6 Renovations that can actually lower the value of your home.
Some renovations can actually damage your home's value. These 'improvements' not only add nothing to your bottom line, they may make your home less attractive to potential buyers and lower its value. How much these renovations hurt a home's value will depend. If the home is in a highly desirable location, potential buyers may be willing to overlook pink walls or poorly hung cabinets. In a subdivision where many similar homes are for sale, one bad renovation may cause your home to linger on the market for far too long and sell for below market value.
Renovations are always best when done neutral, tasteful, and keeping within the home's character. Trying to incorporate a ultra contemporary kitchen in a traditional Victorian home may disrupt the flow and 'feeling' of the home too much, leading to a disconnect between rooms. Considering a more transitional design would allow the homeowner introduce a flair of modern without giving the home a 'split personality'.
Here are six renovations that can really hurt your home's resale value:
Converted garage. Some homeowners see converting a garage as a cheaper way to add more living space rather than building an addition, and it is, but most buyers would prefer a garage, especially in our climate.
Eliminating a bedroom or powder room. In older homes, combining smaller rooms in the public living space might add to the value because today's homeowners like large, open spaces. Eliminating a powder room, however, is a bad idea. Also, turning a bedroom into a master closet or combining two bedrooms to create a large master suite may not pay off in the long run. By cannibalizing a powder room or bedroom, you make your home marketable to a smaller group of potential buyers.
Over-personalization. We all want to make our homes into our signature spaces, but some unique features may turn off potential buyers. Anything that is too personal or too specific will not appeal to the broadest pool of buyers. This would include things like installing non-standard counter heights for short/tall families or a urinal for a family of boys.
Too much color. If bright intense colors are your thing, and the walls of your home look like a bag of Skittles, be prepared to paint over them when it comes time to sell your home. Unconventional colors will distract potential buyers from seeing the good qualities your home possesses. Everyone has an opinion on color, but no one has a strong objection to neutral colors.
Adding a pool. There is a small subset of Chicagoans that view pools as an asset, but to most, it's just another thing to upkeep and only usable for a small portion of the year. Pools serve as a potential hazard to small children as well, eliminating a BIG buyer group.
Renovations without permits. Nearly every municipality requires permits for major (and sometimes minor) renovations. That's partly to ensure that all home improvements are up to code. Most importantly the aspects of a renovation you can't see, like electrical, plumbing, insulation, etc. Savvy buyers will ask whether renovations were done with permits (requesting copies of them is a good idea), and some cities require inspections before homes are sold. Buying a home with un-permitted work can cost later if the city requires the work to be torn out and redone or levies a fine.
Renovations are always best when done neutral, tasteful, and keeping within the home's character. Trying to incorporate a ultra contemporary kitchen in a traditional Victorian home may disrupt the flow and 'feeling' of the home too much, leading to a disconnect between rooms. Considering a more transitional design would allow the homeowner introduce a flair of modern without giving the home a 'split personality'.
Here are six renovations that can really hurt your home's resale value:
Converted garage. Some homeowners see converting a garage as a cheaper way to add more living space rather than building an addition, and it is, but most buyers would prefer a garage, especially in our climate.
Eliminating a bedroom or powder room. In older homes, combining smaller rooms in the public living space might add to the value because today's homeowners like large, open spaces. Eliminating a powder room, however, is a bad idea. Also, turning a bedroom into a master closet or combining two bedrooms to create a large master suite may not pay off in the long run. By cannibalizing a powder room or bedroom, you make your home marketable to a smaller group of potential buyers.
Over-personalization. We all want to make our homes into our signature spaces, but some unique features may turn off potential buyers. Anything that is too personal or too specific will not appeal to the broadest pool of buyers. This would include things like installing non-standard counter heights for short/tall families or a urinal for a family of boys.
Too much color. If bright intense colors are your thing, and the walls of your home look like a bag of Skittles, be prepared to paint over them when it comes time to sell your home. Unconventional colors will distract potential buyers from seeing the good qualities your home possesses. Everyone has an opinion on color, but no one has a strong objection to neutral colors.
Adding a pool. There is a small subset of Chicagoans that view pools as an asset, but to most, it's just another thing to upkeep and only usable for a small portion of the year. Pools serve as a potential hazard to small children as well, eliminating a BIG buyer group.
Renovations without permits. Nearly every municipality requires permits for major (and sometimes minor) renovations. That's partly to ensure that all home improvements are up to code. Most importantly the aspects of a renovation you can't see, like electrical, plumbing, insulation, etc. Savvy buyers will ask whether renovations were done with permits (requesting copies of them is a good idea), and some cities require inspections before homes are sold. Buying a home with un-permitted work can cost later if the city requires the work to be torn out and redone or levies a fine.
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Gary Lee, CFA | Baird & Warner
25 West Chicago Avenue | Hinsdale, IL 60521 Cell: 630.449.2110 Email: [email protected] |
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