According to Remodeling magazine’s 2020 Cost vs. Value report, an upscale kitchen renovation recoups just 54% of its cost in added value. So think twice before upgrading your space into a fancy, restaurant-style kitchen whose style doesn’t fit in with the rest of the house, or the neighborhood. This kind of kitchen remodel might even deter potential buyers. Focus instead on small kitchen upgrades that could yield a bigger payoff.
According to HouseLogic, installing an in-ground pool might only make more financial sense if you live in a state with a year-round hot or warm climate, or if you live in a higher-end neighborhood where most homes have pools. Your home’s value could only increase by no more than 7% after the pool installation, and only in certain circumstances.
Not to mention, pools are expensive to install, difficult and pricey to maintain, increase your energy costs, and could even raise your homeowner’s insurance. And since a pool could also pose as a hazard, it might be a turn-off for buyers with small children. With its very minor potential value increase, a swimming pool addition may simply not be worth it.
Likewise, any fancy decorative additions you add to make your lawn more attractive may not match the buyers’ tastes. This is why it’s best to stick with keeping your garden beautiful but won’t require countless hours of work. Should you wish to add any decorative window boxes and other lawn enhancements, make sure that they can be easily removed. A well-kept lawn that is easy to maintain all-year round will certainly make a better impression than a backyard with upscale landscaping.
So even if a sunroom can be a great space for you to enjoy the outdoors, think carefully about how often you will use it before deciding to do this costly upgrade. Also, remember that a sunroom can also raise your energy costs in the winter and summer since glass doesn’t provide insulation.
If a hot tub is one of your must-haves, consider a portable hot tub instead of a built-in one so you could potentially take it with you when you move, or the new homeowners can easily remove it whenever they want to. Also, you might want to consider a walk-in shower that many homeowners can use frequently and will appeal to a wider pool of buyers.
Further, don’t get carried away by luxury bathroom additions like waterfall showers and over-personalized finishes that may cater only to buyers with specific tastes.
Before doing any renovations, you need to look at your neighborhood. Look at comparable homes for sale near you and make sure the improvements you’re planning to make align with the norms of your neighborhood, especially since individual markets place different values on different home improvements. And since buyers will also look at the average price of a home in your area, remember to have almost the same features or else your property will be priced out of the expected range and you won’t get your money back.
Especially if you’re planning to list your home soon, the best way to know what you can expect in terms of resale value is talk to a real estate agent who knows your market well. They’re sure to know the local trends and can inform you about how other homes with similar features you want to add are selling. They will also help you compare your home to all the homes that have sold in the last three years to help define its value. This way, you can make an educated decision before you start a renovation that could affect your biggest investment.
Lastly, remember that renovations should enhance your home, not price it out of the local market. So avoid any over-the-top renovation or too much customization that could hurt your home’s value and make it a huge turn-off to potential buyers. If your heart is already set on a particular home improvement project, do it mainly for your own enjoyment but not as an investment, especially if you’re staying in the house long-term.
