If you’re embarking on a home improvement project to simply make your home more comfortable and enjoyable to live in, then when you’re looking at the cost it’s a matter of what you can afford, and what you’re prepared to pay for the benefits the improvements will bring.
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In contrast, if you’re having work done with a mind to increasing your home’s value in a future sale, then you need to take a somewhat harder-headed approach. Contrary to popular belief, not every improvement to your home will be reflected in its sellable value, so if you want to realize a return on your improvement budget, here are four types of project to avoid – and two others to give more serious consideration.
Home Improvements That Make a Poor Investment
#1 A Home Office
You may feel that adding a quiet and comfortable study to your home will make it more attractive, but the truth is that only a small proportion of prospective buyers will truly have a use for such a room. For those who do have a need for it, they’ll probably want to refit their office to suit their own needs and preferences, and for those who don’t, a home study is simply a waste of a room that will need money spent on it in the future to convert it for a more useful purpose.
#2 Extensive, Individual Remodeling and Redecoration
The idea of dream decor can vary considerably from person to person, as anyone who’s viewed a home with a lurid 1970s bathroom suite can confirm. While giving your home a spruce up to make it more presentable may make a sale more likely, it won’t add any significant value to the property – and if you go overboard on a quirky and individual style, you could actually be turning people off and driving the price downwards.
#3 Swimming Pools
Even in those parts of the country that might expect to see it being highly used, adding a swimming pool to your yard is unlikely to represent a solid investment. Not only are they expensive to install compared to any value they may add, but many buyers will be actively discouraged by the prospect of a pool – they represent a lot of maintenance work, and for today’s affluent but busy professionals a gym membership is often a preferable option when it comes to fitness and relaxation.
#4 Improvements Above the Average Neighborhood Standard
Finally, before embarking on any ambitious renovations, look at the average prices of similar properties in the neighborhood. If your planned work will double the theoretical value of a $150,000 home, you’re unlikely to realize that $300k if other nearby properties are nowhere near that price bracket. If you go too far above the local price ceiling, you’re not likely to get all your money back, no matter how desirable your improvements may be.
Home Improvement Projects That Can Show a Good Return and Increase Property Value
There are two main types of home improvement that generally have a decent chance of earning back the money you’ve spent on them. The first is any work which makes your property larger – extra rooms, attic conversions, extensions; all of these will appreciably raise the value of a property.
The second good investment is in modernizing the two most important rooms in most homes, namely the kitchen and the bathroom. Whilst bearing in mind the previous advice about not carrying out too much individualistic decoration and remodeling, no home buyer wants to move into a house and then endure months of disruption as these two rooms, used daily, are torn apart and rebuilt.
It follows that bringing the kitchen and bathroom up to a good, modern standard – although without too many specialist features with only limited appeal – will stand a seller in good stead with prospective buyers, and if you work to a sensible budget, you can expect to see that added value properly reflected in the selling price.
Achieving the price you think your home is worth is inevitably something of a lottery, but if you always bear in mind the broad appeal and usefulness of any improvements you make, you’re less likely to spend more than you can feasibly recoup when you come to sell your home.
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