There comes a point in everyone’s life where they at least think about doing some type of renovation to their home. Your house could be outdated and badly needed upgrades or maybe you are just tired of the same o’l look. Whatever your reason is behind doing upgrades you must always keep resale value in mind. Renovations that decrease property value should always be avoided regardless of how much you fancy it.
A good strategy to successfully upgrade your home is to personalize it to your liking without making it so unusual that it detracts other potential owners. Customizing rooms to your aesthetic satisfaction should be safe since these decisions can normally be reversed with just some paint or minor changes. Now remodeling a garage into a bedroom is irreversible so you must take into account the effect it will have on property value.
Before undergoing any renovation project you need to do conduct some research on the real estate market in your area. Basically you want to get a feel for how much houses are selling for and what is a typical size house. Use this information to get an idea of how much you should be spending on renovations. In general you should not be spending more than 10% of the houses value for any upgrade. This means you can forget about kitchen and bedroom remodeling unless the average house in your area is selling for more than $400,000.
Costly Renovations That Decrease Property Value
- Home Offices – While each year the percentage of people that work from home is increasing it is still only 2.9% of the workforce. Turning that spare bedroom into office space could be an expensive mistake. Decreasing the number of bedrooms in your home is always a bad decision and will cost you about 10% of your property’s value.
- Combining Rooms – I say again, the more rooms the better. It may seem like one large room is better than two small rooms but it will really hurt your property value. On the flip side you can expect a 15% increase in value if you can turn a large room into two.
- Garage Conversions – Looking to add an additional room and gain that 15% increase in home value? Converting your garage is not an option. 75% of people that buy houses say that a garage is a must have for a home. Potential buyers will definitely need that extra storage space and place to park their vehicles.
- Built-In Devices – Who wouldn’t want a home movie theater or an aquarium built in the wall? These things take up space, use energy and require maintenance and that will worry the majority of buyers. These things are also very costly to remove so potential owners will want nothing to do with them.
- New Carpeting – While this upgrade will look great right after installation it is not going to last long. Carpet is a risky renovation because it shows sign of use quickly and widely differs in personal preference. 54% of people are willing to pay more for hardwood floors so let’s skip the carpeting upgrade.
There are plenty of small renovations that can be done to fulfill your urge to upgrade your home. The simpler and cheaper costing projects are a lot safer in protecting your investment. Not only do they save you cash but they are also easy reversible. In closing, just remember that your home is an investment and all renovations should be increasing market value to your asset.