5 Home Improvements That Won't Add Value To Your Home
Spring and Summer are right around the corner, and you may be considering updating your house or moving. While all of these improvements are nice, and can make your home feel more personalized, knowing which home improvements won't add value to your home is vital if you are planning to sell – or considering investing a large sum of money in a home remodeling project.
From large remodel projects to small upgrades, there are lots of changes you can implement that will guarantee you a better return on your investment dollars when you eventually move on.
I’m not saying don’t invest in these upgrades and improvements, but I am saying you shouldn’t expect for these items to increase your homes value when you sell. Here are 5 that don’t statistically add value to your home.
1. Custom luxury upgrades or Improvements that exceed your neighborhood
If you’re thinking about making some extravagant upgrades to your home, be warned that custom, luxury home improvements typically only recoup a fraction of project costs. While an upgraded kitchen definitely will increase your homes value, including top-of-the-line appliances or luxury finishes, don’t always pay off at selling time. For example, according to Remodeling Magazine’s 2020 Cost vs. Value Report, a high-end kitchen remodel only recoups around 54% of the costs, significantly lower than a minor or mid grade kitchen remodel, which recoups 77% of costs on average.
Upgrades that exceed neighborhood standards: While it's important to keep your home well-maintained, investing in upgrades that exceed neighborhood standards may not necessarily add value to your property. It's important to consider the value of comparable homes in your area before making costly upgrades.
So careful think through which upgrades you need or want in your home, before making a decision.
2. Installing a Swimming pool or hot tub
Granted, this one is affected by which climate you reside in, but swimming pools and hot tubs are difficult to get a return on investment. One effect the pandemic has had on our lives at home is that we're spending more time outdoors and improving our outdoor spaces is high on our lists of priorities. Who doesn’t want a relaxing fun environment to be in outside? While these improvement are fun, installing a swimming pool or hot tub can be a complicated and expensive job. In-ground pools typically run between $40,000 - $80,000 Both pools and hot tubs require a fair deal of year-round maintenance, too.Certain buyers will actually be put off by a swimming pool with the amount of upkeep and potential safety hazard it creates.
It's their high investment that makes swimming pools unprofitable. The high price tag means there's little chance that you'll be able to make the money back when you sell.
3. Wine Cellar
Only true wine aficionados would even consider installing a wine cellar in their home, and the cost and expense involved would really have to warrant at least few decades use, too.
The thought of a wine cellar seems great, especially if you have an extensive range of high-quality wines you want to store. However, the cost of installation is exceptionally high - ranging up to $90,000.
It would certainly make a quirky point of interest for a realtor or estate agent, but in truth, unless your buyer shares your love of wine, it's likely to be a hindrance than a bonus.
4. Solar Panels
Solar panels add the least value for potential homebuyers at just 0.5%. This equates to just $1,600 added in value but the job will set you back $6,400 on average, resulting in an overall loss of $4,800. Installing solar panels generally won’t improve your resale value by anything close to the amount you invest. That’s partly because the technology is still evolving.
Solar panels can, of course, cut your utility bills. Improving energy efficiency is always a good thing, and you could be eligible for rebates or tax breaks.
But energy savings can vary widely depending on your home location and positioning, and solar is still a fairly expensive out-of-pocket investment. What’s more, a bump in home value is only possible if you purchase your solar panels rather than lease them.
Purchased solar panels can have around a 10% to 30% ROI, but leased solar panels are a different story. Prospective buyers don’t necessarily want to take over a 20-year lease and can be turned away by the long-term obligation.
5. Home Movie Theater
Here’s a good question to ask yourself when embarking on a home improvement project: Will your upgrade have universal appeal? If the answer is no or you’re not sure, then it’s likely that it won’t improve your home value. The perfect example of this is a home theater.
Creating a purpose-built space that buyers may not use can negatively affect the value of your home. Putting in a home theater or a fixed games room that permanently affects how the room is used, likely won’t bring any added value to your property.
