A new bathroom or roof can add value to your home, but will not increase the value of your home. A recent analysis by Remodeling Magazine and the National Association of Realtors (NAR) found that 35 upgrades will not increase your home’s value enough to cover the projects average price. Judy Moore, a Boston real estate agent and NAR board member said, “You can easily put something in that a buyer is just going to want to rip out.”
In the Remodeling 2012 – 13 Cost vs Value Report, the estimated project price in 81 US markets was compared with how 3,900 realtors expect a given upgrade will affect the property’s value. Researchers found that some projects offer 100 percent return on investment in certain markets. However, none of them do on a national level.
Following are the five upgrades that offer the worst return on investment:
The projected return on investment is 43.6 percent. Moore said that even though some buyers appreciate elaborate home offices, “It’s an individual preference. Many people would just use the kitchen table, the basement or an extra bedroom as home offices.” This project would cost approximately $27,300 to convert an existing 12 foot by 12 foot room into a home office with custom cabinets.
The projected return on investment is 46.5 percent. This project would cost approximately $72,200 to add a 200 square foot sunroom with 10 skylights. It will only increase the value of your home by $33,500. Moore said, “A sunroom is a nice thing to have, but it’s not something that’s crucial to most buyers.”
Upscale Master Bedroom Suite
The projected return on investment is 52.1 percent. This project would cost approximately $220,100 to add a 32 foot by 20 foot master bedroom suite that includes a gas fireplace, custom bookcases, a spa style bathroom, a walk-in closet and a bar/refrigerator. Moore says that not a lot of buyers want master bedrooms that are that fancy. She said, “I’ve sold $2 million homes that don’t have a bar in the bedroom. Most buyers are too frugal for that.”
Backup Power Generator
The projected return on investment is 52.7 percent. An entire house system costs approximately $11,400. While built-in generators are impressive, they don’t increase the value because you can buy a small portable generator for $150 or less at a home-improvement store. Moore said, “A lot of people figure they’d rather go the Home Depot route and have something that functions but isn’t so expensive.”
The projected return on investment is 54.7 percent. To update an existing two-car garage with drywall, molding, a modular storage system, fresh paint and an epoxy-sealed cement floor would cost approximately $80,500. Moore said, “It’s a good investment if you can use the garage yourself for a while, but not if you’re just putting it into sell your property. You’ll never make your money back.”
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