Home Renovations That Don’t Add Value

by Emily Guy Birken · 16 comments

You will often hear real estate professionals, personal finance gurus, and know-it-all relatives talking about how home renovation choices can affect your resale value. And while I don’t think that these experts are necessarily wrong, they often only tell half of the story. Homeowners should embark on home improvement projects because they want to live with the result, not because they are hoping to make their house worth more. Making decisions about home renovation based on what someone else might like is the way madness and beige carpeting lies.

However, it is important to note that you will never recoup your investment on some projects. If you truly want to go through with these five renovations, go for it! But if you know your time in the house is limited or if you are spending money in the hopes that your home’s value will increase, you’re probably better off just watching This Old House and leaving your home well enough alone.

1. Adding green technology. Sadly, being good to the environment is one of those things that everyone wants but no one wants to pay for. Though the technology for solar and geothermal energy is getting less expensive, these are still projects that will cost you but won’t necessarily impress your future buyers. If you’re thinking of adding solar panels or radiant heating to your home, do it for your own reasons.

2. Installing an in-ground swimming pool. When I was a child, I felt incredibly envious of my (very few) friends who had swimming pools in their back yards. By the time I was in the market for a house of my own, I refused to even look at a home with a pool. For me, the amount of maintenance necessary to keep a pool sparkling and inviting is more than enough to have me keep my membership to the local YMCA current. Add to that my concerns over safety and liability, and I see a pool as a deal breaker rather than a value-adder.

That being said, homeowners who make the $10,000 (or more) investment in a swimming pool who actually use it and enjoy better health because of it are likely to be very satisfied with their purchase. So if you’re thinking about adding a pool, don’t worry about buyers like me unless you don’t think you’ll really use it.

3. Over-improving the kitchen or bathroom. Most people recognize that kitchens and baths sell houses. After all, those are two rooms in your home where you spend a lot your time and where adding furniture is not a viable way to make them more comfortable. So it’s pretty much always a good idea to put renovation money and effort into improving these two areas of the home.

Where you get into trouble is if you over-improve those two areas. Some friends spent over $10,000 improving their master bathroom — adding ceramic tile, a state-of-the-art shower system, custom built cabinetry and a granite counter-top. But their home is a fairly ordinary suburban two-story, so stepping into their bathroom feels like you’ve walked into someone else’s house. Rather than this being a draw for buyers, many people will think “It wouldn’t be worth it to make the rest of the house match that bathroom.”

4. Extensive landscaping. While landscaping your yard can certainly add to your curb appeal when selling your house, elaborate landscaping can end up biting you in the end. Non-gardeners will look at the incredible flowering trees, the sculpted shrubs, and the koi pond and think they don’t want to do the work necessary to keep it up. Gardeners will likely have a different vision for how they want their green spaces to look and will dream of starting the garden over from scratch.

If landscaping is how you beautify your home for yourself, there’s nothing wrong with using your energies outside. But know that it’s likely the next owner will tear out what you have planted.

5. Invisible improvements. These are the bane of the existence of older homes. Almost every year that my husband and I lived in our first house — a 1921 Craftsman style bungalow — we discovered a “hidden” issue that needed to be fixed. These included adding insulation to the walls, re-grading the yard to keep water out of the basement, replacing the roof, and updating our HVAC system. While these improvements were all necessary, we knew that we were doing them for our comfort and to protect our investment in the house. We knew that the money we spent on these projects would not be reflected in a selling price.

These improvements are not exciting like other renovations may be, but they are necessary. Just remember that you are making the improvements for you, and not for future profits.

The Bottom Line

As long as you view your house as a home, rather than as a sure thing investment, you’re more likely to make renovation decisions that will make you happy. And that is what’s important.

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{ read the comments below or add one }

  • donnacanadensis says:

    Structural improvements such as new roof, drainage, electrical, plumbing, etc. (done to local code by legitimate tradesmen and inspected!) are much more important to me. Ceramic tiles, granite counters and bad paint jobs are not going to cut it if the basement smells of mildew. If I buy a house I want it to be sound and I’ll decorate it my way and not because it was newly landscaped, usually with totally inapropriate plants that will either die or become too big. Unfortunately many prospective buyers don’t see beyond the cosmetics.

  • Chris - Canada says:

    I don’t get the whole pool is too much of a nuisance thing. It’s really not that much work, especially considering the return you get on your investment. If you have kids, they learn to swim early on, and to be comfortable in water. I grew up with a pool, and my kids have a pool as well. My oldest is a fish. They spend 2-3 hours a day in the pool easily in the summer – which makes any effort spent maintaining it well worth it. Not to mention those hot, hazy, 35+C days…not a problem when you have a beautiful pool to chill in.

    Agree with the cost being too low here…$25K minimum for an in-ground.

  • Paul Dunbar says:

    A in ground pool system is a lot more than 10K. I’m not sure where u came up with that figure. However make sure you go with salt water and your maintenance is almost nil. I have converted mine to salt water and don’t have o do nothing all summer except add water and throw in the pool cleaner robot once and awhile.

  • c325 says:

    “$10,000 (or more) for an in-ground swimming pool”? WAY more than $10,000. My parents had a large, lovely pool and spa put into our backyard in 1975, and even then it was $27,000. Even in our area of California, where the temperatures rarely get down to freezing, the daily work involved in maintaining the pool and spa are very time consuming and expensive. My dad insists on everything being in tip-top shape at all times, so he does the work himself. While I loved growing up with this wonderful asset, I’d never buy a home with a pool in it. I don’t want that work or expense, nor the fear that someone would fall in or around the pool and sue me. Join the Y, a community pool or country club instead.

  • @damon, based on one of the articles I read while doing research for this, it seems that wall-to-wall carpeting is not something most homeowners will want. So only replace it if it’s something you want. In our case, we were thrilled to pull up the old carpeting and refinish the hardwood floors. We were a little skeeved to find out how much accumulated nastiness was underneath the carpeting, however. It made us decide to never have carpet again.

  • damon says:

    What about carpeting? how much does that effect saleability of the home?

  • Everyone who has mentioned the “impress-the-buyer” factor when it comes to invisible improvements is probably right. We insulated our 1921 Bungalow (most homes built at that time did not have any insulation whatsoever) and our realtor made sure to put that down as one of the “perks” of the house. We didn’t get our money out of that particular renovation, even with the savings in utilities during the years we lived there, but the house was so much more comfortable and the new buyers were pleased that they did not have to insulate. Considering the fact that it took 9 months to sell the house (in a very solid area), I think that the insulation helped to finally make the deal.

  • Jean says:

    I’m all for green technology implemenation on a macroscopic scale like for shopping malls or entire transportation networks but I’ve never seen the point of doing it for my own home, car, etc. as much. Also a good point about invisible improvements. I pay a lot of attention to those are they are very important and integral to the proper maintenance of the house.

    -Jean

  • If you improved the insulation and other energy improvements you might be able to impress buyers with your utility bills.

  • MoneyPerk says:

    Homeowners do get caught up too much in home renovations that they forget to improve the things that do up the price of the home. Like painting the inside and outside of the home could definitely up the price, as well as getting new carpet. I think improving the house operations such as: plumbing and A/C will also improve the cost of the home. The thing is that I would only improve these things if I were to put my house up for rent. Over time I believe it would have a better ROI than just flipping the home.

  • I agree with you that we should improve our homes because we wish to create a home rather than because we think we add value. We did do our bathrooms last year but it was a necessity. You know what I find really funny? How people think that they increase the value of their property by decorating it and all people I know who buy a house re-decorate it first. Thanks for a great post.

  • We recently remodeled our home and took some great advice from our realtor. Remodel your home based on the homes around it. Sure $400 faucets are beautiful, but if you list in a modest neighborhood, you are going to price your home out of the market. You need to make realistic upgrades that will appeal to a large number of people.

  • Emily says:

    In this economy, I’m pretty sure our putting hardwood floors in most of the house is not going to bring any extra when we put the house on the market. And we live in an area that was barely hit by the Real Estate fiasco.

  • @Thad P, thanks for the kind words! I’m a big believer in making your house your home within your budget. We probably put about $20,000 worth of renovations in our first house–the 1921 bungalow–but we did not see that money when we had to sell. It was a little frustrating, but I wouldn’t change any of our decisions. We were making the house ours, and if life circumstances hadn’t taken us away from the area, we would still be there.

    • nadia says:

      While those “invisible” improvements may be unlikley to add a dollar value to a selling price, they probably help close a deal. As a buyer I would feel like I was getting a greater value.

  • Thad P says:

    Great article. We need to make improvements for our own enjoyment, but they need to be improvements that fit our budget (speaking of my wife and myself).

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