20 Home Renovations with low ROI
Your home isn’t just a source of pride or a place where you can relax after a long day — it’s also an investment in your family’s future. And while it’s natural to want to make improvements to increase your home’s resale value, some renovations will actually cost you money in the long run. Just because you see something as an improvement doesn’t mean a potential buyer will feel the same way. Find out which renovations are ones to avoid.
Lavish Lighting Fixtures
One common home improvement mistake is falling in love with unique or lavish light fixtures, said Alon Barzilay, founder of real estate development company Urban Conversions.
“Whether it be ceiling-mounted lights in a dining room or a hanging pendant, there is a psychological phenomenon that happens when you go to a lighting store … you’re going to pick something exciting and new instead of picking a new addition that suddenly matches the big picture,” Barzilay said.
Further, the passage of trends works against homeowners. “Whatever is in vogue today will look dated 10 years down the road when you are ready to sell,” he said. “Simple is best. Fortunately, lighting can easily be switched out at a low cost.”
Too Much Wallpaper
With its patterns and texture, wallpaper can be an overwhelming design choice for your home. Plus, it’s notoriously difficult to remove. Homebuyers might view wallpaper removal as a potential headache, and it could be the tipping point for someone who wants a more move-in ready home.
Fresh paint and neutral colors are always a good idea to help stage your home when it’s on the market. If you do have wallpaper, think about whether it’s beneficial to remove it and repaint the walls before any showings or open houses, so your potential buyers never have to think about your wallpaper mistakes.
Texture on the Walls and Ceilings
Just like wallpaper, texture on walls and ceilings is difficult to remove. Simply knowing that a time-consuming project lies ahead might cause homebuyers to decrease their offer. Think twice before deciding on a fancy textured painting technique, and play around with textured wall décor instead.
Any over-personalized renovation can hurt the value of a home, especially something like tiling, which requires more effort and money to replace, said Bob Gordon, realtor and blogger at Boulder Real Estate News.
“Many buyers like to upgrade the floors in their homes,” he said. “Adding tile or wood can make an improvement in value — unless you get that person who wants the 1950s diner look and installs black-and-white tile. For their vision, this is the pinnacle of cool. But for a resale value, most homebuyers will see it as a distraction and something they will need to rip out.”
Instead of falling victim to tiling mistakes, consider going with a traditional white tile floor, and buy a rug with the style you’re going for, he recommends. If you don’t want to spend a fortune on a professional to replace the flooring, consider doing this home renovation yourself.
Too Much Carpeting
In an interview with Realtor.com, home remodeling expert Alex Biyevetskiy said that new hardwood floors can increase the sale price of a home by up to 2.5%. Compared to hardwood and laminate floors, carpet can quickly show signs of damage. Plus, colors and textures are highly based on personal preference, and any overly personal touches can decrease a home’s value.
Bright and Bold Paint Colors
Bright and bold paint colors can turn off any potential buyer who might lack a bit of vision. Fortunately, repainting a room before putting your home on the market is an easy fix, albeit an important one. Choose neutral colors to present buyers with a blank canvas, which can help them envision the home in their own style, HGTV recommends.
An Extremely High-End Kitchen
The kitchen is often seen as the heart of a home, and it’s a project many homeowners save up for. The resale value of a major, high-end kitchen remodel is actually less than what you’ll invest in it, however. In 2020, the national average for a major kitchen remodel was $68,490, but the resale value was only $40,127, according to the site Remodeling.
To avoid kitchen renovation mistakes that won’t give you a return on investment, try to focus on which aspects of the kitchen are most outdated or worn. And as tempting as it might be, consider selecting mid-range appliances rather than the expensive high-end options.
A Luxury Bathroom
An upgraded bathroom can certainly add value to a home, but it’s easy to get carried away and take the idea of luxury a little too far. Potential buyers could be scared off by bathroom remodel mistakes like over-personalized finishes and over-the-top whirlpool tubs that are hard to clean and hard for some people to climb into. Instead, consider a walk-in shower, which typically uses less floor space.
Combining Bedrooms To Create a Bigger Room
Combining two small bedrooms to create a bigger room might seem like a good idea to a young couple with no children or to empty nesters whose children have left the house. But this is a bad move if you don’t plan on staying in that home forever, said Brian Davis, real estate investor and director of education of renting resource SparkRental.
“Even small bedrooms add value to homes, as most families want children to have their own rooms but don’t mind if they’re on the small side,” he said. “In my experience, each bedroom can add about 15% to the value of a home.”
Instead of knocking down walls, try simple tricks to make your bedroom space look bigger, like lighter colors and modern, slim furniture.
Michele Silverman Bedell, owner of residential agency Silversons, told MarketWatch that she’s seen firsthand how removing a closet to make room for another upgrade, such as a larger bathroom or bedroom, can hurt a home’s resale value.
“People need closets,” Bedell said. “They’ll walk in and count the number of closets per room.”
A Sunroom Addition
A sunroom can be a great space to enjoy the outdoors away from the elements, but according to Remodeling, a sunroom addition is one of the worst home renovations when it comes to return on investment, with a cost of an addition exceeding approximately $75,000 while only adding just over $35,000 to the value of the house.
Think carefully about how often you’ll use a sunroom before committing to this costly renovation, especially if your home might be on the market soon. Plan ahead to avoid the sneaky expenses that come with renovating your home.
A Built-In Aquarium
A built-in home aquarium can make a home feel fancy and upscale, but it requires constant maintenance and can be costly to remove. Not all potential buyers will want to care for a large tank full of fish or pay for the maintenance that comes along with it. Instead, opt for a standard fish tank to avoid any issues down the line.
Built-In High-End Electronics
An in-house theater is perfect for any movie buff, but built-in or customized electronics that take up space in an otherwise usable room could be off-putting to potential buyers, according to famed home improvement expert Bob Vila. As with all home renovations, personalization can lead to a decrease in home value, and built-in technology that can quickly become outdated is no exception.
A Swimming Pool
Contrary to popular belief, a swimming pool renovation or addition is not the best way to add value to your home. In fact, according to HouseLogic, a swimming pool could increase a home’s value by 7% at most — and that’s only in certain circumstances.
“Unless you live somewhere that’s hot at least six months out of the year, pools are generally more trouble than they’re worth,” Davis said. “The only people who really want them are families with a certain age range of children, so it limits the potential buyers.”
Because of the cost to build a pool, maintenance expenses and a very minor potential value increase, a swimming pool addition simply isn’t worth it for most homeowners.
A Hot Tub
Like swimming pools, hot tubs are a gamble — they take up space and require constant maintenance. Plus, homebuyers with children might consider a hot tub a safety hazard.
If a hot tub is on your list of must-haves for your home, consider a portable hot tub versus a built-in hot tub. You could potentially take it with you when you move, or your home’s new owners can easily remove it if they prefer.
A Garage-to-Gym or Living Space Conversion
For a fitness lover, a garage-to-gym conversion might seem like a wonderful idea. To parents of a millennial who just moved back home, a garage-to-apartment conversion probably seems like a money saver. But future homebuyers might not agree.
Many people search for houses with a garage, and what they’re looking for isn’t a gym or an extra living space — they’re looking for a garage to serve its primary purpose of housing cars and storage items.
If you must use your garage space as a gym or as extra living space, be sure future homeowners can easily and inexpensively remove the renovations.
The Wrong Landscaping Investment
Homeowners are prone to certain devaluing landscaping mistakes in the name of “curb appeal,” said Theodore Beasley of Landscaping London. “Costly landscaping decoration will not increase the value of your home, but rather increase the maintenance required for it. A potential buyer sees this, and it might turn into a concern. Fancy decorative additions that you find attractive are pretty much subjective, as well — including your personal DIY projects.”
Keep your gardens beautiful but simple and easy to maintain, and be sure any decorative additions can be easily removed.
Always think twice before getting into the do-it-yourself home improvement game. Gordon said he’s seen several examples of DIY jobs that have decreased a home’s value.
“I’ve seen plenty of houses where you can tell the owner did the work,” he said. “The owner probably feels she made all the right improvements, but buyers quickly see the shoddy workmanship and unusual finished product.”
There are ways you can increase your home’s value with DIY projects, but you need to be strategic. Gordon went on to recommend hiring a pro the first time out.
“Then ask to be a part of the process and learn from the professional as they do the job,” he said.
The bottom line is that any over-personalization of your home can lead to a decrease in value. Yes, you want to live in a space you love, but think twice before investing in any major or costly renovations. And always make sure your home improvements are completed with the proper permits by licensed professionals.