6 Home Upgrades that Don’t Add Value at Resale

Investing News

If you’re planning to sell your house, you might be tempted to go overboard with upgrades to fetch the highest price at the closing table. While some projects—such as replacing your garage door or doing a minor kitchen remodel—do add value to your home at resale, others almost never do. Here are six upgrades that seem as though they would add value to your home—but really don’t.

Key Takeaways

  • Some home improvements increase your home’s value, but others don’t.
  • While you and your family will certainly enjoy a pool, prospective home buyers might see it as a safety hazard and a maintenance hassle.
  • Overbuilding for the neighborhood can be a mistake. Buyers generally don’t want to buy a $500,000 house in a neighborhood where the average sales price is much lower.
  • Invisible improvements, like a new HVAC system, usually don’t increase a home’s value.

1. Swimming Pools

No matter how much you and your family might enjoy a swimming pool, before you commit to such an expensive project, it would be wise to consider the costs vs. the long-term value. The installation of a standard in-ground pool costs from $36,750 to $66,500 (plus up to $4,000 per year for maintenance)—and it is unlikely there will be any return on your investment when you are ready to sell your home.

When a pool does increase the value of a home, it’s usually no more than a 7% boost—not necessarily an amount that would make it worth the cost—and even that small return happens only in certain situations:

  • You live in a high-end neighborhood where pools are the norm.
  • The style of the pool fits the neighborhood.
  • You live in a warm climate where you can use the pool year-round.
  • The pool doesn’t take up the entire yard, so you still have space for a play area or a garden.
  • The pool is well-maintained.
  • You can attract the right buyer. Adults without kids may love the idea of a pool; families with young children may be concerned about safety.

In most cases, you should think of a pool as an investment in your lifestyle. Just don’t expect it to be an investment in the value of your home.

Click Play to Learn About the Cost and Value of Swimming Pools

2. Overbuilding for the Neighborhood

If you’re considering any kind of major addition to the structure of the house (an extra bedroom, a home office, or an additional floor), make sure you don’t make another common mistake: overbuilding for the neighborhood. Think carefully about whether the improvements you are planning will make your home fall outside the norm for all the other houses on the block.

For example, a large, expensive remodel—like adding a second story with two bedrooms and a full bath—will certainly make the home more appealing. However, if the rest of the neighborhood has only small, one-story homes, an expensive second floor on your house won’t add significantly to the resale value—no matter how gorgeous it is.

Here’s why. Home buyers generally don’t want to pay $500,000 for a home in a neighborhood where the average sale price is much lower. In general, the price per square foot should align with neighboring homes. Otherwise, your house will seem overpriced, even if it is the largest (or most luxurious) home on the block.

3. Inconsistent High-End Upgrades

Another important rule is that upgrades should be consistent throughout the home—or they will likely do little to increase the value.

In high-end homes, which are usually renovated to a consistent level throughout the property, high-quality upgrades generally do increase the value of the home. Unfortunately, that is not necessarily the case in mid-range houses, where upgrades are often inconsistent.

For example, a home with expensive imported tile in the entryway and a fully remodeled kitchen with stainless steel appliances might still be viewed as a work in progress—if the bathrooms have ancient fixtures and the shag carpet dates back to the 1960s, Unless the rest of the home is brought up to the same high level, one or two remodeled areas might not fetch any return.

Other high-end features that should be evaluated carefully against long-term value are specialized rooms. For example, a media room fully equipped with audio, visual, and gaming equipment certainly might appeal to some prospective buyers, but many wouldn’t consider paying more for a home simply for a high-end media room—especially if they would never use it.

4. Invisible Improvements

Invisible improvements are pricey projects that make your house a better place to live, but that nobody else would notice or care about. It’s great that you just replaced the plumbing system or the HVAC unit, but many home buyers just assume that these systems are in good working order. They will rarely pay extra just because they were recently installed.

Of course, you are smart to make these upgrades to your home—but don’t expect to recover the costs when it comes time to sell. It may be better to think of these improvements as part of regular maintenance, rather than as an investment in your home’s value.

5. Wall-to-Wall Carpeting

While real estate listings may still feature wall-to-wall carpeting as a selling point, more and more home buyers cringe at that upgrade. People are turning away from carpeting because of the dangerous chemicals used to process it, not to mention the fact that it’s considered an allergen hazard—a serious concern for many people, especially families with children.

Not only will you not recoup the cost of wall-to-wall carpeting, but—if carpet is the primary flooring throughout—it can actually lower the value of your home. In most cases, it’s better to remove the old carpet and then restore (or install) wood floors. Depending on where you live, that’s what most buyers prefer—and even expect.

6. Expanded Owner’s Suites

A new owner’s suite with a luxury bathroom and walk-in closet can be a huge selling point that increases your home’s value—but not always. If the expansion of one room turns your three-bedroom home into a two-bedroom home—or if you sacrifice other important living space—you will very likely not recoup the cost at resale.

As a general rule, the more bedrooms a home has, the higher the price it can fetch. If you take away a bedroom, your home will be priced according to homes in the neighborhood with the same number of bedrooms—no matter how beautiful or how large your suite is. Also, the fewer the bedrooms, the fewer the buyers who will even want to view your home, which makes it much harder to sell at your asking price.

Do Home Additions Pay For Themselves?

Not necessarily—especially if you overbuild relative to neighboring homes. For example, if you spend a fortune adding another story to a home in a neighborhood with much smaller houses, buyers will rarely pay a premium price for a home surrounded by much less expensive real estate.

Do High-End Home Upgrades Fetch Higher Sale Prices?

High-end home upgrades can drive up the sale price—but only if the entire house has been upgraded to the same high level. If not, high-end upgrades will do little to increase the value of your home. If a home with a beautifully remodeled kitchen also has ancient bathrooms, the house will likely be viewed as a work in progress—and that expensive kitchen remodel might not fetch any significant return.

Should I Replace the HVAC Unit Before I Sell?

If any essential system (like the HVAC unit) needs to be replaced, you should certainly do it—but don’t expect to recover the cost by getting a higher price for your house. Most home buyers just assume that these systems are in good working order, so they will not pay extra just because they were recently installed.

The Bottom Line

If you’re considering a home improvement project, it’s smart to ask yourself if the upgrade is something you will truly enjoy or if you’re just trying to increase your home’s value. If a pool will give you years of pleasure, you may be able to justify the cost, even if you don’t recoup your money. On the other hand, if you plan to spend tens of thousands of dollars on a remodel just to boost your home’s sale price, you’d better make certain that you don’t choose the wrong upgrade.

When in doubt, compare relevant features in comparable homes in your neighborhood, research real estate trends, and consult qualified experts, including home designers, real estate agents, and contractors.

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