Do you think your bathroom needs some sprucing up? Does your kitchen feel like it deserves a long-overdue makeover? Whether you’re thinking about renovating for aesthetics or for a future investment, the decision to renovate is followed up by the question of “How much?” And this is where things get tricky.
Undoubtedly, a home improvement project is going to cost you money. And if you’re big on the savings department, you’d most likely want to avoid taking a negative step that would hurt your finances in the long run.
Even if your only purpose is to beautify the space, you’d still want to go down the wiser route. But especially if you’re thinking about reselling, you will want to stay away from a bad investment.
Here’s what that looks like.
Going Too Fancy
There’s no harm in only wanting to make your home look good. But if you’re eyeing your home as a future investment, be wary about making over-the-top renovations to your property.
Your best gauge is your neighborhood. A buyer looking for a home to purchase has the lowest possible property price in their best interest. If you’re going to spruce up your home to the tune of $400,000, you will have a hard time finding a buyer if your neighbors’ average home price is only $200,000. Those who have the budget to buy your property are also probably going to look in neighborhoods where that is the average price.
Don’t let your investment go to waste. Think ahead before purchasing those gaudy crystal chandeliers.
Eating Up Lawn Space
Want to add a baby room for the new member of the family? Perhaps a library? While these are all great ideas, it may not be that attractive a decision for your future buyers.
Again, be consistent with your neighborhood. Nobody wants to be the odd one out. Squeezing out lawn space also hurts curb appeal, and that’s one of the first things that create an impression on a prospective buyer.
Making Your Space Too You
Many homeowners are tempted to customize to a fault without thinking about whether the move will give them a good return of investment (ROI). For example, a home theater may give you top-notch viewing experience, but it can cause buyers looking for a raw space to turn up their noses. At best, a home theater can give you only around 25 percent to 35 percent ROI. If this is something you really like to do for your home, look for a more temporary solution.
Installing a Swimming Pool
On warm summer months, your swimming pool can be a coveted feature for splashy parties. But if you live where the sun shies away during most part of the year, having a pool installed may not be a practical idea.
According to Fixr, the national average cost for building a 32-inch-by-16-inch in-ground pool is $22,000 excluding the cost for necessary repairs and recurring maintenance. With an ROI of less than 25 percent, you may want to reconsider adding this expensive feature.
There are some pretty good reasons most buyers shy away from properties with swimming pools. Aside from being notoriously expensive to maintain, swimming pools may be perceived as a health hazard by small families, especially those with kids. Adding a pool also takes up yard space you can otherwise use for family recreation other than swimming (e.g., parties, play space, a garden, etc.). And just like a custom home theater, it does not appeal to everyone.
Luxurious Bathroom Updates
Plenty of real estate articles online may insinuate bathroom upgrades automatically pull up your home value. But the reality is relative. Bathroom remodeling costs an average of $10,229, and most people prefer functional over aesthetic. While a beautiful bathroom has an instant appeal, renovating for the sole purpose of beautification is expensive and hard to recoup should you decide to resell.
If your goal is to simply spice up your bathroom space, there are plenty of ways to make your bathroom look expensive without investing on a full remodel. For example, you can choose to install functional, ergonomically designed macerating toilets, which are not only practical and cheaper but are also easier to install and water-efficient. Or you can opt to have bigger windows and utilize natural light. This is less expensive than uprooting the whole space.
Turning One of Your Bedrooms into Something Else
The more bedrooms you have, the better. Think twice before you build a walk-in closet out of your guest bedroom. While buyers in the past were attracted to hotel-like large master’s suites, the trend is changing. Many families now prefer to maximize space, splitting large bedrooms into two instead of the other way around.
With that said, reducing the number of bedrooms in your home usually hurts its property value, but that depends on how many bedrooms you have to begin with. Most buyers prefer homes with at least three bedrooms. If you have six, it’s most likely that you can get away with eliminating one.
Adding More Rooms to Your Home
Building another room in your home can easily cost around $100,000. While it’s true that more is better, it can be hard to recoup the hefty cost should you decide to sell. However, if you’re only renovating for personal purposes and don’t plan to put your property on the market anytime in the future, adding a room for practical purposes is always up to your decision.
Turning Your Garage into a Living Space
Many home buyers like their garage as they are. This highly valued area, aside from providing a roof for vehicles, is also an extremely important storage space. Taking your garage out of the picture can discourage your prospective buyers with an ROI of only around 60 percent.
Instead of turning it into a living space as what many homeowners do, consider sprucing up your garage door. This move increases curb appeal with an excellent projected ROI of 85 percent to 90 percent. Or you can opt to build a larger garage space.
If you’re absolutely certain that you’re not going to sell, take the liberty to customize. However, if you have other plans in place, like possibly downsizing for retirement, you may want to avoid major home updates.
Avoiding these common home-renovation investment mistakes can save you thousands of dollars if you’re eyeing for a resale. It also helps sweeten your prospects.