When you engage in home improvement projects, you’re doing one of two things:
- trying to enhance its value and appeal because you’re selling your home and want a good return on investment as you’re attracting potential buyers
- performing home remodeling projects for your own safety and comfort, perhaps so you can age at home
Here’s what isn’t very likely: that you’re doing home improvements with the goal of lowering the value of your home or otherwise choosing ones that are a financial drain — but sometimes that’s exactly what happens. Here are four examples.
Reducing the Number of Bedrooms
Perhaps you’re thinking about knocking down some walls and combining two bedrooms into one to create a nice-sized master suite. That may sound logical, but according to NextAvenue.org, when a home has more bedrooms, it tends to have more value. Plus, by shrinking the number of bedrooms, you’re likely reducing the number of home buyers willing to take a look. There are some buyers, a real estate expert says, who won’t even look at a two-bedroom home — or a three-bedroom one — even if it has a spacious master suite.
If you’re thinking about making a big master bedroom, consider your motivation. If it’s because you want one and you plan to age in that home, then this may be a reasonable home improvement to make. But if you’re doing this home remodeling to attract a buyer, your money may very well be better spent elsewhere.
Transforming Your Garage into Living Space
You might be planning to turn your garage into a guest bedroom, making it available when family members visit, or as an extra space for the family to gather. Again, consider your motivation. If you’ll be selling your home, know that 74% of home buyers recently said that having a garage was either very important or extremely important to them. This transformation into extra living space might significantly reduce your pool of potential buyers and may make it difficult for you to get your cost recouped.
Performing an Extreme Kitchen Remodel
Investing in an attractive kitchen can add to the appeal of your home, so it might seem logical that the more you invest, the better off you are. According to an MSN article, you can actually lose out as far as return on investment goes with an ultra-high-end kitchen remodel. In 2015, for example, the average large kitchen home remodeling project cost $56,768 but only provided a resale value of $38,485.
Adding a Swimming Pool
Perhaps you want to add a swimming pool for your grandchildren to enjoy when they visit, or maybe it helps with your arthritis. While this may make sense for your lifestyle, it’s unlikely to add much value to your home. In fact, a swimming pool may add only 7% to a home’s value — and that’s if you live in a climate that’s hot at least six months out of the year. That doesn’t describe Northeast Ohio!
Plus, there are maintenance costs to consider and the safety hazard issues that come with owning your own pool, which may also narrow the number of potential buyers.
Home Improvements That Can Add Value
This post isn’t intended to discourage you from home remodeling. There are several projects that can provide a very nice return on investment, going significantly beyond just getting your costs recouped when selling your home.
Investopedia.com shares several of them:
- Wooden deck addition: 80%-85%
- Siding replacement: 75%-83%
- Minor kitchen remodel: 75%-83%
- Bathroom remodel: 70%-78%
- Major kitchen remodel: 70%-78% (doesn’t say extreme!)
- Attic bedroom remodel: 65%-76%
- Basement remodel: 65%-75%
- Two-story addition: 65%-74%
- Garage addition: 60%-70%
Each time you consider a project, mull over motivation. Are you staying in the home or looking for a potential buyer? In either case, you’ll want to address safety hazards, and it always makes sense to at least think about return on investment. Beyond that, how much you spend and how you spend it should dovetail with your goals and plans.
