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.