When does an upgrade lose you money?
Unless you plan to live in your home forever, it’s worth considering other buyers when renovating your home. Below are five upgrades that won’t add value to your home when it comes time to sell.
- Overspending on minor details
When renovating your home consider its ARV, after repair value. What is the highest price your home could sell for? Look at prices of other homes in the neighborhood. Get a feel for common materials in these homes. Upgrading a kitchen can add a lot of value to your home if done right. For instance, when upgrading your kitchen consider budget items that sell well in your neighborhood. Unless you live in a million-dollar home, you don’t need all marble counter tops, and the buyers looking at your home probably won’t want to pay for them either.
- Adding small amounts of square footage to your home.
Say you want to add more square footage to your home, great! Each additional 1,000 square feet of living space increases selling price by about 3.3% according to a 2005 study by the National Association of Realtors. However, if you choose to do so without making major changes you could disrupt the floor plan and it could be costly. Square footage additions become less costly the more square feet you add. Therefore, adding just a few feet here and there is less likely to pay off.
- A Pool
Depending on where you live a pool can add value or detract from the sell-ability of your home. Pools come with a significant amount of upkeep and extra costs. Maintenance and safety are two large factors to consider when considering whether or not to add a pool to your home. If pools are common in your neighborhood and city adding a pool may be worth considering. If not, we recommend putting money into other aspects of the home like the kitchen or bathrooms.
- Specialized Rooms
A movie theater, recording studio, and home office all sound like positives to add into your home right? Wrong. To appeal to the mass amount of buyers stray away from putting in “hobby-like” rooms. Or when crafting these rooms make as many of the changes easy to remove when you are ready to sell. Typically buyers like to see 2-3 bedrooms and 1-2 baths and maybe a bonus room that they can convert into a room of their choosing.
- Customized Colors, Materials, and Designs
Material and color selection is an upgrade that can end up costing you when you sell your home. If your choices are deviant from neutral and typical colors seen in homes today, you could end up losing buyers when you sell, or paying extra to re-paint and re-tile, etc. For example, when selecting counter top colors or trim colors, bold reds are generally not a good idea. Keep in mind that unless this is your forever home, it will belong to someone else later down the road.