Property Renovations That Can Affect Your Home’s Value

by Stacey Doyle on 2011-04-274

Despite rising foreclosures and lowered home values, real estate may still appeal to a lot of people as a solid investment. The same goes for certain home renovations, which could actually increase or lower your home’s value. How much your home will fetch in the market depends on many factors, such as current demand, location, the basic characteristics of your home and the amenities you’ve got. While having a lot of cool features in your house may seem like one way to boost its value, you’ll need to be careful about what it is you add on, since not everyone shares your taste. Seriously now, maybe you should think twice before painting your house purple even if your zoning laws allow it? ;-) Or is that built in hot tub really as highly desirable as you think it is?


A while ago, we wrote a piece on home improvement projects and their return on investment, where the basic message to increase your home’s value was pretty simple. According to HomeGain.com, you’ll get the biggest bang for your buck if you:

  • Clean and declutter your home before you show it. It has a 586% ROI.
  • Brighten your home and keep it light and airy. It has a 313% ROI.
  • Stage your home nicely. 299% ROI.
  • Put in some nice landscaping. 258% ROI.
  • Make repairs to your plumbing or electrical systems. 181% ROI.

If you notice, a lot of the fixes here don’t need to be huge. I would focus on those items that address the functional issues of your house, such as its electrical or plumbing infrastructure. When something is clean and bright, it comes across as fresher and newer (than the home actually is), so just doing a once over on your house seems like a simple and straightforward way to score some points with home buyers.

Home Renovation Costs That You May Not Be Able To Recoup

A lot of us think that by “fixing” our homes for resale, that we couldn’t possibly go wrong. Unfortunately, adding on new features to your home can actually have negative effects on its valuation as there are certain changes that may not be as popular among many home buyers as you may think. The key is to improve your house with features that the average home buyer will appreciate. What would the majority of home shoppers want in a house? Here are a few thoughts on home renovations that you should watch out for:

A Pool or Jacuzzi Isn’t For Everyone

You may wonder: once you install a pool, can you count on your home valuation to appreciate? Allow me to share my story: when we bought our house, it had a huge above-ground swimming pool. The first problem occurred before the closing when the inspector insisted on a separate fence around the pool. While the yard is fenced, the pool area was not. The seller had to install a temporary fence to qualify the house for sale to us.

The pool problems continued after we moved in. A frigid winter meant that the pool was covered in ice, causing the liner to split. When summer arrived, we had two active pre-schoolers who didn’t know how to swim. The pool had to go and we took the time (and coughed up some cash) to remove it right away.

Years later when the kids learned how to swim, we invested in another above-ground pool and a hot tub for our outdoor room. We soon learned that these upgrades might not add to the value of our house (and may in fact be detrimental to us) when we sell our home. The cost of ongoing pool maintenance deters many buyers, which is something we, in fact, experienced when we first moved into this home.

While an above ground pool lowers the purchase price of your home by about 2 percent, an in-ground pool can add up to 10 percent to the value of your home (which I think is debatable). However, you need to find a buyer who views the pool as an asset rather than as an expensive maintenance issue.

Custom Rooms (Such As A Specialty Game Room)

Your specialty room can become a buyer’s headache. While you might wish for an indoor basketball court, it might not be a room many others would want. Potential buyers will be tallying the cost of disassembling the court and renovating the room to their liking, perhaps for use in some other capacity.

If you have a basement, garage or extra room, consider using it for general purposes. Make it into an office, craft room, sewing room or workshop that can appeal to a larger number of possible buyers.

If you intend to stay in your home for a long time, then sure — treat yourself to the custom room of your dreams. Just realize that you’ll likely reap more emotional rewards than financial ones from your home improvements.

A Gourmet Kitchen Isn’t for Everyone

For years, you may have dreamed of an oversized stove, huge refrigerator/freezer and a kitchen isle with a built-in cutting board. While you might like to cook for a crowd, potential buyers might be the take-out types.

Most potential buyers want a clean kitchen with updated appliances. A gourmet kitchen could be over the top for the average home buyer. Unless you run into another cooking or party enthusiast, don’t count on getting a full return on this investment. In fact, it could even deter some of those non-cooking types who would prefer to buy a house with a less costly kitchen.

Unless you intend to stay put in your home and entertain guests for years to come, a less expensive kitchen renovation offers equal functionality with less financial loss.

Big Bathroom Ideas

Many buyers are usually content with having standard sized baths. An increasing number of green home buyers may not bode well for the demand for decadent showers and fancy hot tubs. Also, if the bathroom fixtures in your home (for sale) tend to use more water, then budget-conscious buyers will probably skip your home.

Keep your bathroom renovations basic to realize a return on these essential renovations. There is a fine line between an updated bathroom and going over the top.

Carpeting & Other Flooring: No Need To Fuss

If you’ve got carpets, then see if you can get away with just a good cleaning. If there are heavily stained or dirty areas, then replacing your carpets with something neutral and simple will be sufficient. A lot of people may not care for the floors you already have and decide to rework it to their liking. Wooden floors can be touched up with a good clean and light sanding — no need to go overboard on this.

Walls Should Be Neutral

Custom paint colors, wallpapers and tiles may become points of contention when your home is for sale. If it means that your home buyer will have to shell out some money to remove the stuff you’ve installed in order to make your rooms “unique”, then your walls may actually enter into your pricing negotiations. While it’s great to customize your home to address your particular likes, just remember how it can play a part in your property’s selling price later.

Bottom Line? Before you sink money into your home, carefully weigh the value of the renovation versus its potential financial return. Do your research on this matter before you go ahead and sink in some of your hard-earned bucks into what you think is an investment. It may turn out to be just a waste of money!

Copyright © 2011 The Digerati Life. All Rights Reserved.

{ 3 comments… read them below or add one }

Pamela April 29, 2011 at 4:30 am

Really good post. So many people just assume all their renovations will recoup their time and money.

I’d also suggest you carefully review information about current real estate listings in your area before making upgrades. In my neighborhood, playful color schemes are expected and neutral paint would be considered blah. Also, buyers in my upstate NY town are very interested in energy efficiency so real estate agents are highlighting those features in their listings.

The other thing I’ve noticed is that very well-maintained houses sell the fastest and for the best price. The best use of your money might be to hire a home inspector before you put a house on the market and repair everything she notes in her report.

Jo May 4, 2011 at 2:34 pm

I think your mileage will vary with certain home improvements, based on your location. I live in South Florida and a pool is pretty much “de rigueur” for single-family homes, for most folks (you will notice this next time you fly over West Palm Beach, Miami or Fort Lauderdale). Sure there are a few people that do not want a pool, but those buyers are few compared to those that do.

thehouseflipguy June 5, 2011 at 4:40 am

I agree with the other people commenting. You really cannot accurately predict what a home renovation will do to your value with any certainty. The home market is volatile so what it might do is help your home sell quicker — which is often a good result of the work you put into your house.

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