7 Cautions About Over-Improving Your Home
Home improvement and renovation is big business. Just check out a Lowe’s or Home Depot big box home improvement store for traffic. People want to enjoy their homes, and often that means adding to or remodeling rooms or the entire space to meet their needs or lifestyle. Before you undertake major improvements or renovation, consider these nine cautions though.
-1- Don’t Max Out the Upgrades & Expect a Full Value Return
Nice is great, but too nice can cost you at resale. Maxing out the granite and other material upgrades when something less expensive would do will rarely come back to you in resale dollars. If a material upgrade is important to you for your own enjoyment of your home, that’s fine. But, don’t over-upgrade and expect a dollar-for-dollar return when you sell.
-2- Over-improve for Yourself
On the same lines as #1, you are not going to get back at resale what you spend on top of the line upgrades. However, if it’s an upgrade that you want because it will add to your enjoyment of your home, then the tradeoff can be worth it. Thinking of the improvement as something that will add to your enjoyment rather than one with full resale value is OK.
-3- If Not Staying Long, Leave Things as They Are
Sure, you could spend a ton of money to improve your home for the short time you plan on staying, but you’ll not get back all of that money in a resale. The smarter approach would be to leave things alone and put that renovation budget into a savings account and use it toward the down payment on your next home that has what you want, or renovations on your next home.
-4- Don’t Improve Your Home Out of the Neighborhood
You can find articles everywhere advising home buyers with affordability issues to find the smallest home in the neighborhood to buy. They’ll get their foot in the door and can renovate later. However, if you spend $200,000 improving a $300,000 home in a $300,000 neighborhood, you’re in a losing situation if you sell later. It can actually scare buyers who would not want to buy a home obviously far outside the norm for the neighborhood.
-5- Don’t Overdo a Room
You may enjoy entertaining off the kitchen, but it will usually be a problem if you spend a ton of money enlarging the kitchen and adding expensive upgrades and appliances. If the rest of the home isn’t upgraded as well, buyers later may not have the same lifestyles as you. They may place more value on larger bedrooms or more modern bathrooms.
-6- Smaller Yard Problems
Adding on that room or enlarging your home with significant square footage must reduce your yard size in kind. If you sacrifice some or all of a deck to make the master bedroom larger, you could be sacrificing something the buyer would value more.
-7- Keep Enough Bedrooms – Even if For Other Uses
Though family sizes have been coming down, and in cases of downsizing, it’s still not wise to make renovations that reduce a home to under the neighborhood’s normal bedroom configuration. Even if a future buyer doesn’t need four bedrooms, they may want a home office or man cave. Reconfigure a room if you like but try not to drop below three or four bedrooms with a renovation.
Before you plan a major renovation, run through these considerations for a wise decision both financially and for your lifestyle.