Whether your home doesn’t suit your needs or tastes anymore or you’re thinking of revamping it to get a better dollar when you sell, there are dozens of upgrades that you can make to your home to improve it. The question is, which upgrades are worth the money spent, and which ones are money pits that won’t allow you to recoup your investment?
Of course, a number of factors will dictate what upgrades are better investments compared to others, such as location, market conditions, and preferences among buyers. As a general rule of thumb, the ROI of an upgrade will be a lot lower if it doesn’t accurately reflect the standard in your area.
Having said that, there are certain upgrades that more than likely would turn out to be bad moves as far as ROI is concerned, regardless of the location or market.
1. Getting Rid of a Bedroom
You might not have any use for that extra bedroom and would rather use it for a walk-in closet, but eliminating this type of important space could lower your home’s value. If the norm in your neighborhood is three bedrooms, for instance, turning your home into a two-bedroom property will significantly limit your pool of buyers.
Bedrooms are critical spaces in a home that more often shouldn’t be eliminated. If the standard in your area is three bedrooms, that is likely what buyers will be looking for – and expecting – when they’re looking to buy. They probably won’t have the same affinity for that spacious walk-in closet if it means sacrificing a much-needed bedroom.
2. Over-Improving the Kitchen
Kitchens are one of the most important spaces in a home and are crucial selling points. A fully upgraded kitchen can add a great deal of value to a property. But taking things too far on a kitchen renovation can put you at a disadvantage, especially if the neighborhood doesn’t call for such extravagances or the kitchen’s level of sophistication doesn’t match the other rooms in the home.
You can successfully upgrade your kitchen without completely gutting the space or adding over-the-top finishes and amenities. Swapping the countertop for granite, changing the light fixtures, redoing the backsplash, and refacing the cabinets may be all that’s needed to transform the space without dumping a huge chunk of your capital in a total renovation project.
3. Installing Built-In Electronics
You might be tech-savvy and enjoy the idea of having just about everything in your home controlled electronically, but these systems are very expensive. You probably won’t get the money back that you spent installing all those electronics at the point of sale. Not only that, you might be eliminating many buyers who might not be as technologically sophisticated as you and aren’t comfortable having to fiddle with all those gadgets just to open the window shades or unlock the garage door.
It should also be noted that electronics become obsolete every few months, if not sooner. That means whatever you install today will probably be overshadowed by something newer and better a few months down the road. It would be really expensive to have to constantly upgrade all those built-in electronics that often.
4. Making Behind-the-Scenes Improvements
Cosmetic finishes are easily noticed and appreciate by buyers. They love to see new hardwood flooring, gleaming kitchen countertops, or upgraded light fixtures, and they’re often willing to pay top dollar for them. But this isn’t always the case with improvements that aren’t visible. Things like upgraded insulation, a new HVAC system, or updated plumbing are important, but because they’re not outwardly visible, many buyers might not necessarily be impressed enough to dish out the extra cash.
These types of improvements might be required or might even make the home more comfortable, but the costs associated with them probably won’t be recouped when it comes time to put your home on the market. Buyers usually just expect them to be in decent shape, but won’t necessarily pay more just because they’ve been recently upgraded.
5. Adding Expensive Upgrades That Are Inconsistent With the Rest of the Home
A common misconception among homeowners is that high-end finishes and updates significantly increase the value of a home. But this isn’t always the case, especially if the upgrades made don’t match the rest of the home.
A property with a gorgeously updated bathroom chock full of high-end features like marble counters, glass-enclosed showers, and top-of-the-line faucets and shower heads may sound amazing, but they will do little to boost the value of your property if the rest of the home is in need of some TLC. Likewise, beautiful quartz countertops and porcelain tiles in the kitchen will be offset by cabinets that leave a lot to be desired, and can actually diminish the value of your house.
Whatever work you plan on doing in your home, make sure that it’s consistent with the finishes and features of the rest of the property. Or else, you’re just making your home feel somewhat lopsided and unfinished. If necessary (and if your budget permits), you may want to think about updating your entire home to ensure consistency. Just make sure that you’re not over-improving your home if the neighborhood doesn’t call for it.
The Bottom Line
The thought of dumping a lot of money into upgrading your home and not recouping those funds when you sell is a tough pill to swallow, but it is a reality in many cases. Before you take hammer to nail, make sure you’ve carefully considered how such improvements will affect the value of your home, and what the odds are of getting that money back upon the sale of your home. Work with your real estate agent to decipher what improvements you should focus on, and which ones you should just leave by the wayside.