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Podcast

3 Home Improvements That DON’T Add To Your Home’s Value

Performance Property Real Estate Question

Q: There are so many improvements we can make on our home, I don’t know where to start. What do you think? Anne, Nutley, NJ

A: One way to narrow your home improvement choices is by eliminating the ones that add the least to your home’s value. Here are 3 home improvements that don’t add much to your home’s value:

1. Swimming Pool

Unless you live somewhere that’s hot for most of the year, a swimming pool won’t add much to your home’s value. The average cost to build a pool is over $40,000 and the ongoing maintenance of a pool can cost as much as $5,000 a year! Also, a new pool will likely increase the annual cost of your homeowners insurance. My parents have a pool, so I’m sure I’ll hear from them about this episode but they bought a home with a pool rather than installing one after they bought their home.

At most, a new pool could increase your home’s value by 5-10%, which compared with the cost of installation, the increased insurance cost and the cost of ongoing maintenance generally means that the cost outweighs the potential financial gain.

2. Wall-To-Wall Carpeting

Although some people prefer durable carpets with padding in bedrooms, most buyers and homeowners prefer hardwood floors throughout their home and elect to remove carpets especially when they are old or of poor quality.

The highest percentage of cost recovered for interior home projects is from refinishing hardwood floors at almost 150% recovery of their cost, and new hardwood flooring at almost 120% recovery of their cost.

3. Built-In Electronics

The best home improvements increase prospective home buyer interest. Built-in electronics can actually turn away prospective home buyers particularly as they age over time because they can quickly become outdated and obsolete. I visited a home recently that I’m sure had state-of-the art built in electronics back in the 80s or 90s that now is an obsolete eye sore that despite what the homeowner mistakenly believed did not increase the value of his home.

One caveat I will add to this episode is that one of the main benefits of owning a home is that you can do what you want with it, so if you are the type of person that will actually use a backyard pool every day while you own a home, then it may make sense to install a pool regardless of how much it costs versus how much it increases a home’s value. Thanks for your question, Anne.

For more real estate tips and information visit my blog at geraldlucas.com.