Home owners renovate their homes with things that are important to them. Those updates are not always important to the general public. Many times those updates cost more money that what you can recapture when you sell your home. Below are some updates that DO NOT pay off.
1. A Luxury Kitchen. Kitchen updates do pay off, but you have to temper your kitchen dream. You will not get a $10,000 return for your $10,000 Wolf 6 burner range with a double oven. Remodeling Magazine's Cost v Value report says, "An upscale kitchen renovation recoups just 54%of its costs in added value." The imported Italian marble countertops will not pay for themselves. Go with a less expensive granite and GE instead of Wolf.
2. Do It Yourself Painting. I painted the master bedroom in my first home a lime green color in 2000. Unfortunately, I was not a good painter. I got many splotches of lime green paint on the ceiling. The farm house red in the living room did not help me sell that first house either. After several months, and a professional paint job, we sold the house. It could have sold much sooner with a good paint job from the beginning.
3. Expanding a Master Suite. I showed a home in North Chattanooga a few years ago that used to be a 3 bedroom home, but the owner decided to combine 2 of the rooms into a large master bedroom with a huge walk-in closet and a master bathroom. There is a big difference in price between a 3 bedroom home and a 2 bedroom home in North Chattanooga. Essentially, the owner made the home worth less with their remodeling. In certain neighborhoods, my wife and I have remodeled a 5 bedroom home into a 4 bedroom home with a master suite. In that neighborhood and with family sizes being smaller today, that made sense.
4. Wall-to-Wall Carpet. This one is pretty obvious. Most home owners want hardwood floors today. Opendoor says that carpet as the primary flooring in a house drops the value by $3,900. The National Association of Realtors says that home owners recoup the entire cost of refinishing hardwood floors. Installing hardwood floors gets you $1.06 for every dollar spent.
5. A Swimming Pool. A majority of home buyers see a swimming pool as a money pit dug in their potential back yard. The biggest mistake that I see in an entry level home is a pool in the back yard. When the home goes up for sale, most of their would-be buyers pass. In an upper-end home, a pool is a nice luxury although it does not always completely pay for itself when you sell the home.
Make Sure The Update Is Worth It. Ask your Realtor if an update will pay for himself. I love it when clients call me and ask me if the update they are thinking about it is a good investment. I encourage clients to do so.
Compare Home Features in the Area. See if your update will be unusual for the neighborhood or if your home will be the nicest home in the neighborhood.