7 Home Improvements with the Worst ROI

June 20, 2022

7 Home Improvements with the Worst ROI
By, Lisa Roberts
It’s safe to say that everyone has a few little aspects of their home that they want to improve. But have you given any thought to the fact that not all upgrades are genuinely good financial investments? Think about the return on investment you may expect (ROI). Unless you are able to do the work yourself, a large home renovation does not guarantee that it will pay for itself when the property is put up for sale in the future. To make matters even worse, some house modifications are more “backward” than others. So, if you’re considering renovating, take a look at these 7 home improvements with the worst ROI first.

1# Additional bathroom

It does seem like an excellent idea at first glance, but you might want to think this through. True, buyers (especially big families) appreciate additional bathrooms in the house. But, when you look at the numbers, this doesn’t appear like a quite good investment. When the time comes to sell, the return on investment of an extra bathroom is roughly 58 percent. So, if you’re planning on selling, this might be the investment to skip. 
Work with what you got
Even though installing an additional bathroom is not profitable, making the most of what you have certainly is. Staging your bathroom before selling is essential; if you do it right, it can significantly increase your ROI. It might be a good (and certainly interesting) idea to follow some Feng Shui rules while you do that. Why not use an ancient secret to your benefit?

2# Sunroom

Does spending a quiet day in your sunroom, reading a book, and letting your mind wander make your heart skip a beat? As the summer is on its way, probably now more than ever. However, adding one more to your current floor plan would just cause you to squander money. This is one of the hidden costs of homeownership you can’t see at first glance. The typical cost of adding a sunroom to a house in 2015 was $75,700. Still, it only contributed an additional $36,700 to the property’s worth. And since sunrooms sometimes do not have heating, they are only useful for a few months out of the year in most climes, which does not equate to getting your money’s worth out of the investment.

3# Solar panels

Solar panels are undeniably an environmentally beneficial enhancement. But, you shouldn’t count on most buyers using that fact to their advantage when making a purchase decision. So, the upgrade cost versus the rise in value often ends up in a loss of money. Even if they successfully bring your energy expenses down, it may take many years until the returns on investment are sufficient to cover the original cost of the solar panels.

4# Huge areas and wall-tearing

It is a bad idea to knock down walls in your home to make one huge area, even if you do not need the guest bedroom or office space that you set up. This restricts the number of bedrooms and the practical usability of the property, which will obviously rule out those purchasers who require the additional bedroom. As soon as those walls are knocked down, the value of your house will immediately drop to reflect the change.

5# Walk-in closet

For example, the same rule applies when converting any access room to a walk-in closet. It would seem that the tiny nursery might be put to greater use as storage space, but turning any bedroom into a walk-in closet is a bad idea. This is true regardless of how small the bedroom in question is. This influences buyers psychologically – they can’t get past the notion that your property is now “smaller” or provides “less” than comparable properties in the region. So, best leave the wall tearing to the purchasers. 

6# Expensive kitchen hardware

You might feel like having space-shuttle-like kitchen hardware may wow the potential buyers. But, truth to be told – it won’t. If you take a look at the numbers, adding an expensive wine fridge and pot filler faucet will make your ROI only about 59.7 percent. Why is that? If you try thinking like a buyer, you’ll find that most of them are not really thrilled with the idea of huge energy drains in their potential new home. So, yes, a fancy kitchen might help you improve your cooking. But is it really worth the extra bucks you’ll lose?
There are more affordable options
Since renovating and kitchen before selling and moving is an overall good idea, you might still want to do it, but in a more affordable way. Professional movers suggest picking up some inexpensive staging and renovating ideas online and diving into affordable improvements. It is possible to do this on a budget and make it look stunning and presentable to the buyers. 

7# A swimming pool

While the idea of having a swimming pool in your backyard to cool down on a steamy summer day may seem appealing, the reality is that adding one might potentially lower the value of your property. The expense of upkeep is rather high. Some individuals do not want to see it, some do not wish to use it, and others are required to be there to ensure no issues with it. Also, you’ll need to put much more effort into it before selling. It will significantly enhance the curb appeal of your home. But, when you put all the pros and cons on paper, it’s not something you should undertake with the intention of getting money from it.

Those are not the only home improvements with the worst ROI

Unfortunately, many home improvement projects don’t return the money you invested in them. ‘Honorable’ mentions include:
  • Building a second story
  • Expensive surveillance system
  • A pergola installation
So, there you have it. There are so many good ideas that will make your home stand out in the market. But, these are not those. These are the home improvements with the worst ROI, and you should probably avoid investing in them. 
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