By: Amber Hunt
Many homeowners purchase a house with renovations in mind. You may need to put some work into your house before it lives up to its full potential. Before you start knocking down walls, make sure you are aware of the renovation’s return on investment.
It’s also smart to begin any home improvement project with an idea of how much room your house has for improvement. Use free online resources to get an estimate of your home’s value, information about recent home sales and an analysis of your home loan to ensure you’re not over-improving your home and that you can afford renovations.
While every home situation is different, here are seven renovations that may not pay you back when it’s time to sell:
1. Home office remodel – According to Remodeling magazine, the average cost of a home office remodeling job (including wiring for Internet access, multiple phone lines and customized cabinets & desk) is about $10,526. On average, 55 percent of home office remodeling costs are recouped in the resale value of a home. If you want to spruce up your home office without a large investment, stay away from custom built items.
2. Sunroom addition – Many people believe that sunroom additions will cost less because they don’t require heating & cooling, are smaller and generally don’t have a bathroom. However, little extras and labor costs can easily add up and generally don’t return on the amount invested.
3. Bathroom addition – Sometimes additional bathrooms are needed, especially if your family has outgrown the number of available bathrooms in your home. However, they tend to require a lot of costly work and generally only return a fraction of the investment.
4. Garage addition – Building a garage is basically like building a house for your car. It often requires builders to pour a foundation, construct walls and build a roof along with many other labor intensive efforts. The worst part is that homeowners generally recoup only 62 percent of the average costs, which are around $58,000.
5. Master bedroom suite – Master bedrooms can also be similar to building a small home, depending on how elaborate you want to get. Adding bedrooms can add value to the house, but the costs are even greater. The average cost per square foot varies, but anyway you look at it – you’re likely to lose money.
6. Fiberglass entry door – If you’re going to upgrade your door, don’t choose the higher-cost fiberglass alternative to a heavy steel door. Steel doors will provide greater security and weather-resistance and tend to return a 29 percent gain on the investment.
7. Swimming pools – Pools can be fun but they shouldn’t be added to a home in hopes that it will boost the value. Many people see the pool as a burden when they are home shopping and focus on the maintenance costs and even possible hazards they present.
Before you get started on any home improvement be sure to consider its potential return. If you decide to move forward with any addition, you may want to think about refinancing as a way to fund your improvements. Whatever you decide, make sure you are making choices that will increase a home’s value rather than harm it.
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