There are home remodeling ideas that make sense, and those that frankly come out of left field. And unless you are made of money or have your own private mint in your garage, it’s important to know the difference.
We’ll start with the remodeling ideas that really make no sense:
1. Adding a second story to a home
There are times when adding a second story to a home might be reasonable, however, when your home is situated in a subdivision filled with one-story, 1400 square foot homes and you decide to add a second story and make your home 2,000 square feet, expect to lose big time on the return on investment.
Expect to pay around $45,000 or so for that addition, and to recoup $24,000 on your return on investment.
2. Adding a swimming pool
Adding a swimming pool may seem to make sense if you have a brood of kids, but financially, pools are a disaster.
Typically a pool will cost you around $37,000 to have installed, and will only bring in around $9,000 or less.
Why are pools such losers? Because many people shy away from the continuing maintenance costs of running a pool. People may love the house but reject it because of the pool.
3. Adding a sunroom
In general, adding a room to a house almost never makes a great deal of sense.
A typical four-season sunroom will cost between $20,000 to $80,000 to have built by a remodeling contractor.
And how much of that can you expect to get back? According to Home Advisor, around 50 percent or less.
Besides losing money upon resale, a lot depends upon how much value you will get out of a sunroom. It may be a great move if you expect to use it all of the time, but as an added room, it’s essentially a money pit.
4. Garage in-law conversions
Remodeling contractors are frequently asked about in-law garage conversions and on first blush, if you have an elderly relative it can be appealing to create a garage apartment for them. After all, an assisted living facility typically costs $4,000 per month.
Garage conversions cost on average around $13,000 to $15,000 which is roughly only about 4 months of assisted living costs. However, the family may quickly discover they have bitten off more than they can chew in terms of privacy and the amount of care their in-law may need.
However, don’t expect potential buyers for your home to jump up and down by having a spare room. People love garages and are generally unwilling to trade their garage for extra space.
5. Creating a master suite
Knocking down a wall, and combining a master bedroom with another bedroom may be a woman’s dream but don’t expect other people to be willing to pay for it.
A master suite will typically cost up to $90,000 to build and the return on investment is only around 53 percent.
Where does it make sense to remodel?
Kitchen remodeling and bathroom remodeling are the bread and butter of a contractor’s remodeling work. And with good reason.
Real Estate Agents say that modern bathrooms and modern kitchens sell homes.
On average, a minor bathroom remodel, for example, can typically cost around $10,500 and will return almost 100 percent of the investment. A new vanity, high-end showers, and attractive lighting can make buyers forget that someone previously lived in their home. It seems fresh and new.
And a minor kitchen remodel, where you add all new appliances, and then refurbish rather than replace cabinetry will typically cost around $15,000 and return as much as 98 percent of the money you spend.
Just be sure and not buy space-age appliances that do amazing things like buying a refrigerator that automatically calls the grocery store and orders new groceries. Your new buyer may enjoy the convenience of it but they certainly don’t want to pay for it.
Concerning kitchen remodeling, if you live in a high-end neighborhood where the price of new homes starts at around $750,000, a minor kitchen remodel may not be enough to attract buyers. At those prices, buyers will tend to expect immaculate kitchens, and even though you may only get around a 90 percent or less return on investment, a major kitchen remodel may be expected.
The bottom line on remodeling
You should think very carefully about your remodeling projects if you expect to get most of your money back in a resale.
Ordinary renovations like kitchens and bathrooms make sense, but many remodels do not make a good deal of sense. On the other hand, even if you lose money, they will make sense if you plan to live in the home for 5 to 10 years or more.