Four Things Believed to Increase Home Value — But Actually Don’t
If you’re a homeowner (or planning to become one), upgrading your home is an empowering activity. Whether you want to knock down a wall (to create a larger room), upgrade your energy efficiency, or improve your lighting, there are a variety of exciting possibilities.
Regardless of your home upgrade project, you’ll likely wonder whether the upgrade will improve your home value. While insulating your attic, remodeling your kitchen, or replacing the garage door can increase your home value, here are five upgrades that may not recover the expenses:
1. Swimming pools
Swimming pools are great during the summer, and swimming is one of the best forms of exercise. But potential homebuyers (especially with children) often view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen.
So think carefully about installing a pool for more than your own pleasure, particularly as it can cost $30,000 to $100,000. An exception is if pools are standard in your neighborhood, such as in hot climates like Arizona and Florida.
2. Major landscaping improvements
Homebuyers appreciate well-maintained or mature landscaping, but adding extensive new landscaping doesn’t usually increase a home’s the selling price. Put yourself in a buyer’s position: if they’re unwilling to commit to maintaining an impressive garden, the garden will quickly become an eyesore. Or the new homeowner may need to pay a gardener to manage it. Because of this, homebuyers often see extensive landscaping as a burden (even if it’s visually impressive) and are not likely to value it.
3. Building more than your neighborhood’s normal houses
Homeowners sometimes make significant (and expensive) upgrades that make their house stand out from others in their neighborhood — such as adding a second story in a neighborhood filled with one-story homes. Think carefully before making these types of major upgrades.
If the average home price in your neighborhood is $175,000, buyers are usually unwilling to pay $275,000 for an upgraded property — instead they tend to seek neighborhoods where the average price is within their range. An exception to this are homes in gentrifying neighborhoods with homes being torn down and rebuilt.
4. Improvements a buyer can’t see
While “invisible improvements” such as replacing a plumbing system or HVAC is an important part of maintaining your home (and can make it better to live in), don’t expect to recover these costs when you sell. Homebuyers expect these features to be in working order, and tend to be unwilling to pay more because you recently installed them.
A limited number of home improvements can increase your home value
Upgrading your home is an exciting part of being a homeowner. But think carefully whether you’re making the upgrades for your own enjoyment or to raise the home’s value.
While glamorous (and expensive) projects like adding a swimming pool may not increase your home value, practical upgrades like insulating your attic can offer big returns.