Menu
Finance and Business
Browser Extensions That Save You Money
Playoff Perks For Pro Athletes
6 Financial Benefits Of Spring Cleaning
How The 2014 Obama Budget Could Affect Your Finances
How To Profit From Risk
What Buffett Would Say To The 50K’ers
How Spring Cleaning Can Make You Money
The Most Expensive Sports Trophies
How To Buy Annuities (And When Not To)
The Economics Of Stay-At-Home Moms
6 Tips For Selling Your Home Fast
6 Things You Think Add Value To Your Home - But Really Don't
Making It Big On Wall Street
Predict Inflation With The Producer Price Index
10 Great Summer Jobs For Teens
The Cold, Hard Facts Behind Funding Your Retirement
The Role Of Parents In Financial Education
Broker Commissions Are Here To Stay
Money Tips To Stretch Your Retirement Nest Egg
4 Traits Banks Look For In New Staff
Earnings Guidance: Can It Accurately Predict The Future?
Is Real Estate Ever A Wise Investment For Retirees?
Get A Bank Job In 50 Days
The Diner's Guide To Tipping
6 Things You Think Add Value To Your Home - But Really Don't
Every homeowner must pay for routine home maintenance, such as replacing worn-out plumbing components or staining the deck, but some choose to make improvements with the intention of increasing the home's value. Certain projects, such as adding a well thought-out family room - or other functional space - can be a wise investment, as they do add to the value of the home. Other projects, however, allow little opportunity to recover the costs when it's time to sell.

Even though the current homeowner may greatly appreciate the improvement, a buyer could be unimpressed and unwilling to factor the upgrade into the purchase price. Homeowners, therefore, need to be careful with how they choose to spend their money if they are expecting the investment to pay off. Here are six things you think add value to your home, but really don't.

1. Swimming Pools
Swimming pools are one of those things that may be nice to enjoy at your friend's or neighbor's house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen. Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer's offer may be contingent on the home seller dismantling an aboveground pool or filling in an in-ground pool.

An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That's a significant amount of money that might never be recouped if and when the house is sold.

2. Overbuilding for the Neighborhood
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighborhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighborhood of small, one-story homes.

In general, homebuyers do not want to pay $250,000 for a house that sits in a neighborhood with an average sales price of $150,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $250,000 in a $250,000 neighborhood. The house might be beautiful, but any money spent on overbuilding might be difficult to recover unless the other homes in the neighborhood follow suit.

3. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home's value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.

4. High-End Upgrades
Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the '60s. Upgrades should be consistent to maintain a similar style and quality throughout the home. A home that has a beautifully remodeled and modern kitchen can be viewed as a work in project if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.

In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.

5. Wall-to-Wall Carpeting
While real estate listings may still boast "new carpeting throughout" as a selling point, potential homebuyers today may cringe at the idea of having wall-to-wall carpeting. Carpeting is expensive to purchase and install. In addition, there is growing concern over the healthfulness of carpeting due to the amount of chemicals used in its processing and the potential for allergens (a serious concern for families with children). Add to that the probability that the carpet style and color that you thought was absolutely perfect might not be what someone else had in mind.

Because of these hurdles, wall-to-wall carpet is something on which it's difficult to recoup the costs. Removing carpeting and restoring wood floors is usually a more profitable investment.

6. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice - or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.

The Bottom Line
It is difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home's value when it comes time to sell. There is no simple equation for determining which projects will garner the highest return, or the most bang for your buck. Some of this depends on the local market and even the age and style of the house. Homeowners frequently must choose between an improvement that they would really love to have (the in-ground swimming pool) and one that would prove to be a better investment. A bit of research, or the advice of a qualified real estate professional, can help homeowners avoid costly projects that don't really add value to a home.

Print

How Much Should You Have In Your 401(k) To Retire?
Consequences Of Maxing Out Your Credit Card
Use Caution Trading Pink Sheet Stocks
New Tax Rules Target The Top Tax Bracket
Top 4 Most Competitive Financial Careers
The Best Entry-Level Finance Jobs For 2013
5 Ways To Increase Your Chances Of Getting A Job After College
Is Higher Education Still A Good Investment?
Why You Shouldn't Worry Too Much About New Student Loan Rates
How To Make $1 Million In Finance
Why Clients Fire Financial Advisors
Share 0 Disqus 6 Tough Questions To Ask Before Retirement
Retail Banking Vs. Corporate Banking
How To Be A Top Financial Advisor
The Basics Of A 401(k) Retirement Plan
How To Write An Effective Investment Banking Resume
The Benefits Of An Accelerated Bachelor's/Master's Degree
How Long Will You Work When You Should Be Retired?
The Importance Of Work Experience For Students
8 Clear-Cut Ways To Becoming A Better Saver
The Pros And Cons Of Pension Maximization
Top Business And Finance Degrees For 2013
Will 2014 Mark The Return Of The CD?
How Summer Businesses Survive
Social Finance Careers: Creating A Better World
How To Match Your Savings Goal With Investments
Investment Tax Basics For All Investors
Should You Borrow Money To Make Investments?
Menu
5 Secrets Credit Card Companies Don’t Want You To Know
What Determines Your Cost Basis?
Should You Buy An Annuity?
When To Buy A Mutual Fund
How Financial Advisors Are Leveraging Social Media
Maintaining Work/Life Balance For Financial Professionals
5 Financial Gifts Dad Really Wants
The Father's Day Index 2013: Dad’s Value Is Up!
Networking For Financial Professionals: Maintaining A Strong Industry Presence
4 Reasons Why Your Credit Card Company Thinks Your Card Is Stolen
Can Financial Education Rebuild America’s Economy?
4 Ways To Take Your Career To The Next Level
The Hidden Fees In 401(k)s
Is It Foolish To Strive For The American Dream?
5 Easy Fixes For A High Summer Electric Bill
Commuters' University: On-The-Road Learning
What Is The Federal Employees Retirement System (FERS) And How Does It Work?
Summer Money-Making Opportunities For Finance Students
Unexpected Challenges For Self-Employed Finance Professionals
3 Financial Tasks We Think Are Harder Than They Really Are
How To Survive When Prices Double Every Day And A Half
5 Budget Tips For Your European Backpacking Trip
The Financial Fallout Of The DOMA Repeal For Same-Sex Couples
5 Overused Resume Phrases