Americans spend $400 billion annually on remodeling, but they’re not all adding value to their homes in the process. Whether you’re dreaming of adding a big-ticket item like solar panels or a swimming pool, or you simply want to upgrade your kitchen, gauge how your project will impact your property value before you commit.

We crunched ROI data and spoke with two top real estate agents to round up 10 home improvement projects that do not add value to your home. We’ll break down why these common home improvements won’t increase your property value as much as you expect.

Tools used to complete home improvements.
Source: (Mitchell Luo / Unsplash)

1. DIY home improvement projects

While it might be tempting to spruce up your space with DIY projects like a faux fireplace or hand-painted cabinets, don’t expect these upgrades to add value to your home. According to top-selling Atlanta, GA agent Madalyn Suits, buyers notice DIY projects from a mile away — for all of the wrong reasons.

“We use the phrase ‘lipstick on a pig’ a lot. When people try to put their hands on everything, it shows that someone tried to make it look good. Buyers might begin to think, ‘Did they do everything themselves?’” she shares.

In one instance, Suits had a client who completed a DIY bathroom remodel with unappealing results. The client attached a frame to a built-in frameless mirror but only added the frame to three of the four sides. They were also considering adding fake linoleum wood to replace the existing tile, however, Suits advised against it. “I recommended they spend their money on doing one project well so they could get more bang for their buck.”

Beyond yielding less than stellar results, DIY projects often cost sellers more than they anticipate. The higher the project cost, the lower the return on investment you’ll see at resale.

“We tend to watch a lot of HGTV, and it’s amazing to see what these people can do to a home. But there’s a lot of risks behind closed doors to those projects. You could easily end up spending more money than you planned,” comments Ray Mihara, a top agent in Tampa, FL, who sells 66% more single-family homes than the average agent.

If you’re thinking of starting some DIY projects, proceed with caution. You’ll need thorough planning, hard work, and solid craftsmanship to pull DIY off successfully.

2. Garage conversions

Whether you need an in-law suite or a home office space, there are plenty of reasons why you might consider a garage conversion. Still, you should think twice before converting your garage into an additional room if you want to sell it anytime soon. On average, homeowners spend around $10,000 to convert their garage into a living space, but, unfortunately, this home improvement does not add value to your home.

The reason? Most buyers prefer a functional garage to an extended living area. In a recent survey by the National Association of Home Builders, 25% of homeowners rated garage storage as “essential” while another 56% rated it as “desirable.” Additionally, our agents share that most buyers, especially those in colder climates, want the option to store cars inside of the garage to keep their vehicles clean and frost-free.

3. Solar panels

If you want to reduce your carbon footprint and monthly electricity bills, installing solar panels might seem like a no brainer. However, solar panels do not typically increase home sale prices. Solar panel cost and return on investment vary widely based on location and solar panel type. But on average, solar panel installation ranges between $11,144 and $14,696 after solar tax credits, while the average return for solar panels is around 10%.

The value solar panels add also depends on whether you lease or purchase the panels outright. Since leased solar panels belong to the solar company, not the homeowner, they do not add value to your home. Purchased solar panels, on the other hand, may contribute to your home’s value; however, this value-add decreases over time (as quickly as 9% annually, according to one study) as the panels age and improved models enter the market.

A room with wallpaper that does not add value.
Source: (Photographee.eu / Shutterstock)

4. Quirky wallpaper

Wallpaper might be making a comeback, but that doesn’t mean this home improvement will add value to your home. Most homeowners spend between $800 and $1,200 to wallpaper a room — a cost they’re unlikely to recoup at resale. Wallpaper is highly personal, and a pattern that appeals to you may or may not appeal to a wide range of buyers. Most real estate agents recommend removing wallpaper before selling your home to create a neutral interior with mass appeal. If you’re thinking of revamping your walls, consider hiring a professional to apply a fresh coat of light gray, beige, or white paint instead.

5. Custom luxury upgrades

If you want to make extravagant upgrades to your home, be warned that custom, luxury home improvements typically only recoup a fraction of project costs. For example, according to Remodeling Magazine’s 2020 Cost vs. Value Report, a high-end kitchen remodel only recoups around 54% of the costs, significantly lower than a minor kitchen remodel, which recoups 77% of costs on average.

Suits experienced this firsthand when she had a client who installed a high-end custom kitchen before selling:

“He put in a great kitchen, but the rest of the house didn’t match. The master bath wasn’t great, and he probably would have gotten more money back if he would have put in more work in other areas of the house.”

Suits explains that the reason luxury home improvements do not add value is because these remodels are often highly personal. Homeowners tend to splurge on high-end materials and finishes based on their personal preferences. When buyers tour the home, they view the luxury upgrade as a “nice to have” rather than an essential feature and often are unaware of the total project cost or significance of material choices.

6. Wine cellars

If you’re selling soon, Suits says it’s not advisable to “spend big money on items like a wine cellar” since even the most passionate wine connoisseurs are unlikely to spend more for this bonus feature. A custom wine cellar can add elegance and a “wow” factor to your home, but for an average cost of $40,000, it’s unlikely to recoup the majority of the respective project cost.

A room in a house with improvements that do not add value.
Source: (Martin Edholm / Unsplash)

7. An oversized home addition

Before you significantly increase your home’s square footage, research the average square footage for homes in your neighborhood. If a second story or home addition makes your home the largest in the neighborhood, you could struggle to sell your home down the line. According to The Real Estate Appraisal Group, most buyers look at homes in a particular neighborhood because it matches their price range. If they have a higher budget, they’ll likely want to live in a neighborhood composed of homes of equal or greater caliber.

“You really have to pay attention to the price range in your neighborhood,” says Mihara. “It’s good not to get carried away. In a lot of cases, the more you do, the more it will sink the bottom line.”

8. Remodeled basements and attics

Are you thinking about clearing out the cobwebs and turning your basement into a cozy living space? Suits says a remodeled basement can help sell your home, but you won’t necessarily recoup all of your money on it. Based on data from Remodeling Magazine, a midrange finished basement will recoup about 70% of what you spend.

A finished attic offers an even lower ROI than a finished basement. On average, a finished attic costs around $80,000 but only adds $45,000 in value — that’s just 56% of costs recouped. For this reason, only 2% of real estate agents suggest sellers renovate their attic before selling.

9. New windows

When it comes to window replacement, a good rule of thumb is to only replace broken or leaky windows. Window replacement isn’t cheap: new windows cost between $200 and $1,800 on average. And while this upgrade increases a home’s marketability, it only recovers a fraction of project cost at resale. If your windows are in bad shape, it’s best to upgrade to new vinyl windows since these offer a 72.3% return on average versus wood, which has a 68.9% return on average.

A pool that does not add value to a home.
Source: (Iosi Pratama / Unsplash)

10. Swimming pools

The last item on our list leaves room for debate: swimming pools. Our Top Agent Insights Report found that installing an in-ground pool costs on average $42,480 and only adds $21,483 value-add (51% of project cost recouped).

However, Suits notes that swimming pools add more value now than they have in the past thanks to the increased demand resulting from the COVID-19 pandemic:

“I never wanted a pool, but for the first time during a pandemic, I wanted one. We used to say with pools that you wouldn’t lose money, but you wouldn’t gain it either. But outdoor living has become considerably more desirable.”

The Bottom Line: Not all home improvements add value

A final word to the wise: Consider your selling timeline before you embark on a home improvement that does not add value to your home. If you plan to sell your home in the near future, it’s best to spruce it up with a new coat of neutral paint and other improvements proven to add value and increase marketability.

On the other hand, if you plan to stay awhile, Suits shares it’s okay to focus on home improvements that bring you joy, even if they don’t add significant value to your home:

“Do whatever makes you happy. To me, that is really what homeownership is all about. Just realize you might not get every dime back, or you might have to make a modification to it. Chances are, if you love something, someone else might too.”

Header Image Source: (R ARCHITECTURE / Unsplash)

Not all renovations are equal — avoid these 10 home improvement projects that do not add value to your home.HomeLight Blog