5 Home Improvements That Do Nothing For Your Home Value

Don’t Waste Your Time on Home Improvements That Do Nothing For Your Home Value

Not all of the improvements you make to your house will add value. Some may even take away value.

There are two ways to look at the improvements you make to your home. The first is to consider how the improvements will add joy to you and your families life, kind of like what Marie Kondo talks about.

The second thing for you to consider is the marketability of the improvements. You should keep in mind that these two things may not line up.

It is possible that the improvements you make to your home will be just as well accepted by the general public as they are by you and this will be reflected in higher market value of your home.

On the flip side, it is also possible that what you find important and that brings you joy may not do the same thing for the general public. This is important because it affects the marketability of your home.

The market value of your home is a direct reflection of its marketability. Some homes are not very marketable because the features they have are not important to buyers.

If your home is not very marketable then the appraisal value will suffer. An appraiser’s main job is measuring the market’s (buyer’s) perception of features that the home has.

How The Value Of Home Improvements Are Reflected In The Appraisal

Have you ever looked at an appraisal report and noticed the positive and negative adjustments the appraiser has made to the sales comparables they used?

In an appraisal report, recent sales are included for comparison to the subject property. If the sale has something superior to the subject a negative adjustment is made and if it has something inferior to the subject a positive adjustment is made.

An easy way to understand this is to look at two homes that are identical in every respect except for the fact that one has a swimming pool. If the home with a pool sold for $20,000 (made up number) more than the other home we can assume that the buyer believes the value of that pool is $20,000 since the only difference between the two homes is the pool.

This is the basis for how appraisers make adjustments in their appraisal reports. It’s important to keep in mind that not all buyers will place the same value on specific improvements.

For example, if you look at ten other similar sales you might find that buyers will pay anywhere from $18,000 to $22,000 (made up numbers) more for a home with a pool compared to one without a pool. This has a lot to do with buyer motivations as well as negotiations.

So you may be wondering what this has to do with our discussion about home improvements that do nothing for your home value.

The reason is that as homeowners we must be aware of the impact of various home improvements so that we know what to spend our money on if we want a good return on our investment. Today I’m going to share with you some home improvements I have seen in my 25+ years as a Birmingham home appraiser that don’t add any value or very little value.

5 Home Improvements That Do Nothing For Your Home Value

1) Combining multiple rooms into one room- I recently appraised a home where the owners turned a three bedroom home into a one bedroom home. They got the idea by looking at some cool and trendy apartments in Birmingham’s downtown loft district.

The one thing that they did not consider was whether this type of home configuration was popular and accepted in their neighborhood. While these types of floorplans are popular in a downtown condo and loft district they are not as well received in a family-oriented suburban environment.

Combining bedrooms like this severely hampers the functional utility of the home, especially when you consider that the majority of buyers for this area have multiple family members, including children, and having only one bedroom is not practical.

Takeaway: It’s important to keep in mind what typical buyers in your neighborhood are looking for in a home in case you are interested in selling in the future.

2) Hot tubs and above ground pools- I have appraised numerous homes that have had above ground pools and/or hot tubs that were considered personal property. Many times the owners will build decking around them, however, because the hot tub or pool is personal property the appraiser cannot include it in the appraisal and it will not contribute to value.

I’m not talking about built-in pools and hot tubs that are a part of the real estate but only the kind I have described above. Even the ones that are considered personal property can be expensive.

While above ground pools are much cheaper than an inground pool they too can get expensive if you add extensive decking and other features.

I have appraised numerous homes that had the above ground pool removed and the only thing left was decking around an empty circle where the pool used to be. This can be a turn off to potential home buyers because like I described above, buyers think about how much it will cost to fix this problem.

My advice to homeowners from an appraisers perspective is to not build elaborate decking around the pool or hot tub because that can cost a lot of money that you will not recoup. It would be better to leave it free standing so that if and when you move you can take it with you.

3) Adding an all season room– From my experiences over the past 25+ years I have never run across an all-weather room that added more value than the cost to construct it. Due to the type of construction and quality, you can rarely include them in the gross living area of a home.

There are varying degrees of construction quality for this type of improvement and I am not talking about the high-quality ones that are tied into the main home with a similar roofline, good access, and permanent heating and cooling source.

The kind I am talking about are the ones that either has no heating and cooling source or a window unit at best. The walls are not insulated and the floor is usually a slab.

Owners have told me that these rooms have cost them anywhere from $5,000 and higher. As an appraiser, I would encourage owners to weigh the cost of these improvements with the minimal value they add to decide if it is worth it to them.

4) She/He sheds, etc.- I wrote about the He/She shed back in 2016 but thought it was worth mentioning here again. As I stated in the previous post, the most important thing to consider when building this type of improvement is whether it is real or personal property.

If it is personal property it will not even be included in the appraisal. If it is real property it will be included, however, it will not be included in the gross living area since it is not a part of the main residence.

Sheds can get pretty elaborate so owners will need to keep that in mind because they will most likely not get a positive return on the investment but it will definitely add more enjoyment to your life.

5) Sports-themed rooms- I live in the south where college football rules. Whether it be your favorite college or pro team, creating a sports themed room with the goal of increasing the value of your home is a crap shoot at best.

By decorating a room with custom flooring, paint colors and other features you severely limit your pool of potential buyers. There may or may not be buyers who are a fan of the same team you are.

When buyers see rooms like this but they are not a fan they instantly start calculating how much money it will cost for them to totally redo the room. Usually, they overestimate how much it will cost and this shows up in their low ball offers.

If you have a sports themed room it might be wise to redo it so that it is more neutral in colors and finishes. In the end, this will make the home more marketable.

Conclusion

So there you have it. There are other home improvements that do nothing for your home value but these were the main ones that I thought about. Do you have any other questions about home improvements? Leave a message below and I will do my best to answer it for you. As always thanks for reading.

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