7 Home Improvement ROI Tips

Home improvements are exciting. An extra room or a new pool is something that anyone could be happy about.

But many home improvements are poor decisions from a financial perspective. It’s not always obvious which home improvements make the most sense financially. Some of the worst home improvements in recouping costs are the most popular.

Here are some of the worst offenders for the money:

  1. Adding the main suite. Master suites are standard in modern homes but not in older construction. Think about the house in which you grew up. Odds are there was not a large main bedroom with an attached bathroom.
  • This building project is among the worst regarding recouping your costs. You can expect only about 52% of your money back at selling. Part of the charm of older homes is in the styling. Leave the main bedroom alone.
  1. Sunroom addition. Most of us like big windows and lots of natural light. If you’re in a house with small windows, it might make sense to add a sunroom instead of the larger one. Unfortunately, a sunroom is one of the worst home improvements to make when looking at the financial picture.

 Homeowners can expect to get back $0.49 back for every $1.00 spent.

  1. Adding an oversized garage. If you’re like most people, your garage is crammed full of cars, bikes, lawn tools, and all your stuff that won’t fit in the house. An oversized garage can appeal to those who want space and order. However, most prospective homeowners view an oversized garage as a space that won’t get used.

 Instead, consider cleaning out the garage you already have. Get rid of the stuff you don’t use. Sweep it out and paint the interior. You might already have enough space to make it work.

  • If you build a garage, you will only get back around 54% of the cost.
  1. Extra bathroom. This is a widespread addition, but it only yields a 53% return at sale time. Plumbing is expensive and adds considerable cost to this project. Consider how much an extra bathroom means to you.

  2. Home office. A home office is less appealing to homebuyers than it used to be. With wireless Internet, a person working at home can choose any room to set up shop. It’s also just as easy to head to the local coffee shop or an outdoor location. Converting a spare bedroom to a home office will only deliver back 46% of the cost.
  3. Getting a backup generator. Backup generators yield about 60 cents on the dollar when you sell your house. Those in areas more prone to natural disasters tend to see a better recoup rate. Also, losing your heat in Minnesota in winter is more challenging than in south Texas, so the location has much to do with your return on investment.

  4. Adding a pool. Unless your home is in Florida, California, or Texas, adding a pool can be detrimental to selling your house! Many potential homeowners are driven away by the costs and trouble of maintaining a pool that they would only use for a small portion of the year.

 

Also, remember that for most projects, half the cost is labor. If you can do the work yourself, practically all home improvements will yield at least a small profit. Some can even result in a considerable profit.

Of course, if you intend to stay in your home for many years, follow your desires when choosing home improvement projects. They’ll bring you enjoyment for many years to come!

If you’re improving your home to get more money at sale time, think of these returns on investment and go with the ones that will most increase the value and salability of your home. 

If you are looking for tips on what home improvement projects provide the best ROI, pick up 101 Cost-Effective Ways to Increase the Value of Your Home by Steve Berges. Not only will you get a ton of good ideas, but they are ranked by ROI so that you are putting your dollars to work for you.