Home Renovations That DON’T Add Value

Lately I have been noticing something that is not terribly uncommon out in the world of home ownership. Big projects that bring high expectations of gratuitous returns for home owners, but that don’t actually payoff at all. Well, at least not in added equity, or higher sales prices compared to nearby competition.

It is important for home owners to understand that there are three types of home renovations out there:

  1. Renovations that add value
  2. Renovations that bring a home “up to value”
  3. Renovations that accomplish little

Today I want to focus on the 2nd and the 3rd, and let it be noted that sometimes there is a grey area between these two.

EXAMPLE 1: A yard that has relatively poor drainage, which does not cause direct issues in the home, but is a nuisance for the owner who wants to make use of the yard.

Depending on the severity of the problems it can take 10’s of thousands of dollars to make any meaningful improvement to a yard’s drainage. Often times the complication of this can increase if neighboring yards could be impacted by your work. In any case, you bring in the back-hoes and the BobCats, dig trenches, move dirt, pour stone, cover it all back up again and plant grass.

Any buyer approaching the house simply sees the grass. They don’t see how this 10’s of thousands of dollars should add any value to the home. If anything it only means the home is now back on par with it’s competition that may or may not have any known drainage issues. In the end it is quite possible the buyer would actually be willing to offer the same amount with or without all this work unless the yard was heavily damaged without it, in which case they would have looked to get the house below market value. So, at best what has been accomplished is the home has been brought back up to value, but no value has been added above and beyond nearby sales.

EXAMPLE 2: Digging up your driveway and installing expensive brick or stone pavers to create a high end look and feel, but no one else in the neighborhood has done the same.

In this case the owner is putting themselves on an island, and is spending money they will not likely recover to do so. It is actually possible that standing out from the neighbors in this way could detract value as most buyers want their home to fit in with the neighborhood. There is always a chance that this particular owner starts a trend and eventually you need to redo your own driveway in order to keep your value, but I don’t recommend being among the first.


I use these two examples to make the simple point that, as you consider the major projects you are going to take on, research the market value of those projects OR at the very least take into account the amount of time you expect to spend in the home enjoying the fruits of the outcome. As a general rule: if a buyer can’t see it, they are unlikely to pay more for it. Also, if a buyer CAN see it, but doesn’t like it, they will offer low or look elsewhere.




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