Most home owners renovate their homes because they have a vision of how their home could be better. They believe that in the end they will see an increase in the value of their home. But as many a wizened home renovator knows, this isn't always the case.
Before you spend money on those home improvementsyou think you can't live without, you need to consider how long you're planning to live in your home. Only a couple years? Then, you really want to pay attention to the cost versus value ratio of any extensive projects.
Are you in your home for the long term, trying to turn it into the castle that you've always wanted -- perhaps complete with a moat and drawbridge? Well, then you shouldn't look so much to the cost versus value ratio, but rather look more to the amount of enjoyment that you'll get out of the house. Who knows? Perhaps in twenty years moats and drawbridges will be all the rage.
According to the Census Bureau, the average American moves about 12 times during his or her lifetime. This means that most of us probably do care about the return on our investment. To get the most bang out of your renovating buck, here are five home improvements that you should NOT do.
1) Over-improving for the neighborhood. This is perhaps the biggest mistake that homeowners make, not realizing that the value of their home has a finite limit. A $200,000 kitchen renovation in a neighborhood where the top price of the other houses is only $200,000 is not going to make your house worth $400,000.
2) Putting in a pool. Even in markets where the weather is sweltering hot most of the year, you will not recoup your investment. In many areas a pool is a detriment and turns people away from your home. You should never add a pool thinking it will improve the value of your home. If you are in your house for the long term and would enjoy a pool, then by all means get one, because some factors, such as personal enjoyment, can not be measured monetarily.
3) Installing unusual or outlandishly expensive upgrades. A wine cellar, expensive "green" upgrades, and pool-sized jacuzzi tub are among the items you should avoid installing if you're looking to recoup your investment. Each of those things appeals to a small niche market, but other potential buyers may not pay extra for them.
4) Adding a new roof. I know! Who would have guessed this one. What the studies have shown is that people don't really care much more about the roof than whether or not it leaks. Roofs are costly, do not replace yours unless it has issues.
5) Factoring in fancy technology. Technology is rapidly changing and upgrading. BetaMax anyone? Chances are that whatever state-of-the-art gadget you install in your home today will be obsolete by the time you sell your home. Remember when everyone was scrambling to put Internet cables all over their homes? Now most of us are wireless and a few more unfortunate of us have outlets in the wall to remind us.
Up next, home improvements that give you the most bang for your buck.