5 Home Remodeling Projects with Poor Resale Value

Homeowners who are considering renovations are in luck because the remodeling market is growing: The Remodeling Market Index rose to 57 in the third quarter of 2013, which represents the highest value since the first quarter in 2004, reports the National Association of Home Builders. Despite this flush of growth, not all home renovations are created equal. If you’re considering remodeling, stay away from these high-cost, low-resale value projects.

1. Master suite—An oversized suite bedroom with his and her walk-in closets, a deep Jacuzzi tub and a built-in kitchen nook for your espresso machine sounds perfect. However, deluxe master suites use only the finest quality resources, and come with a high price tag as a result. Such a renovation drives up your resale price but can leave you with a glut of buyers unwilling to inherit your dream suits. For the same amount of money, a buyer could purchase a brand new home that incorporates similar master suite features with a better layout. In general, you can expect to spend $220,086 and recoup 52.1 percent of this cost.

Photo by Jeremy Levine Design via Flickr

2. Backup power generator—While there are exceptions to this rule, a backup power generator generally isn’t a good expense if you plan to resell. Generators have an average cost of $11,410 and typically return 52.7 percent of the cost. If you live in an area prone to natural disasters and power outages, it does make sense to install a generator to provide power during these emergencies. For the majority of homes, though, this isn’t a good expense.

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3. Sunroom—At first glance, this sounds like a fine idea. Sunrooms tend to be airy and full of light, and buyers generally like open space and light. However, the average sunroom costs $72,179 to build and only returns 46.5 percent of that investment. Any addition to a home, such as a sunroom, is a renovation that should not be taken lightly. These renovations require specialized equipment, such as a backhoe rental and exterior scaffolding. If you’re adding an entire second story to your home and have already rented the equipment for this purpose, then a sunroom isn’t a bad idea. But don’t complete this project solo. Add a home deck as well, which averages a return of 77 percent of its costs.

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4. Garage—A garage offers secured car storage and space for home hobbyists and pack rats, so it may seem like a good investment. However, garages are expensive—typically costing $48,806—and return 63.7 percent of the value when you sell.

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5. Home office remodel—A home office is practical for those who work from home, but it’s a highly specialized room and one that doesn’t return much money when you sell. Generally, homeowners recoup about 43.6 percent of the money they spend on the remodel, an average of $27,292, reports Remodeling Magazine. If you do create a home office, use your funds to turn the room into a multipurpose space that you can work out of but use for other reasons as well.

Photo by Jeremy Levine Design via Flickr

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