While home improvements may seem like a positive endeavor, but some renovations can actually hurt your wallet when it’s time to sell.

Homeowners seeking to maximize their return on investment should carefully research which renovation projects will yield the highest returns and avoid costly mistakes by focusing on the most profitable upgrades.

No Home Improvement Project Will Recoup 100% Of Your Cost

According to Remodeling Magazine’s 2021 Cost vs. Value Report, most home renovation projects return less than 75% of their costs when selling a house, with the exceptions being garage door replacement (93.8% ROI) and adding manufactured stone veneer (92.1%), making these two projects stand out as top choices for maximizing returns.

While some home renovations can bring significant returns, others can be major money pits. Despite this, many homeowners still invest in projects that yield a low or negative return on investment.

In this article, we will highlight the worst home improvements for ROI, helping you avoid costly mistakes and make informed decisions for your next project.

1. Upscale Bathroom Addition – 54.7% ROI

If you aren’t careful, a bathroom remodel can end up losing more of your money than you had planned at resale.

According to the Remodeling Magazine’s Cost vs. Value Report, an upscale bathroom remodel that expands the existing space from 35 square feet to 100 square feet, relocates fixtures, and installs electric in-floor heat, among other high-end upgrades such as a freestanding soaker tub, premium fixtures, and custom drawer base, may be impressive but does not generate a high return on investment.

Rather than investing in an upscale bathroom remodel, homeowners may want to consider simpler, more cost-effective options such as replacing broken tiles, updating an old backsplash or floor, or installing new countertops. According to some metrics, these cosmetic updates can provide a strong return on investment, with a potential $1.75 return for every $1 spent.

2. Midrange Master Suite Addition – 54.7% ROI

Adding a midrange primary bedroom to a house may seem like a valuable home improvement that would make a property more attractive to buyers, but it is often not a game-changer when it comes to selling a home quickly or increasing its value. A more effective way to evaluate the potential return on investment of such an upgrade is to research comparable homes in the area. If most homes in the neighborhood have primary suites, investing in a similar upgrade may be beneficial. However, if neighboring homes have fewer bedrooms, adding a primary suite may put the property at a disadvantage and ultimately reduce its appeal to potential buyers.

Instead of building a new addition, homeowners can repurpose existing spaces to create a more functional and valuable living area. Transforming an unused attic or combining two bedrooms (if there’s an extra one available) can be a cost-effective solution, saving up to 80% on the cost of a buildout. This approach not only reduces expenses but also makes better use of otherwise underutilized space.

3. Major Upscale Kitchen Remodel – 53.9% ROI

A high-end kitchen remodel can be a valuable investment for homeowners who plan to stay in their home long-term and enjoy the updated space. However, for those planning to sell their home, a major kitchen remodel may not provide a significant return on investment.

Upscale kitchen remodels, which can cost an average of $150,000, may not pay off for homeowners who plan to sell their property as they may not appeal to potential buyers’ personal tastes. The elaborate details and high-end finishes may actually decrease the chances of matching a buyer’s preferences, rendering the investment futile.

When considering a home remodel, it’s essential to ensure that the upgrades align with the home’s overall value. Luxurious and expensive renovations may not be justified in a modestly priced home, as they may not increase its value proportionally. It’s crucial to research what other homes in the neighborhood have done and whether the proposed upgrades are typical or exceptional, to avoid overspending on features that may not appeal to potential buyers.

4. Mid-Range Bathroom Addition – 53.1% ROI

Mid-range bathroom renovations, while improving the functionality and aesthetics of the space, may not yield the return on investment (ROI) that homeowners expect when it comes to selling their property. The ROI on bathroom renovations is often lower than expected, making it a less lucrative upgrade for homeowners who are looking to maximize their returns on resale.

The mid-range bathroom addition described, which involves creating a new 6×8 room off the existing house and over a crawlspace, is a significant undertaking that requires new fixtures, tile, and wiring. Despite the lower cost of around 75% compared to an upscale remodel, the return on investment (ROI) is expected to be even lower, making it a less desirable upgrade for homeowners looking to maximize their returns on resale.

Adding bathrooms is often most effective when they’re necessary, such as in cases where there’s no bathroom on the first floor or the primary bedroom is far from an existing one. Smarter investments in bathrooms typically come from simpler upgrades like replacing dated fixtures, installing new hardware, or updating outdated tiles and vanities, which can greatly improve the space without breaking the bank or yielding a low return on investment.

5. Upscale Bathroom Addition – 52.8% ROI

Adding a brand new, 100-square-foot master bath to the master bedroom can actually have a worse projected ROI compared to a mid-range bathroom addition. This may be because the high-end amenities, such as in-floor heat and luxury faucets, convey a sense of higher maintenance and upkeep costs, which can be perceived as a drawback for potential buyers. This can negatively impact the return on investment, making it a less attractive upgrade for homeowners looking to recoup their costs.

The return on investment (ROI) for an upscale bathroom addition can vary significantly depending on the region in the United States. For instance, in the Pacific region, a luxury bath addition may yield a higher ROI compared to other regions like the North Central United States. It’s essential to research comparable homes in your area to determine if an upscale bathroom renovation is a worthwhile investment in your specific neighborhood.

6. Upscale Master Suite Addition – 47.7% ROI

According to the CVV report, an upscale primary suite addition is characterized as a 32×20 foot room with a crawl space below and a spacious, attached bathroom. While this layout may seem luxurious, it also raises concerns for potential buyers, including the high maintenance costs and upkeep required due to the excessive space. Additionally, features like custom bookcases and a custom mantle over a high-end gas fireplace may be perceived as expensive add-ons that buyers may want to remove or replace, potentially detracting from the overall appeal of the property.

This type of renovation is not ideal for a home being sold, as the unique features may not appeal to potential buyers. If selling a home without a primary bedroom attached, it’s recommended to opt for a more understated and modest renovation project to maximize the return on investment.

7. Sunroom – 47% ROI

A sunroom can be an attractive option for those with a passion for gardening and wanting to expand their living space, but unfortunately, it’s considered one of the poorest return on investment (ROI) among home renovation projects.

It can be a costly renovation, especially if you opt for a more elaborate design featuring floor-to-ceiling windows, which can increase the price tag significantly. Additionally, maintenance costs for sunrooms can also be higher due to the unique glass structure and potential issues with condensation and temperature control.

Certain features or additions may not appeal to every potential buyer, which can ultimately impact the resale value of your home. It’s crucial to think about the potential long-term implications of your renovation choices and ensure that they align with your goals and priorities, as well as those of potential future buyers.

8. Swimming Pool – 35% ROI

Installing a swimming pool in your yard is often considered one of the most costly and potentially regrettable home renovation decisions. The cost to install a pool can range from $15,000 to $150,000, making it a significant financial investment that may not always provide a positive return on investment.

For homeowners in northern climates, the low ROI of a swimming pool is further diminished due to the limited usage period, resulting in an even lower return on investment of around 25%. Additionally, experts concur that installing an above-ground pool can actually decrease the value of a home, making it a potentially ill-advised renovation choice.

While a pool is a welcome addition to your home when the weather is hot, here are a few reasons why they’re still considered a bad investment:

• Pools require significant time and resources for maintenance, taking away from other activities and outdoor spaces.
• The space taken up by a pool often means sacrificing room for gardens, outdoor seating, or other recreational areas.
• Many homebuyers view pools as a liability, making them less desirable and potentially even a deal-breaker in a sale.

9. Home Theater – 25% ROI

Building a home theater can be a costly and unappealing renovation project. It offers limited appeal to prospective buyers, as it is a specialized feature that not all homeowners want or need. Furthermore, the return on investment for a home theater is often poor, making it a poor choice for those looking to increase their home’s value.

A state-of-the-art home theater can undoubtedly elevate the TV and movie watching experience, but it’s essential to consider that not everyone desires this level of luxury. To many potential homebuyers, a dedicated viewing room will be viewed as a space that could be repurposed for more practical or functional uses.

Instead of committing to a permanent home theater installation, consider a more flexible and adaptable solution for a high-end entertainment space. A premium custom entertainment center for the family room or basement can provide a sophisticated and stylish option for enjoying movies, games, and other activities without the long-term commitment.

Final Thoughts

While it’s true that some home improvements may not provide a significant return on investment, it’s essential to remember that home renovations can also bring joy and satisfaction to the homeowner. Rather than solely focusing on ROI, consider what matters most to you – is it a sense of pride and ownership, increased functionality, or a better quality of life? If you’re planning to move soon, prioritize projects that will appeal to a wide range of buyers and add value to your property.