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7 Renovations That Reduce (Yes, Reduce) Your Home’s Value

Date: September 1, 2015      Publication: Bottom Line Personal      Source: Scott  McGillivray      Print:

Never do this to your home!

Home-renovation projects rarely pay for themselves when the home is sold. Sometimes the financial hit is considerable. For example, if you add a sunroom…put in a swimming pool in a cold-weather state…or remodel a home office, you would be lucky to recoup half your costs when you sell. But some specific home projects are even worse financially—not only do they not pay for themselves, they actually will make your home sell for less than it would have if you hadn’t done them at all.

Things not to do to your home…

DO NOT expand your master bedroom if that means eliminating another bedroom. Small master bedrooms are a common complaint, particularly in older homes. But in many cases, the only realistic way to expand a master bedroom is to sacrifice one of the home’s other bedrooms, which is likely to be a costly mistake.

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Fewer bedrooms means fewer potential buyers—most buyers have a specific number of bedrooms in mind and never even look at homes that fall short of this number. The buyers who remain will expect your home to be priced in line with the mostly smaller homes that share its now-lower bedroom count.

The financial hit is greatest when a home starts with three or fewer bedrooms. Dropping from three to two or two to one will greatly reduce both the potential number of interested buyers and the eventual selling price—it could cost you tens of thousands of dollars.

Exceptions: Removing a bedroom might not detract from your home’s value if the home currently has six or more bedrooms…or if the home is in an area where a large percentage of buyers are retirees—bedroom quantity is not a major concern for many empty nesters.

DO NOT convert a garage into living space. Finishing a garage can seem like a cost-effective way to enlarge a home—it is significantly less expensive than having an addition built from scratch. Trouble is, many buyers will not even look at properties that do not have garages. As a result, converting your garage into part of your home could reduce the value of the home by $10,000 or more—particularly if you convert the garage into a family room or an office rather than an extra bedroom that would at least increase the home’s appeal for some larger families. Finishing part of the basement is almost always a better financial move in the long run, assuming that the ceiling is at least eight feet high.

DO NOT add artistic flourishes or personal touches to the home itself. The smart way to add art and/or personality to a home is to hang art on its walls, not to alter the home in ways that can’t be easily undone when it is time to sell.

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Examples: Do not have a mural painted on a wall or ceiling—or if you do, paint over it before you put the home on the market. It would be relatively easy for buyers to paint over it themselves, but most buyers prefer homes that already are the way they want them, not homes that require even modest amounts of work. Do not have a large masonry fountain built in your yard. Do not incorporate a mosaic artwork into the tile of your kitchen or bathroom.

It’s perfectly fine for a home to have style, but that should be a mainstream style that fits in with the neighborhood and the overall architecture of the home—a home in a rural area could have a farmhouse style, for example. If a home’s style is out of character for the neighborhood…dramatically out-of-step with the size and value of the property…or reflects only your personal tastes, your home’s value is likely to take a hit—even if the flourishes you added truly do look nice. Buyers want a home to be a blank slate for them to fill, not a reflection of a prior owner’s tastes.

DO NOT paint interior walls dark colors. Dark interior walls have become a trend—decorators will tell you that they can make rooms feel cozy and ­elegant. But many home buyers do not think “cozy and elegant” when they walk into a dark-walled room—they think “small and unwelcoming.” Light-colored walls might not be trendy, but they make spaces feel larger and friendlier, which buyers value more than ­stylishness.

If you do paint walls dark colors, repaint them before putting the property on the market. You might have to apply primer before repainting to cover the dark color with a light one.

Similar: Avoid garish and unusual wall colors. Neon pink or lime green, for example, will be offputting for many potential buyers.

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DO NOT attempt do-it-yourself home repairs if the result will look like ­do-it-yourself repairs. Home owners who have the skills to do basic home repairs can save themselves thousands of dollars over the years. But when home buyers (or the home inspectors they hire) see evidence of do-it-yourself work, they often start to worry about what else the home owner might have done on his/her own that isn’t so evident—such as electrical and ­plumbing work or foundation work—and whether this work was done properly. Potential buyers feel much more confident when it appears that a home has been professionally maintained.

Before you tackle a do-it-yourself ­project, consider not just whether you can do it, but whether you can make the finished job look like professional work. It might be worth paying a paint or drywall pro to expertly close up the wall or ceiling you had to open up, for example.

When you are about to sell, point out your do-it-yourself projects to your real estate agent and ask whether there is anything that should be done to make the work look more professional.

DO NOT texture interior walls and ceilings. Drywall compound can add texture to interior walls and ceilings, resulting in a stucco look. This textured look goes in and out of style and might not be in vogue when you sell.

DO NOT install a chain-link fence in your front yard. These look low-end and unwelcoming, giving potential buyers a negative first impression of your home. If you must have a fence, it’s worth paying extra for wood (or if you don’t want to deal with the ongoing upkeep that wood requires, perhaps a composite or vinyl fence designed to look like wood). These can cost twice as much as chain link, but they will not reduce the value of the home—a nice wood picket fence could even increase the value.

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Exceptions: A chain-link fence is unlikely to detract from the value of your home if most of the homes in your neighborhood have one…if it is in the backyard and not easily seen from the road…or if it is hidden by tall, attractive hedges.

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Source: Scott ­McGillivray, host of the HGTV series Income Property. He is a real estate investor and contractor in Toronto, Ontario, Canada, and Fort ­Myers, Florida, and author of How to Add Value to Your Home. ScottMcGillivray.com

  • Lou FA

    Maybe I’m a bit pollyanna but if a buyer wants a “perfect” home, s/he should buy a new home. Selling a home in good repair is paramount. If I have a wall painted in a dark color, the right buyer will see beyond that one wall and know that the home is either what they want or not. It’s a seller’s market here, so I don’t think people will be daunted by a few customized touches.

  • DixieAngel_76

    Vinyl fences are JUNK. The ones in the desert city where I live start crumbling from the hot summers and freezing winters within a few years, same with wood. It rots. I would only pay for chain link, cinder block or stone.

    • James Van Damme

      Just not in the front yard. Unless you’re going for the prison grounds look.