Top 5 Renovations to Avoid Before Selling Your Home
The internet is filled with advice on ways to increase the value of your home quickly before you sell. Common wisdom suggests spending your money on upgrading kitchen and bathrooms…but is that true? What renovation projects should you absolutely avoid because they’re a bad return on investment? Information in this area can be a little murky, so we here at Amne dove into some of the national housing data for mid-range homes and put together a list of the top 5 renovations to avoid before you put your house on the market.
According to Metrostudy (one of the industry’s largest residential data providers with information gathered on more than 100 million households) the average master suite addition comes in at a whopping $120,000. However, your return on investment at sale is a measly $78,000, meaning you only recoup about 65 percent of your investment. One possible reason for this could be you may be pricing yourself out of your own neighborhood. If you’re increasing the square footage of your home, buyers might feel like they are then overpaying for the location and make you low-ball offers. Of course, it’s pretty unlikely you’d want to make this type of huge renovation just to sell.
Sometimes common knowledge can lead you astray. Across the country, homeowners spend $16,000 on typical bathroom remodels but only see on average a $12,000 return at the time of sale. Upgrading your bathroom will certainly make your home more attractive to buyers and easier to sell, but at the end of the day it just doesn’t seem to translate to higher offers. Beware this trap and invest your money elsewhere!
Hardscaping your backyard can be surprisingly expensive, especially if you include built-in cooking areas with gas, electrical and water lines. You can only expect to receive around a 65% return on these type of renovations. On average, they have a price tag of $52,000, resulting in an average loss of $23,000. There may be a few reasons for this. First of all, you’re not adding to the initial curb appeal of your home. Backyard patios don’t lend “wow factor” when buyers pull up for the first time. Secondly, backyard spaces tend to be very personal and subjective. Hardscaping that you think looks amazing may turn off potential buyers who prefer more natural scenery.
Backup Power Generators
The second worst way to add value to your home before you sell is installing a backup power generator. These natural gas powered units are able to provide electricity to your home when the grid goes dark. While we appreciate them greatly in the South (air conditioning and refrigerated food rate highly on our list here in Austin in the summer when there are brownouts!), people shopping for homes just don’t get excited about them. Expect to spend around $13,000 to install one of these puppies and only receive about $7,000 in return. And the number one renovation to avoid when selling your house is…
Adding a bathroom on to your home can be extremely expensive. The data estimates a standard addition at around $43,000. This is due in large part to all of the trades that are necessary for the project: carpenters, architects, plumbers, electricians and the rest. Ultimately, you’re spending all of that money on a very small percentage of your home, and sellers are only willing to reward you for a cringe inducing 53.9 percent of your effort. Avoid at all costs if you’re renovating to sell!
Of course, all of these numbers are based on averages collected from across the country, and this is only intended as a general guide to warn you about some of the pitfalls of renovating. Your particular home selling situation is special and might require a unique approach. If you only have one bathroom in your home and all of the comps in the neighborhood have two, you may be best served by adding a bathroom. And there’s always a chance that you find a buyer who is over the moon for backup power generators. Last but not least, if you’re planning to stay in your home for a few years, the enjoyment you get from your new renovations may make the investment worthwhile even if you don’t make your money back.
The experts at Amne are always happy to talk with you about the renovations you’ve made to your home. If you’re planning to sell your home in the near future, please visit us and get a free offer today! Learn more about what we have to offer here.