Four Home Renovations That Will NOT Increase The Value Of Your Home
Are you thinking of putting money into your home to get a better return on investment when you sell? In this video, I’m going to share four home renovations that will not increase the value of your home. We’ll look at some specific examples so you can use your money wisely and get the best profit on your sale.
Your Return On Investment
Many people tend to think that if you put x number of dollars into your home, you're going to get a good return on it. We call that your return on investment. However, that's not how it really works.
There are items that most buyers expect to be in working order that will not increase your home's value, regardless of how up-to-date it is. Just because you update something in your home does not mean you will get a return on it. I'm going to show you a couple of examples of exactly what I mean so you can invest in what really matters.
Air Conditioning
The first improvement you shouldn’t make is on your A/C unit. Nobody cares if you have the latest model of the FreezeMaster 5000. They just care that it's working.
Additionally, not every home on Oahu has air conditioning. If your home does, simply updating the unit will not necessarily increase the value of your home by a substantial amount. Your buyer is already excited that there's an air conditioning unit in the home.
One caveat to this is if you do install air conditioning in a home that did not previously have it. It may be a nice selling point that will help your home sell more quickly. However, know that there's still no guarantee that you will make a positive return on investment.
The Roof
The second improvement you shouldn’t make is on your roof. If you were buying a house, you would expect the roof not to leak, right? That's exactly what all buyers expect. Just because you put on the latest and greatest roofing does not mean you're going to get an ROI on it.
Don't get me wrong: buyers will certainly appreciate it. However, that's not what is going to sell the house. The majority of buyers just want to make sure that the roof is in good condition and that they're not going to have to worry about it for the next few years. Nobody's going to pay a premium for your newest shingles improvement.
Main Mechanical Systems
Next is your main mechanical system. Updating your electrical, plumbing, or major home mechanical systems is something a buyer is going to want—but not necessarily something they will expect. One example is an EV. Having an electrical vehicle plug is definitely a bonus, but it's not a necessity. Many buyer clients don't mind adding an extra outlet after closing as long as there's enough amperage in the system for them to install it.
Plumbing and electricity will be checked thoroughly during the home inspection. The inspector and the buyer are just looking to make sure there are no major mechanical or electrical issues. Some things I frequently see include double-tap breakers, outlets that are not grounded, and not ideal plumbing underneath sinks.
If there are issues, you will likely have to pay to get them fixed. However, don't expect to get any positive return on these repairs or improvements.
Windows
The last improvement you shouldn’t make is windows. Everyone loves windows. If yours are super old and not functioning, you may want to replace them. If not, most buyers only care that they are in working order.
For example, if I were to replace all the windows on a typical single-family home, it would likely cost over $50,000. That means I would need to sell my home for $50,000 more in order to make that replacement make sense. To be honest with you, you're better off selling your property in as-is condition, letting the new owners determine if they would like to replace the windows. They can then choose what style and materials they would like to use.
Getting The Most For Your Home Sale
I hope this helped you understand the four home improvements not to make when selling your home. Keep in mind that when you put money into your property, it doesn't necessarily mean you're going to get it back during the sale. Instead, you need to know where to invest money in your home to get the best ROI—in places like the kitchen and bathrooms.
If you need some additional help in determining what your sales price would be with improvements, I'd be happy to talk to you about this. I can point out which areas would create the largest ROI and which ones you should probably stay away from. Feel free to reach out to me and I’ll be glad to connect!
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