Not all home improvement projects come with a high return on your investments. In fact, some home renovations can be downright disastrous for your budget and home value if you don’t do some careful research in advance to avoid throwing your money down the drain.
It’s all about home-buying trends and preferences of potential buyers in your area. While “smart” appliances and home security upgrades are currently popular, you might be surprised to learn that luxurious additions to your home or backyard might actually hurt your home’s resale value!
Why? Because buyers increasingly want low-maintenance homes for affordable prices, rather than flashy décor and immaculate landscaping that will require tons of time, effort, and money to maintain.
If your own personal preferences are irrelevant because you primarily want to increase your home’s value, then be sure to avoid these home renovations that offer a terrible ROI.
Worst Home Renovations for Return on Investment
According to remodeling.com, bathroom renovations and additions cost much more than they offer in home valuation increases. You may recoup anywhere between 45-70% of the initial cost of upgrading your shower, bathroom lighting, or adding an entirely new bathroom to your home.
This means you’re most likely to lose money on a serious bathroom renovation, so unless you need to replace the plumbing for safety and functionality purposes, you’re better off leaving your bathroom alone and saving money for other, more valuable additions to your home.
As Forbes points out, carpeting isn’t as valuable as it used to be. People are increasingly concerned about chemicals used to manufacture carpeting, as well as the issues of cleanliness in comparison to floors composed of tiles or wood. If you’re planning on staying in your current home and want nicer-looking floors, then by all means, go ahead and install new carpeting.
However, if your primary objective is increasing your home’s value, then be wary of carpet additions because the color and texture you chose might backfire when it comes to attracting potential buyers. You might be better off accepting a slightly lower price and letting your buyer decide what to do with the flooring instead of blowing your renovation budget on an upgrade nobody wants anyway.
In 2018, the home improvement project with the biggest cost/value difference is a backyard patio addition. According to remodeling’s national figures, a backyard patio costs an average of $54,130 but only offers a resale value of $25,769.
This means you recoup less than 50% of the money you paid for this renovation, so unless you and your family truly want a backyard patio, you should seriously reconsider your options to protect your home’s value and your wallet over the long-term.
Unless you live in an area with hot summer weather and a plethora of home-buyers clamoring for homes with pools, then swimming pools are likely poor investments.
Pools cost thousands of dollars to design and install, and you have to constantly maintain them. Many homeowners opt to hire a professional cleaner to regularly maintain their backyard swimming pools, but this also costs quite a bit of money!
Then there’s the issue of who actually uses the pool and how often. If you have kids, do you think they’ll still be using the pool as frequently when they’re older? What about during cold weather months, when you still have to maintain the pool but can’t really get much use out of it?
If you and your family love swimming but your nearby swimming options are limited, then perhaps a backyard pool could be worth the expense. But if you simply want to increase your home’s value, then it’s best to steer clear of this high-cost, high-effort investment.
As with swimming pools, people really don’t want to expend a lot of extra effort to maintain the exterior of their homes. While Americans are still obsessed with lawns, we’re also increasingly mindful of drought conditions and water conservation efforts. As a result, more and more homeowners are turning to low-maintenance, low-cost landscaping solutions that incorporate more native shrubs and trees, more rocks, and even artificial grass to save money on gardening fees and water bills.
Just because you love spending hours per day in your garden doesn’t mean your home’s prospective buyers will share your passion for landscaping. Keep this in mind before deciding whether you really should bring all those water-mooching plants into your yard for future homeowners to presumably enjoy.
There are plenty of ways to increase your home’s value, just as there are plenty of ways to save money on home expenses by not renovating certain areas at all. It ultimately depends on where you live, what your current housing market is like, and how much you’re willing to lose on repairs and renovation projects that you’ll enjoy only as long as you own the home.