Myth: All home upgrades will increase your home’s net value.
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Truth: You’ve just wasted your time and money.
Yes, like your teacher always told you, it is a free country, and you are definitely more than welcome to make any kind of upgrade you want to your own house. But unless it was just for the sake of your own pleasure, I wouldn’t advise the following renovations, simply because addition does not equal profit.
However, if you are wishing to upgrade your house’s net worth (beyond the cost of the initial renovation itself), you should definitely keep in mind that some upgrades that may seem valuable to you might not be of any significant worth to potential buyers. So here are three of most common upgrades that quite possibly won’t see a return on your investment.
3 Property Upgrades That Add Little to No Value to 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.
Related: The Top 7 Upgrades Tenants Seek When Searching for a Rental
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. If you do decide to add a pool, make sure it is a desirable home feature in your local market amongst buyers.
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, I would recommend thinking long and hard about renovations that are too “custom designed.”
Related: The Top 5 Items to Replace or Upgrade in Every Rental Property You Buy
Over-the-Top Luxury
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.
Conclusion
If you think there is the slightest chance of selling your home in the future, think first before making costly upgrades. The worst thing you can do is dump your hard earned money into renovations that won’t benefit the value of the home if you decide to sell.
Investors: What would you add to this list?
Don’t forget to leave a comment!