Before jumping into a home remodeling project, think hard about the reasons behind your proposed renovations. If an anticipated big payoff at resale time is one of your top priorities, you might want to reconsider. While many home improvement projects will add value to your home, most will give you less than a 50 percent return on your investment. Here are a few of the biggest home improvement losers:
- Swimming pools. The high cost of pool construction virtually assures that you won’t get your money back at resale. The exception to this might be if you stay in your home for many years and the neighborhood holds its appeal. In addition, pools shorten the list of prospective buyers. Many prospective buyers don’t want the maintenance headaches and the liability, especially if they have young children.
- Room additions. Just about any room addition is guaranteed to bring an underwhelming value at resale. The worst of the bunch is indoor sunrooms. Adding a new master bedroom suite, extra bathroom or converting a garage into a room are all money losers. If you choose to do one of these, do it for the added enjoyment. Don’t expect to cash in big later.
- Professional kitchen or bath remodels. If you don’t have do-it-yourself skills, a kitchen or bath remodel done by the pros will almost certainly set you back far more than the potential resale value. A major remodel costing more than $50,000 will recoup maybe 60 percent of your investment. The only time this makes sense is if you’re doing the project for yourself.
- Replacement windows. Unless you live in an old house with drafty single-pane glass windows, replacing all your windows will not pay off at resale. Improvements in glass technology and frames can save you money in energy efficiency but, again, not enough to recapture your investment dollars.
So, what home remodeling projects will payoff in the long run? A modest kitchen or bath do-it-yourself project, a landscape redesign, fresh paint, attic insulation and a new front door are all examples of modest investments that will increase the saleability of your home and not break the bank. Read more about improvements that provide a return at resale here.