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5 Home Renovations With the Worst Return on Investment
Selling Your Home by Natasha Lingle
Maximizing Your Home Renovation Investment: Avoiding the Pitfalls
There are countless articles online about which home renovations deliver the best return on investment (ROI), but few shed light on projects that drain your finances without offering substantial returns. Not all home renovations are worth the time, money, and dust. While it’s tempting to believe that every improvement adds value to your property, the truth is that some renovations are more about personal enjoyment than resale value. Today, let’s explore the less glamorous side of home improvement: renovations that rarely pay off.
🎯 First and Foremost: Personalization Has Limits
Undoubtedly, making your house feel like home is important. However, if you foresee selling in the near future due to relocation, upgrading, or downsizing, it’s wise to exercise restraint. While personal touches can add charm, overwhelming customization might deter potential buyers. Remember, there’s a sweet spot between bland conformity and an over-the-top design reminiscent of a 1970s disco inferno. Most buyers appreciate a degree of personalization, but it’s essential to strike a balance that maintains broad appeal.
Renovation Loss Leaders By the Numbers
Remodeling Magazine has been tracking the average costs of the 23 most popular projects since 2002 and the value they retained at sale. While upscale renovations like lavish bathroom remodels or extravagant kitchen upgrades may seem appealing, they often fall short in terms of ROI. You might be surprised at these projects Remodeling Magazine turned up as the worst investments, based on national averages.
Here are five home renovations with the worst return on your investment, based on data from the 2024 Cost vs. Value Report, insights from the National Association of REALTORS® Remodeling Impact Report, and Angi Reports:
1. 🏊 In-ground Swimming Pool
Average Cost: $70,000+. Return: $4,900. Average ROI: 7%
Installing a pool may be a dream for many homeowners, however, from a resale perspective (especially in Virginia with a short swimming season), the return on investment is minimal—typically averaging just 7% to 8%.
2. 🛏️ Upscale Primary Suite Addition
Average Cost: $339,513. Return: $81,042. Average ROI: 23.9%
The upscale Primary Suite Addition may include a luxury sleeping area, sitting room, walk-in closets, and a spa-like bathroom—but it’s rarely worth the cost. While it can improve your quality of life, buyers often don’t assign the same value to ultra-premium features—especially if your neighborhood doesn’t support high-end pricing.
3. 🟫 Wall-to-Wall Carpet
Average Cost per sq ft: $4. Estimated ROI: 25%
If your home features existing hardwood floors, covering them with carpet could be a misstep—especially when preparing to sell. In today’s market, wall-to-wall carpeting often underperforms—typically recouping only 25% to 50% of its cost. Many buyers prefer hard-surface flooring and view carpet as outdated or unwelcome, especially if it covers original hardwood. By contrast, refinishing hardwood can deliver an impressive 147% ROI, while installing new hardwood offers around 118% If you’re preparing your home for sale, opt for hardwood or high-quality vinyl instead of carpet for a significantly better return.
4. 🚿 Upscale Bathroom Addition
Average Cost: $107,477. Resale Value: $34,997. ROI: 32.6%
Here’s the kicker—while your new bathroom might feel like a slice of paradise, its appeal might not translate to prospective buyers when it’s time to sell. Not everyone is willing to shell out extra for those gold-plated fixtures or heated floors. Design trends come and go, but a timeless bathroom design withstands the test of time. Investing in features that are fashionable today but might feel outdated tomorrow could impact your ROI down the line. Ever heard of overimproving? It’s a real concern in the world of renovations. Pouring money into a bathroom that exceeds the expectations of your neighborhood could leave you with a hefty bill and a lukewarm reception from potential buyers.
5. 🍽️ Upscale Kitchen Remodel
Average Cost: $158,530. Return: $60,176. Average ROI: 38%
Despite the fact that a mid-range minor kitchen remodel will return about 85.7 percent of its value, an upscale major remodel doesn’t even come close. It’s no secret that luxury comes at a cost. Upscale bathroom remodels involve top-of-the-line materials, exquisite finishes, and custom features that can significantly inflate your renovation budget.While the allure of gourmet appliances and luxurious finishes may be tempting, the reality is that such renovations often yield a modest return on investment. With high initial costs, limited market appeal, changing design trends, and the risk of over-improvement, the ROI of an upscale kitchen remodel averages just 38%. Gourmet appliances, exotic countertops, and custom cabinetry might be tempting—but the return is underwhelming. If you’re remodeling for yourself, go for it. But if you’re prepping to sell, think twice.
Final Thoughts
When embarking on home renovations, prioritize projects that strike a balance between personalization and broad appeal. Instead of chasing extravagant upgrades, opt for cost-effective improvements that maximize ROI. By avoiding renovation pitfalls, you can enhance your home’s value without emptying your pockets.
Also read: “What Home Renovations Will Get You the Most Bang for Your Buck?”
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Natasha Lingle is an energetic and personable real estate professional with a proven track record of success representing home buyers, sellers and investors throughout Northern Virginia. Natasha is known for her deep knowledge of the local market, tenacity, strong negotiating skills, honesty and integrity. Whether providing expert guidance to buyers or creating custom marketing plans for the sellers, Natasha delivers the highest level of customer service to all her clients.
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