5 Home Renovations That Enhance Resale Value — and 4 That Don’t
If investing your home improvement dollars wisely is a concern, find out which projects yield the best return on investment when it comes to resale and which give the worst.
Projects That Enhance Resale Value
1. Kitchens. For a tried-and-true method of increasing home value, consider upgrading an old kitchen. Be sure to acknowledge in the planning stages of your remodel — as you make design decisions and choices for cabinets, appliances, plumbing fixtures and countertop materials — whether your priority is following your own design preferences or the return on investment. Either priority is fine, but it should be clear to you what your primary concern is. That way you can find an acceptable balance between the two.
2. More living room space. The simple addition of living room space is generally a very sound investment, as added square footage typically enhances home value. Because the new space will have certain costs associated with it, regardless of the size — tearing down existing exterior walls, new exterior siding, a new roof, a new foundation and most likely new windows — it’s important that the addition is big enough that you get some bang for your buck.
3. Curb appeal. While not judging a book by its cover is sound advice, a lot can be gained by acknowledging the cover’s value. Your home’s exterior is more than a mere first impression. It’s the only impression to the majority of your home’s potential buyers. Luckily, there are many inexpensive projects that can enhance curb appeal, in addition to some more complicated improvements that can pay off as well. One budget-friendly option that goes a long way toward bettering curb appeal is to simply clean out any overgrown brush and add a few new plants to your landscape. Painting is another high-impact improvement that is low-cost. Replacing windows and entry doors are more expensive projects that potential buyers are sure to notice and value. Intricate projects like adding dormers and a front porch are also wise choices from an investment standpoint.
4. Primary bedrooms. Since adults are the ones making homebuying decisions, it only makes sense that they would value the area where they sleep. Whether updating an existing primary suite or renovating and adding a new primary suite, it’s money well spent. Potential buyers will picture themselves enjoying the space and if they like what they see, that translates to value.
5. Bathrooms. Bathrooms get noticed by homebuyers, and although all bathrooms are important, the master bath and powder room take priority. Next in line are guest bathrooms and other secondary baths. For bathrooms, the same general rules apply as to the kitchen when viewed from an investment standpoint. Go with cosmetic changes over layout modifications and minor additions, which are prone to inefficient expenses.
Projects That Generally Bring Poor Resale Value
1. Kids’ rooms. Specialized modifications might bring your kids hours of fun, but may not fare well with potential buyers. For example, a climbing wall for the kids is an incredible addition that could pay off immensely for them in terms of strength and accomplishment. But there is no guarantee that a homebuyer will appreciate it. In fact, a rock climbing wall could actually be a negative value to someone who sees the space being used for another purpose.
2. Swimming pools. With more than 10 million swimming pools in the United States, it’s safe to say that they are well loved. That being said, swimming pools should be built for all their positive qualities that are not investment related. While a pool may boost the value of your home, it’s not likely that it will pay for itself, as many homebuyers see pools as a negative maintenance expense.
3. Taking out features. Removing home features for investment reasons is not recommended. While it might make complete sense to your family to take out an unused fireplace in the basement, it’s always a good idea to consider what the next homeowner might want. A fireplace in the basement might be perfect for them, which means the money you spent to remove the fireplace and renovate the space will not be recovered.
4. Small additions. Adding a few square feet to a bedroom or bathroom is not usually money well spent. Why? Simply put, moving a bedroom wall out a few feet might make the room more comfortable, which would make it worthwhile to you, but the cost involved to see a tiny gain in square footage is just not worth it. For instance, renovating a 2,400-square-foot, three-bedroom home into a three-bedroom home with 2,440 square feet is unlikely to recover the cost of the addition.
Do not let this information dissuade you from following through on a remodeling idea. After all, the functionality and happiness you receive from a new space may make the renovation worthwhile to you, even if the resale value isn’t very good. Whether you decide to move forward with your project or not, you’ll definitely want to make the decision with a complete understanding of the investment value for each dollar spent.