If you’re thinking about selling your home, it’s always a good idea to put work into your home to help it sell. Yet aside from touching up paint and decluttering, you may be wondering what more you should do to add value to your home. You aren’t alone. A Houzz survey shows that 22 percent of homeowners who want to renovate their homes say a return on investment is the top motivation.
However, not all renovations are equal. In fact, when you consider that many homeowners sell within an average 5-year timeframe to ensure they break even, some home renovations might be more worthwhile than others. For example, the National Association of Realtors (NAR) reported in its 2022 Remodeling Impact Report that refinishing hardwood floors has a 147 percent cost recovery rate. If it makes financial sense, those are the renovations to consider. However, the following 5 renovations are the ones you should avoid so you get the best return on investment when you sell.
Installing a swimming pool
Swimming pools grew in popularity across the Triangle during the COVID-19 pandemic as people were looking for ways to stay home and enjoy outdoor activities. While this was a common trend, it’s not necessarily a wise investment to add a pool if you’re looking to sell anytime soon.
Nationally, in-ground swimming pools are nearly $60,000 on average. Yet the return on investment of a swimming pool is between 15 to 25 percent of that investment. Think twice before trying to gain attention in the market with a swimming pool that won’t pay off when you go to sell.
Building a sunroom
If you’re adding a sunroom to your home to enjoy it for yourself, it can be a good investment toward your personal satisfaction. But if you’re considering adding a sunroom to add value to your home before you sell it, that may not be the smartest use of your money.
On average, a sunroom costs $30,000 to add to a home, and the average return on investment is 60 percent. While the increased square footage and extension of the outdoor in might seem like a benefit when selling your home, it won’t add enough to make it worthwhile if you’re looking to sell not long after this type of addition.
Adding on a primary suite
The addition of a primary suite with a full bathroom can significantly increase the value of your home down the road. But if that’s a consideration you’re making before you sell, you may want to think again about whether it’s a wise decision. It may take some time before that price increase is evident.
The addition of this type of room can cost over $300,000. However, the return on investment is minimal, and typically homeowners will recoup less than half of the financial investment they put into the home. If a room addition is something you’re considering, make sure you stay in the home longer-term to get the most out of your investment. It will pay off in the long-term, but not immediately.
Creating a luxury kitchen
A new kitchen is a selling point for many potential buyers. However, kitchen renovations and upgrades typically get a 67 to 75 percent return on investment. That means a mid-range or smaller kitchen renovation may help you get a decent return. However, putting your dollars into a high-end kitchen might not pay off when you sell.
The USA Cabinet Store reports that the national average for a major remodel was $70,000 in 2022. However, the return on this investment was between $34,500 and $41,400. A smarter investment would be to prioritize refreshing a kitchen instead. Consider refinishing cabinets, replacing countertops, changing out light fixtures and backsplashes, and updating knobs and pulls. And if you’re thinking about replacing appliances, avoid the high-end appliances and instead get mid-range ones to get the most money out of your investment.
Replacing windows
There are many incentives available to homeowners who are interested in replacing their windows with energy-efficient windows. But unless you’re considering staying in your home for several more years, it’s likely you won’t see any of the financial benefits that come with replacement windows.
The cost of windows varies based upon the type of windows you want and how many windows you’d need to replace in your home, so the up-front investment may vary. However, the cost recovery on this type of exterior home project will only give you a 63 to 67 percent return on your investment.
It pays to make smart investments
The NAR reports that there are specific renovations you can make that will always pay off. A new roof, upgrading insulation, and either new or refinished hardwood will result in a 100 percent return on investment. Any other repairs or updates may be a gamble to see whether they will pay off in a current market. If you have any questions, consult with a trusted real estate agent to see what types of renovations will help you as you look to sell your home.
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