We all know people with more money than judgment, and rarely is it more evident than in people’s home improvement ideas. Whether for their own home or a rental property, people find incredible ways to blow thousands of dollars, often with no chance of seeing most of that money again. Sure, many of us can appreciate a walnut-enclosed wine cellar, and most people have to admit that hot tubs have a certain sex appeal (figuratively speaking). And many upgrades will result in higher rents, which may over time pay back their installation costs (especially if you buy second hand).
Unfortunately, most of these house renovation ideas are commonplace, expensive and completely unnecessary, and will cost far more than they will earn in resale value.
Cue Captain Obvious: additions are extraordinarily expensive. Yet people build them all the time, from sunrooms to family rooms to expanded master bedroom suites to garage additions and countless more. These are vanity projects, and inappropriate in both owner-occupied and rental residences. Unless your property sits on a unique and perfect piece of land, additions are simply a recipe for lost money. It makes more sense to simply upsize to a bigger house in most cases.
2. High-End Roof Replacement
Roofs sometimes need to be replaced. But spending $30,000 on a trendy metal roof does not mean your property will sell for $30,000 more; in fact only 55% of the average high-end roof cost is recouped at the time of sale. Keep it basic, and remember that most people will never look twice at your roof.
3. Fiberglass Doors
They sound vaguely cool, but guess how many home shoppers say “The most important thing to me is that the house has a fiberglass door”? If your answer was somewhere between nil and none, you guessed correctly. Yet homeowners and landlords get swept up in thinking about how great their house would be if they just had this or that latest trend, and fiberglass doors are a perfect example.
4. Home Office Remodel
Is it nice to be able to boast in your listing that the property has a home office? Sure. But the advantages stop there. It doesn’t need to have an $11,000 coffee maker, or rainforest hardwood shelving, or a robot that gives back massages. If ROI matters to you (as it should), then avoid tricking out your home office, because you’ll recover less than 50 cents on every dollar you spend here. The fact that it exists is enough for buyers and renters, let them do what they want with it.
5. Permanent Backup Power Generators
Yes, we’re all worried about the impending zombie apocalypse, but backup generators that are permanently installed and designed to power the entire house are gratuitous and unnecessary. If the power goes out for a day, wouldn’t it be nice to light some candles and play a board game, instead of watching TV?
If you desperately want the above for your own house, by all means indulge, but be aware that it’s an indulgence, not an investment. Don’t justify home renovations and gadgets that you want by telling yourself you’ll make the money back when the property sells, because you won’t.
Start with the fundamentals: cleanliness, reasonably fresh paint and flooring. A wifi-enabled thermostat will not impress anyone if the carpets are shredded and the kitchen smells like mildew.
Next look to the amenities. The most important amenity to renters today is still a clothes washer and dryer, followed by air conditioning. Not exactly shiny new technology, but extremely useful for actual day-to-day living.
If the property is on the low end, stop there – the renters can’t afford to pay more for gizmos like smart stereo systems. For mid-level properties, consider one or two style touches, like wifi-enabled thermostats, security and/or smoke alarm systems. The good news is you can spend less than $500 on these smart home features, to add a heavy dollop of “cool” to an otherwise average property.
Have a high-end rental unit? Look into what comparable properties are renting for if they have other chic touches, such as smart door locks ($200) and coffee makers ($150), wine coolers, etc. Also remember that the house renovation materials will need to be higher end too: perhaps hardwood flooring instead of carpets, granite countertops instead of composite, stainless steel appliances and gleaming bathrooms.
No matter the price tag, every property could use a curb appeal boost. Start simple with a few hearty potted plants or basic landscaping, it doesn’t have to be complicated or expensive, but curb appeal makes a huge difference to prospective renters and buyers.
Every dollar spent on a real estate investment is still exactly that: an investment. If it fails to provide a good return, then it is not a dollar well spent. What’s trendy is only useful to the extent that it offers a positive ROI, so beware of home improvement ideas that won’t demonstrably pay for themselves and then some.