Myth: All home upgrades will increase your home’s net value.
Truth: You’ve just wasted your time and money
It is a free country, and you are more than welcome to make any kind of upgrade you want to your own house, but unless it is for your own pleasure, the following renovations, simply do not equal profit.
However, if you are wishing to upgrade your house’s net worth (beyond the cost of the initial renovation itself), keep in mind that some upgrades that may seem valuable to you might not be of any significant worth to potential buyers/renters. So here are three of the most common upgrades that probably won’t see a return on your investment.
Addition of a Pool
Honestly, pools are quite the toss up when it comes to the value of the house. It is possible that
you might see some sort of return for this addition, but more often than not, it would not even be
enough to pay for the addition itself. This is because having a pool onsite could be a turnoff to some potential buyers. A large proportion of homebuyers do not wish to have to keep up with the maintenance of the pool, and those on tighter budgets would most likely not want to cope with the extra expenses that come with owning a pool. Not to mention, it poses as a safety hazard for potential buyers with young children.
Highly Customized Designs
Be sure to stay FAR away from designs that are too personalized. This is purely because your
idea of a dream kitchen might not be everyone else’s idea of a dream kitchen. So unless you are
planning on living in your house for many years to come, think long and hard about renovations
that are too “custom designed.”
Always remember the personality of your neighborhood when you are contemplating an upgrade
because if your upgrade is too over-the-top for your area, you will be causing the alienation of
buyers on two fronts: those potential homebuyers that like your neighborhood might not be able
to afford your house, and those potential homebuyers that can actually afford your house would
probably prefer to live in a more luxurious area. So being slightly nicer than the surrounding
houses can work in your favor, but being a lot more lavish will not.
If you think there is the slightest chance of selling your home as an investment property, think
first before making costly upgrades. Avoid dumping your hard earned money into renovations
that won’t benefit the value of the home if you decide to sell/rent.
Ideas by Sterling White and biggerpockts.com