5 Bad Home Renovations That LowerYour Home’s Value

A sold sign in front of a home | Photo by Justin Sullivan/Getty Images

Sprucing up your house before you put it on the market is smart, but homeowners who hope to selltheir property (http://www.cheatsheet.com/personal-finance/5-mistakes-people-make-when-selling-a-home.html/) for top dollar should beware of bad home renovations. Rather than adding toyour home’s value, these misguided upgrades, from quirky paint colors to single-use customspaces, can make your property less appealing to picky buyers.

When planning a renovation with an eye toward resale, “It’s essential to understand whathomeowners in your area value long term and not just put trendy appliances and finishes in thatwill only look fresh and new for a very short time,” Colby Sambrotto, president of USRealty.com(https://usrealty.com/), told The Cheat Sheet.

But even well considered renovations don’t usually pay for themselves, according to Remodeling’sannual Cost. vs. Value report (http://www.remodeling.hw.net/cost-vs-value/2016/). In 2016, the onlyhome upgrade that added more value to a home than it cost to put in was fiberglass attic insulation,

Megan Elliott July 19, 2016

which cost an average of $1,268 and added $1,482 in value at resale. Other high-value renovationsincluded adding a steel or fiberglass entry door (91% and 82% of cost recouped, on average) andreplacing a garage door (90-92% of the cost recouped).

In general, you get more bang for your buck with smaller, less flashy renovations. A $20,000midrange kitchen remodel adds about $16,700 to your home’s value, a payback of 83%. You’ll getabout 20% less back from a $60,000 kitchen upgrade at the midrange level. What about bathroomupgrade or additions? You’ll only get back about 57% of the cost when you sell your home if you gohigh-end, and 66% for a midrange update.

Shoppers at a Home Depot store | Photo by Joe Raedle/Getty Images

Don’t let those numbers frighten you off home renovations, though. Even if you don’t get back yourentire investment, upgrades are often worth it. Aside from making your home more pleasant foryou, giving your kitchen a refresh can help sell your house faster, since many buyers will be turnedoff by laminate countertops and beige appliances. “If you have a dated kitchen … and a buyer walksinto that kitchen, they’re going to think that in order to redo that kitchen, they’re going to have tospend $40,000 or $50,000,” Steven Aaron, owner of the Steve Aaron Realtor Group at KellerWilliams Beverly Hills, told U.S. News & World Report (http://money.usnews.com/money/personal-finance/articles/2014/03/06/which-home-remodeling-projects-are-worth-your-money).

Other quick-and-easy fixes can make your home much more appealing. A fresh coat of paint andspruced up landscaping can do wonders, Sambrotto said, while installing energy-saving applianceswill save both you and buyers money.

Unfortunately, not every home upgrade is really an improvement, at least when it comes to yourhome’s value. If you’re thinking about selling in the near future, here are five bad homerenovations you should avoid.

1. Getting too fancyOver-the-top renovations can backfire in a big way if they don’t fit with the neighborhood. Aswanky luxury kitchen in a neighborhood full of $200,000 homes doesn’t mean your house willsell for $400,000. Buyers shopping for more affordable homes are likely to be turned off by thehigh price, while those with a bigger budget are probably looking elsewhere.

“You definitely don’t want to be the nicest house on the block; you won’t bring up your neighbors’market value, but their more average houses may pull down the value of your house,” Sambrottosaid.

2. Making your yard smaller

A for sale sign in front yard | Source: iStock

Think twice before you swap green space for a new family room. Home expansions that eat intoyour yard can hurt your home’s value more than they help. “While some families want some kind ofoutdoor living space, you’ll detract value from your home if your futon squeezes out play space,lawn, pet areas, and gardens,” Sambrotto said.

Again, you want to keep your renovations consistent with the neighborhood, according experts.“Stand on the sidewalk and look at the other houses,” Katie Severance, co-author of The CompleteIdiot’s Guide to Selling Your Home, told Bankrate (http://www.bankrate.com/finance/real-estate/cautions-about-overimproving-your-home-1.aspx#ixzz4En4yjjIM). “Is what you’re planningconsistent with the scale of the other houses?”

3. Too much customization

A home that is too “you” can turn off buyers looking for a space to make their own. You might loveyour in-home recording studio, basement gym, chartreuse walls in the living room, or hand-painted mural in the entry, but buyers may turn up their noses.

“If you install a huge commercial stove and oversized ventilation hood because you and your familylove to make gourmet meals, chances are that most buyers would rather have a smaller, easier touse stove and more counter space,” Sambrotto said. “When you invest in truly customizedupgrades … you might not get a quality return on your investment.”

Sellers also tend to overestimate the value of costly custom upgrades to other buyers, causing themto make pricing mistakes. “If they have sought out a unique feature, and paid for it, they think it’svaluable and will overprice the home because of it,” Brendon DeSimone, real estate expert withZillow, told CNNMoney (http://money.cnn.com/2014/12/04/luxury/luxury-home-customization/).

4. Installing a swimming pool

Man cleaning a swimming pool | Source: iStock

Unless you live in a warm-weather state, backyard pools (http://www.cheatsheet.com/money-career/how-much-does-it-really-cost-to-maintain-a-pool.html/?a=viewall) tend to be bad homerenovations, not good ones. The average in-ground pools costs nearly $40,000 to install, accordingto U.S. News & World Report (http://money.usnews.com/money/personal-finance/articles/2015/05/19/the-real-cost-of-owning-a-swimming-pool), and the costs don’t stopthere. You also need to factor in regular maintenance and higher insurance premiums. Manybuyers will rather pass on property with a pool than deal with the headaches. Others see pools as asafety hazard. Bottom line: While a pool may be fun for you and your family, don’t expect it to adda lot to your home’s value.

“It’s not something that’s value-enhancing to a lot of people,” Sabine H. Schoenberg, a home

improvement expert and founder of SabinesHome.com, told U.S. News.

5. Reducing the number of bedroomsWhen it comes to bedrooms, more is usually better. Turning a spare bedroom into a walk-in closetor master suite sitting room tops the list of bad home renovations you can make, especially if yourhome now has fewer bedrooms than similar properties.

“When you start eliminating bedroom space, you’ve completely changed the comparable value ofyour home in the neighborhood,” said David Pekel, president of Pekel Construction andRemodeling, told Marketwatch (http://www.marketwatch.com/story/renovations-that-decrease-a-homes-value-2015-11-16). However, if your home has half-a-dozen small bedrooms, you may beable to get away with eliminating one without hurting your home’s value.

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