Many home owner are probably thinking about making some home upgrades to attract flocks of admiring buyers. While it's certainly a smart move to make a few improvements, don't overdo it. If you spend stacks of cash on remodelling expenses, you'll probably never recoup your investment.
Before you invest tons of money into an elaborate renovation project, consider what the competing properties in your neighbourhood have to offer. While you want your house to stand out from the competition, you shouldn't make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may even scare off potential buyers.
Find out how similarly priced homes in your neighbourhood measure up, and make improvements based on your specific marketplace.
1. High maintenance upgrades
If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install and maintain. Real estate agents anywhere, except in exclusive neighbourhoods of warm climates, will tell you that a swimming pool can be more of a negative than a positive on resale.
Buyers with young children often steer clear of homes with pools because of safety concerns. In other words, home buyers are more likely to view your in-ground pool as an inconvenience - not a selling point.
2. Replacing a popular feature
Before you consider making a major home change, such as converting your garage into a game room, take a look around. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice. Do you really want to be the only house in the area with no garage? Most homebuyers would prefer to have a sheltered place to park their car than a room to play ping pong and darts.
3. Unpopular upgrades
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 neighbourhood. 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 neighbourhood of small one-story homes.
4. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home 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 and, as a result, are not likely to consider it when placing value on the home.
5. High-End upgrades
A home that has a beautifully remodelled and modern kitchen with stainless steel appliances and new granite countertop can be viewed as a work in progress if the bathrooms remain functionally obsolete. Therefore, the remodel might not fetch a high return if the rest of the home is not 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.
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.
Overall, it's good to put some work into your house before you try to sell it, as it can add value and make it more attractive to potential buyers. However, there are some things that will have the buyer running for the door - or will at least not add anything to the house's closing price. Keep these things in mind when you're getting ready to put up that "For Sale" sign.