For most Americans, their home is their biggest asset.
It's no wonder why so many homeowners put countless hours into maintaining and beautifying their homes. According to a recent survey, the average homeowner spends $6,500 each year on home improvements.They're also confident they know the best ways to boost the value of the structure and property. When the time comes to sell, they're hoping these changes will help increase their returns -- and give them an edge over other properties for sale in their neighborhood.
The problem is, many of these "can’t miss" methods are the real estate industry's version of old wives' tales. Some add value to the property and structure, while others are a waste of money -- oftentimes adding little value to the property and in the eyes of a potential buyer.
Here's a look at the classic misconceptions harbored by many homeowners that will boost your property value. Study this list before you throw your money away...
1) In-Ground Swimming Pool
If you want a swimming pool for recreational purposes and it would enhance the quality of your life while you live in the house, have at it. A swimming pool is one of those luxuries that some of us fantasize about -- it's all part of the American Dream. We imagine ourselves lounging by the pool, wearing cool shades and consuming drinks with little umbrellas in them -- a scenario that’s all fine and good, for some of us. As a way to boost the value of your home, it's a foolhardy investment.
An in-ground pool can cost anywhere from $20,000 and up. It's also expensive to maintain, dangerous to children and a potential lawsuit. Indeed, when it comes to deaths in the home, more children in America die every year from swimming pool accidents than from handgun accidents. You might never recoup your investment in the pool and in fact, it might turn off potential buyers with small children or those who just don't like pools. For some buyers, an in-ground swimming pool isn't an enticement -- it’s a deal breaker.
2) A New Addition
Similarly, if you need an addition to house another child or an elderly parent, then fine -- go ahead and build one, if you need it. But if you're only doing so to increase the value of your home, you'll never recoup your investment. An addition is a time-consuming, expensive process that involves a lot of money and, too often, a lot of hassles with contractors. You can expect to shell out tens of thousands of dollars, but any increase you could tack onto the eventual sale of your home would pale in size to the initial investment. Prospective buyers of your home wouldn’t pony up an additional amount that comes anywhere near what you paid.
3) Fancy Landscaping
To be sure, a major reason to buy a house in the suburbs is a love of greenery. Homeowners plant gardens and shrubbery and take meticulous care of the lawn. However, if you decide to invest thousands of dollars into elaborate landscaping, just to increase the value of your home, you're making a lousy investment.
Prospective owners may not share your taste; they may be calculating how much it would cost to tear it all out. Also, overly fancy landscaping requires expensive upkeep, which could be another turn-off for buyers. Everyone has his or her own taste. Maybe the couple eyeing your property doesn't like Japanese bonsai trees and rock gardens with flowing water. If you like sculpted bushes and rare imported trees, that's terrific. But don’t pay for the trouble, thinking they're investments.
4) Top-of-the-Line Upgrades
It's true, and not merely a myth, that remodeling the kitchen and bathrooms will boost the value of your home and the expense and effort of doing so are worth the investment. The kitchen and bathrooms are key areas of scrutiny for any prospective buyer.
However, you're making a grievous error if you're installing in your kitchen, say, expensive cabinets, stainless steel appliances from Germany, imported tiles from Italy, and the latest Viking stove, if the rest of your house isn't up to the same standards. Upgrades must be in synch with the rest of the house; otherwise, people viewing the house will probably think: "It will cost a fortune to make the rest of the house match the kitchen."
5) Wall-to-Wall Carpeting
Real estate ads often brag about the presence of wall-to-wall carpeting, but the truth is, it's a turn-off for many people. New studies show that carpeting isn't that healthy because it harbors allergens and dirt. Moreover, your idea of beautiful carpeting may not jive with someone else's.
Color and style are subjective; the people viewing your home may be thinking that they hate carpeting, or hate the color of yours, and they're trying to figure out how much it would cost to tear it all up. Getting rid of your carpeting and restoring the wood floors beneath might be a better investment.
6) Hidden Improvements
It's always worthwhile to invest in the structural integrity of your home and to properly maintain it, but don't make basic repairs with the thought that prospective buyers will be wise enough to notice and pay extra. They won't. Replacing your plumbing with better pipes, or installing a new central air conditioning system, are inherently worthwhile for you while you live in the house, but buyers tend not to notice, nor care enough to pay more.
7) Enviro-Friendly Features
Making your house "greener" is a laudable social goal. You should pat yourself on the back for being a good environmentalist. However, sad to say, you won't recoup your large investment when it's time to sell the house. Buyers tend to be shortsighted about ecological improvements, such as, say, solar-heated water. You'll save money on your heating bill (as well as help the environment), but people looking at your home probably won't care enough to pay more for the house. Not everyone appreciates these features, even though they should.
8) Expansions That are Out of Character with the Neighborhood
If you expand your house to the point that it looks like a "McMansion," you might be making a mistake if the houses all around you are considerably smaller. Always consider the context of your neighborhood. If the houses adjacent yours are worth around $150,000, don't expect prospective buyers to pay $300,000 for your house, just because you put your house on steroids with all sorts of additions and expansions. You'll never get the cost of construction back in the sale price.
9) New Parking Spaces
Tearing up your front lawn to lay down asphalt, to make room for another automobile, is a common mistake. The world is full of asphalt; people buy homes for the lawn and peace and quiet, not another place to put their cars. Installing a new driveway where once existed trees, grass and open space is expensive and detracts from your property. It can make your lot look ugly. In the words of the folk song: Don't pave paradise and put up a parking lot.