Homeowners who renovate only to boost resale value should aim for a return on investment (ROI) of three dollars for every dollar invested. Resale renos should be neutral in colour and conservative in tone so they appeal to the maximum number of potential buyers. And, cost control always trumps elegance.
In fact, some renovations can actually damage your home’s value. These supposed improvements not only add nothing to your bottom line, they may make your home less attractive to potential buyers and bring down its value. Here are seven such expensive mistakes to avoid.
A pool will chase away numerous buyers due to maintenance, public liability, insurance and local government laws regarding fencing and safety barriers. Don’t waste the money.
Skip the Sunroom
Unless you want the exposure to nature, avoid this addition which yielded only 48.7 percent ROI according to Remodelling magazine’s 2015 statistics.
Some homeowners see converting a garage as a cheaper way to add more living space than building an addition – and it is. But, many buyers prefer a garage to protect assets from the cold and snowy conditions. And, a garage is much more valuable than an extra room.
Fancy Faucets and Lighting Fixtures
For kitchen or bathroom renos, avoid ornate fixtures for two reasons. First, you reduce the pool of buyers due to the cost. Second, stylized fixtures will appeal only to a small number of potential buyers, those who share your taste, further reducing your chances to sell.
Eliminating a Bedroom or Powder Room
In older homes, combining smaller rooms in the public living space might add to the value and appeal to homeowners who like large, open spaces. Eliminating a powder room, however, is a bad idea. And turning a bedroom into a master closet or combining two bedrooms to create a large master suite may not pay. As Kevin Brown Jr., president of Praedium Real Estate Services points out, “You’ve eliminated a whole living space.”
A basic make over is the surest way to make money back from your outdoor outlay. Avoid overspending.
Things That Are Invisible
Adding insulation, window upgrades, or air conditioning does not increase the value of a property as much as some sellers believe. This type of feature can add to the marketability, not the value.