Home Renovations That Can Hurt (and Help) Property Value

Posted on Feb 23 2017 - 10:57am by Housecall

Port Ludlow, Washington, USA 01/31/2018 Modern home with solar panels on the roof to provide supplemental electricity.

Editor's Note: This post was originally published on February 23, 2017. Housecall continues to share this piece due to ongoing requests and reader interest.

By Brooke Nally

If you’re into renovation projects, then updating and revamping your home can be a lot of fun. But before you get too excited about knocking down walls and setting up a custom movie room, you might want to consider resale value. Flashy renovations don’t always yield the best returns, so you’ll need to take care when picking projects.

To make things easier for you, here are four remodels to avoid and four to invest in.

Remodels to Avoid

Luxury Rooms
An indoor basketball court, wine cellar, sauna, or even a movie theater won’t often recoup the high building costs. Luxury add-on rooms are hard to pitch to buyers unless you’re living in an upscale housing market—the average homebuyer won’t be willing to pay for them. Further, rooms that depend heavily on wired electronics, like home theaters, are hard to keep current because TVs and speakers are constantly advancing.

Swimming Pool
The average cost to build a pool is $39,084, a hefty price tag that is seldom recovered once the home is sold. It’s widely accepted throughout the industry that a homeowner will lose money by adding a swimming pool. Homebuyers don’t want to deal with the maintenance cost of a pool (which can cost as much as $2,000 a year), the added insurance premiums, and—if they have young kids—the safety issues.

Gaudy Accents
Though gold-plated crown molding or mosaic-tile backsplashes may feature prominently in your ideal vision for your home, they often turn out to be the average homebuyer’s worst nightmare. Passing fads or niche trends rarely stick around long, so if you miss the brief window when your remodeling choices are in, you’ll end up paying for it later.

Changes Contrary to Area Standards
If you aren’t watching the trends common to your area, you could end up losing a lot of money. A home that totals $600,000 after all the renovations won’t sell in a neighborhood where homes are netting half that price. Likewise, knocking down the walls of extra bedrooms for an open layout won’t be appealing in a family-oriented neighborhood.

Remodels that Pay

Steel Doors
You don’t want to go cheap on a standard front door. At roughly $1,000, steel doors are comparatively affordable, durable, low maintenance and burglar resistant. As an added bonus, the National Association of REALTORS® reports that steel door upgrades show the highest return on investment of any home remodel, at over 100 percent of the cost.

Solar Panels
As the price of solar panels continues to drop, the energy payback on installing them is becoming greater and greater. The average rooftop solar system is now paid off in seven and a half years. After that, panels are a big money-saving asset. A study by the Lawrence Berkeley National Laboratory notes that homebuyers “consistently have been willing to pay more for a property” with solar panels—a premium of around $4 per installed watt, on average.

Related: Will Your Homeowners Insurance Cover Solar Panels?

New Siding
The exterior of your house is the first thing potential homebuyers see when they come to your home, and you want to make the best first impression. This is part of the reason redoing your siding is so profitable. New siding recoups around 80 percent of the initial cost, according to the National Association of Realtors®, thanks largely to the increased curb appeal and improved energy efficiency it provides.

Broadband Access
Access to broadband speeds is considered an essential utility for today’s connected homebuyer. Research shows that faster internet speeds increase your home value by as much as 3 percent. Homeowners can prepare their homes for higher broadband connectivity by working with area providers to install requisite equipment and wiring. Building out wall ports and cable-hiding baseboards is a good move to attract buyers, too.

Even if you’re not considering selling your home just yet, keep potential selling benefits in mind. Intrepid homeowners know that the best remodels will increase both quality of life and listing price, so take care to invest in projects that will net the biggest returns.


21 Comments so far. Feel free to join this conversation.

  1. Ash West @ The Delightful Home March 8, 2017 at 7:51 am -

    Excellent post! Definitely free-standing wine cellars, saunas or any other “luxury” type room are the way to go. Then you don’t turn off potential buyers (that may have different interests than you), and you have the option to move it into your new home!

  2. Glenda Battle March 10, 2017 at 11:20 am -

    Very good article! Keeps things in proper prospective for future thoughts on renovations for resale.

  3. Christi Borden March 10, 2017 at 3:55 pm -

    Of course, this can vary by location and city. In the Houston area, pools certainly add value and if recent and appropriate to home value and community, can almost pay for themselves when the home is sold. Check with a local expert, i.e. Realtor, to see if your reno plans will attract buyers, add value or detract from both.

    Second, items like steel doors are great unless prohibited by your homeowner’s association. Always check in with your HOA, if applicable, before making any exterior renovation. While in life, it is often easier to ask for forgiveness rather than permission… not so with a strong HOA – who might make you pay to remove or further revise your new project. This can be costly and frustrating.

    • Chris Thompson March 20, 2017 at 10:58 am -

      Excellent points Christi!

    • Dave May 26, 2017 at 10:57 pm -

      Not sure an hoa can tell you what material the door has to be. Especially steel

  4. Elena Quiroz March 24, 2017 at 2:20 pm -

    I agreed with Christi. In Houston pools are a plus and very desirable. Our weather allows homeowners to enjoy the pool extensively around the year, another trend that is taking up in our area are wine cellars or a designated space for wine storage/beer storage. Texans love their wine! So that adds value in our area.

  5. Mary Doolette April 26, 2017 at 9:03 am -

    Nice article. Even garden that is well designed and maintained offers you an ideal place and increases the value of your property, especially if you intend to resell your home in the future. We are looking for residential landscaping services in Sydney for renovating our house and remodelize into new design. One of my neighbour suggested
    Gardening Northside gardening services provider. Looing forward to it

  6. Larry Hankins May 9, 2017 at 3:39 pm -

    I can do renovation loans for FHA, Conventional and VA loans. A renovation maybe what a property needs to get it updated so it will sell for top price. Or make the home a more ideal home for a potential buyer.

  7. Damian May 27, 2017 at 3:10 pm -

    Improvements are not always a dollar for dollar return. I agree with most that every market is different. That said, you should consult a local professional real estate appraiser about the economics of your proposed project.

  8. karl reichert May 27, 2017 at 3:20 pm -

    I believe being strait up with somebody is the best way for a renovation to run smoothly nothing hidden . Honesty & integrity

  9. Matiss July 28, 2017 at 5:11 am -

    Sometimes, these home renovations are done particularly with a resale in mind. Other times, they’re simply done to suit a homeowner’s personal preferences. Either way, it’s important to keep your home’s resale value in mind, and do your research before investing in any home improvement updates.

  10. Scott Williams November 21, 2017 at 10:04 pm -

    Interesting article with lots of good insights. Much depends upon the standards and buyer desires of the area and neighborhood within which the house is located. In Wisconsin (my state) a pool is a huge loser, but in Florida it is completely different. In our town, most (but not all) improvements are losers, it is just a matter of by how much. My rule of thumb is that if the owner will continue in the house and be able to get 75% or more back at sale, the project makes sense. In my experience as an appraiser, most owners do not have a realistic idea of how much an improvement will add to the sale price of the house.

  11. Eva del Rosario December 29, 2017 at 2:37 pm -

    Great articles with good insights. Definitely helpful for homeowners who wants to renovate their home before selling.

  12. Violet February 8, 2018 at 4:52 pm -

    It all depends on location. House without a pool in South Florida do not sell as well, have lower re-sale price and longer market time. House with pool in IL or WI will sell for less and in longer market time. Solar panels are a personal choice, I would never buy a house with solar panels, as I would never buy a house without a solid roof – skylights – and I know many people who do not care for solar at all. I would not buy a house with whole house generator. But sauna, wine cellar and steam room would bring me to see the house on the very first day it is listed.

  13. Joseph Ianiro February 9, 2018 at 8:02 am -

    Often overly done and overly costly improvements cannot be re-couped… such as a $50000 patio where the average is a modest $5000 patio in the neighborhood.Outdoing neighbors’ patios with gaudy fountains statutes etc that are not becoming of the neighborhood are not impressive to buyers. They want to “fit in”

  14. Darlene February 20, 2018 at 5:40 pm -

    Hi I am thinking of painting- what colors are the new trend! Increase the value?

  15. gunsafely March 10, 2018 at 9:25 am -

    I concur with most that each market is unique. All things considered, you ought to counsel a neighborhood proficient land appraiser about the financial matters of your proposed venture.

  16. Michael Singh April 12, 2018 at 12:40 pm -

    A new front door is a great idea if it is an updated/modern look that your potential buyers would like. Fresh paint is also money well spent.

  17. Kevin Polite June 12, 2018 at 10:11 am -

    I sell and build in an area where most buyers don’t have kids yet and are close to transit centers so many of the concerns about kids are not a consideration. I’ve taken 3/1 and made them 2/2 with a master suite and that buyer profile lives them.

  18. Mary villasenor April 2, 2019 at 2:06 am -

    Renovations might not increase the value of a property, they can help a property to stand out from the other competitors on the market.

  19. Steve Braham August 21, 2020 at 4:35 am -

    Awesome post. Thanks for sharing with us.