Remodeling Is a Poor Investment Strategy

Remodeling is also a cheap alternative to house-swapping, which can cost 10% of your current house’s value to real estate commissions, moving costs, and selling expenses. If your home update would cost less than the costs accrued by house-swapping, or if you can’t live outside your current neighborhood, the remodeling project might be worthwhile.

Remodeling Mistakes

If you are committed to remodeling in order to add resale value to your home, avoid the following mistakes:

• upgrading your house in any way that will make it bigger or fancier than most others in your neighborhood, as such remodels are unlikely to add much value;
• adding pools or spas, as they repel as many buyers as they attract, in most markets. These upgrades often require maintenance that buyers don’t want to hassle with, and they pose a drowning risk to young children.
• indulging in your personal tastes rather than aiming to please prospective buyers. Bold statements, such as brightly colored appliances, will repel many buyers.
• trusting TV shows that are based on the premise that remodeling is a true monetary investment. These shows are successful if people watch them, not if their claims are based in reality. Buying anything at retail cost and hoping to resell it at a profit – especially in the future, when the item or project has become dated – is rarely a winning financial strategy.

Low-Cost Alternatives to Remodeling

Real estate agents often recommend the following fixes, as they are likely to return more than their cost:

• Refurbish rather than replace. Refinishing or re-facing cabinets is usually less expensive than it costs to replace them. Re-glaze sinks and tubs to extend their lives and avoid the high price of replacing them.
• Rethink how you use space. While adding floor space may seem like a reasonable way to deal with a space crunch, you can probably achieve the same result by ditching the clutter. An off-site storage unit can be used to free up space in your house.
• Re-purpose a room. Never use the guest bedroom? Maybe you can turn it into an office or a dining room instead.
• Paint. Paint can transform the look of a room or house, and it is inexpensive and relatively easy to apply. Hire a professional or do it yourself.
• Brighten the house by removing heavy curtains, washing windows, and trimming back branches and bushes that cover windows.
• Deep-clean. Scour your house from top to bottom.
• Clean up landscaping. Trim bushes and hedges, rake leaves, clear downed branches, plant flowers and replace mulch.
• Use staging techniques. Rearrange furniture and décor to highlight the positive aspects of the room and create an inviting space. While you can do this one your own, professional staging services are contracted to tweak color and furniture to create an emotional appeal. Consider that a large segment of prospective home buyers will preview homes on the Internet, and staging can dramatically enhance a first impression.