It is debatable whether your home is truly an investment, though it's common to hear houses billed that way. Even so, it's in your interest to maximize home value, and strategic home improvements can provide a substantial payoff (even if it's years or decades down the road).
Like all investments, there are high-ceiling home runs (like purchasing a boatload of Amazon stock in 1998) and obvious missteps (like sinking Johnny's college fund into penny stocks).
If you're considering a home improvement assuming it will accelerate your home's value upward, think twice about these (or, at least, likely) dead-end investments. Using Remodeling Magazine's 2023 Cost v. Value Report and other sources, we eliminate speculation and pipe dreams in favor of hard numbers.
1. Upscale Primary Suite Addition
This is a pitfall primarily for the well-to-do. While you may be familiar with the primary or master bedroom, a primary suite is a level up from the standard master bed.
A primary suite might have a walk-in closet, an attached bathroom with his-and-hers sinks (and even showers, in the ritziest cases), an in-room sitting area, and other fine touches. However, according to Remodeling Magazine's 2023 Cost v. Value Report, those who invested in a primary suite recouped only 22.7% of their costs on average.
2. Upscale Bathroom Addition
Few home features can breed resentment and fistfights as much as a shared bathroom. However, don't expect an added bathroom to be a lucrative investment, even if it substantially increases intra-familial harmony.
On average, homeowners recovered only 26.6% of their investment in a new bathroom. Therefore, your choice of adding a second (or third or fourth) toilet, sink, and shower in your home may depend on how long you plan to live there.
3. Upscale Kitchen Remodel
Upgrading an outdated kitchen is one of the most common, headache-inducing jobs for homeowners. While marble countertops, stainless steel appliances, and custom wood cabinets enhance the experience of making pasta salad and chicken picatta, the upgrades don't typically pay for themselves.
In fact, those who do major upscale kitchen remodels recovered only 31.7% of their spending, on average.
4. Upscale Bath Remodel
Based on a decade of data, completing an upscale bathroom remodel has never been less valuable. The gulf between the average spend on a new tile shower, updated fixtures, and fine bathroom cabinets and the added value to the home is massive.
The latest data suggests you'll recoup only 36.7% of your investment in a top-of-the-line bathroom remodel.
5. Composite Deck Addition
Composite decking, including Trex, is often beautiful, sturdy, and built to last in even the harshest elements. However, since those who install these decks recover only 39.8% of their investment on average, composite deck jobs are not sturdy investments.
You may justify this expenditure if you foresee years of family barbecues and morning coffee sessions on your new deck. If you plan to sell your house in the next few years, you should forego the new deck. A wood deck is only a slightly better investment, losing homeowners about half of their installation costs.
6. Metal Roof Replacement
A new roof is often a necessity. Whether a trickle of water hits your head as you watch Seinfeld reruns or an inspector reminds you that your shingles are 20 years old, replacing the materials overhead is sometimes a must.
If you are considering an elective roof replacement, know that a new metal roof generally returns only 48.9% of the cost once you sell the home. On the other hand, those who go with asphalt shingles recoup 61.1% of the cost on average.
7. Grand Entrance
They say first impressions are everything, but investing heavily in your home's grand entrance could be everything that's wrong with your remodel plan.
Investors spent an average of $10,823 replacing doors, moving lights, and upgrading their outdoor entryway in 2023. Yet, those homeowners saw only a $5,457 enhancement in their home's value as a result.
8. Wood Window Replacement
Windows are another home upgrade that often results from necessity. Water leaks, excessive drafts, and critter infestations can signal outdated windows, but some falsely assume new windows will return their value when the home goes to market.
In 2023, those who installed new wood windows lost an average of 38.8% of the money they invested. Vinyl windows were a more cost-effective enhancement, as those homeowners lost only 31.5% of their investment.
9. Fiber-Cement Siding Replacement
A home's outward appearance goes a long way in boosting resale value. However, fiber-cement siding (like clapboard) tends to be a questionable investment.
The fact that homeowners who installed fiber-cement siding recovered only 88.5% of their expenses is nothing to lose sleep over. However, this isn't what you'd call a winning investment—it's a loss.
10. Garage Door Replacement
Remember, we are talking solely about the financial value of making certain upgrades. If your garage door has more dents than a 20-year-old NASCAR or squeaks like your dog's chew toy, it may be time for an upgrade. Just don't expect to retire off the proceeds.
Those who installed a new garage door in 2023 only saw a 2.7% return on the money they sunk into the door.
11. HVAC Conversion
If you peruse Zillow, you'll find no shortage of listings advertising “new HVAC,” followed by an offensive number of exclamation points. While some homeowners have no choice but to replace or convert their HVAC system once the air stops flowing, others hope it will help their home fly off the market.
Unfortunately, those homeowners saw only a 3.5% return on their air-vestment in 2023. That's a lot of headache for a modest chunk of change.
12. A Pool
Many homeowners have kids, a desire for low-impact exercise, or large friend groups that will fawn over the new pool they install. Others, though, will balk at the prospect of paying tens of thousands more for a pool they plan on using only a few times a year (and certainly don't want to pay to maintain).
The relative value of installing a pool generally depends on the demographics of the buyer market.
13. A Home Office
The great home-office migration of 2020 has proven to be a long-term office exodus for many. Yet, many workers eagerly (or begrudgingly) returned to the office once permitted.
A home office can be a compelling selling point for the buyer who works from home. Others, though, will not assign the office a value equal to your installation costs.
14. Storage Sheds (and Other Outdoor Amenities)
The shed you saw as essential, or the cobblestoned veranda you grilled so many steaks upon, may look entirely different to an otherwise motivated buyer.
Anytime you reduce open space in a backyard, you risk losing someone who would rather start with a blank design slate. For this reason, permanent (or difficult-to-move) outdoor amenities often present an investing risk.
15. Carpet
Wall-to-wall carpet can be the ideal antidote to cold winters, animals with long nails, and a lack of play-worthy space for the kids. However, carpet does not typically convey value, and it opens a can of questions in the minds of potential buyers.
What's under this carpet? What unknown fluids are these fibers concealing? How much will I have to pay to replace this carpet with vinyl plank? These are all questions that could make the new carpet a failed investment.
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