flooring. “Unless your flooring is completely atrocious and in a condition that makes the home unsellable, I would personally refrain from changing floors,” Okhovat says. Doesn’t every buyer love new hardwood floors? Perhaps, but your choices may not match their taste. “For example, if you pull out all of your dark hardwood floors and just replace it with new brown hardwood, often buyers will have particular taste in flooring and will just change it when they purchase the home anyway.”
This is something that Rick Albert, a broker associate with LAMERICA Real Estate and investor in Los Angeles, can also attest to. “That money could go to waste, especially if the homeowner went cheap when they should have spent more, such as with laminate flooring versus real hardwood.” Albert advises against spending money on any finishes since your preferences might differ greatly from the next homeowner.
Focusing on the wrong areas
It’s no secret that buyers often make emotional decisions — and kitchens and bathrooms are the areas that tend to sway them one way or the other. However, if you invest in a kitchen remodel but the rest of the house needs work, Albert explains buyers won’t be that impressed. “Plus, if you’re a buyer and the kitchen, or bathroom, or whatever, is remodeled but the rest of the house isn’t, now the buyer has to plan their remodel around the new kitchen to keep it consistent,” he says.