The 12 Home Improvements That are NOT Worth Investing In
by www.SixWise.com

Homeowners are typically driven to make home improvements for two major reasons. One, they want to change something to make their own quality of life better (such as adding another bathroom or expanding the kitchen), or, two, they are thinking of selling the home and want to fix things up to stay competitive and get their asking price.

In the former case, just about any home improvement is worth investing in, assuming it will make YOU happy and you have the money for it. Just keep this tip in mind: If it will cost more than 10 percent of your home's value to fix it up to your heart's content, you're better of moving.

This is because it costs about 10 percent of your home's value to move, according to the American Homeowner Foundation, so if you have extensive home improvements in mind (and you can bear the thought of parting with your home), it makes more sense financially just to find a new one with the features you want.

However, remodeling with the second scenario in mind -- for the purpose of reselling your home or at least one day having the hope of capturing a good return on your investment -- the rules are quite different.

"A common misconception among homeowners when it comes to home remodeling and renovation," according to the Appraisal Institute, "is that cost equals value. However, not every renovation or remodeling effort will pay off at closing."

So before you start tearing down walls or cabinetry, read through the following home improvements, which are among the WORST investments you could make in your home.

(Note: Improvements are ranked according to Remodeling Magazine's 2006 Cost vs. Value Report. National averages for mid-range improvements are cited. For comparison, the average home improvement returned 75 percent to 80 percent of its cost in 2006.)

1. Remodeling your home office. The average cost recouped by remodeling your home office is just 63.4 percent, according to Remodeling Magazine's 2006 Cost vs. Value Report.

2. Sunroom addition. Average cost recouped 66.3 percent.

3. Family room addition: Average cost recouped 71.5 percent.

4. Master suite addition: Average cost recouped 72.6 percent.

5. Roofing replacement: Average cost recouped 73.9 percent.

6. Bathroom addition: Average cost recouped 74.9 percent.

7. Deck addition: Average cost recouped 76.8 percent.

8. Basement remodel: Average cost recouped 78.8 percent.

9. Attic bedroom remodel: Average cost recouped 79.9 percent.

10. Major kitchen remodel: Average cost recouped 80.4 percent.

11. Two-Story addition: Average cost recouped 83.2 percent.

12. Window replacement (vinyl): Average cost recouped 83.7 percent.

Surprised by the Results?

Some of the results may be a bit surprising, namely the bathroom addition and kitchen remodel, which are normally thought of as good home investments.

"Kitchens and baths tend to pay back almost what you pay for them," says Robert Wieboldt, executive vice president of the Long Island Builders Institute. "It also makes the house very much more sellable."

However, beware of going overboard. A minor kitchen remodel was a better bet than a major one, returning over 85 percent of the investment in 2006. Meanwhile, a bathroom remodel was also worthwhile with 84.9 percent of costs recouped. While adding a bathroom is often beneficial, you'll lose out if you add more bathrooms than bedrooms (such as three bathrooms in a two-bedroom house).

Other notoriously bad renovations not mentioned in the report include:

• Pools and hot tubs (cost recouped around 30 percent)

• Gazebos

• Installing unique-shaped windows

• Installing new carpet (unless it's very worn)

What Can You do to Add Marketability to Your Home?

If you're thinking of selling your home, there are a number of ways (ranging from simple to more complex) to increase its marketability, according to the Appraisal Institute, including:

• Sticking to what's standard in the neighborhood (and in the home's style)

• Considering projects that add square footage to the home (but not beyond what's normal in the community)

• Basic upgrades, such as new paint in neutral colors and new fixtures

• Cleaning your house, including baseboards, light fixtures, ceiling fans and carpeting

• Improving curb appeal by cleaning gutters, removing dead plants and touching up paint chips

• Removing clutter

Recommended Reading

Which Home Renovations are Your Best Investments?

Amazing Facts about U.S. Homes & Home Owners, and the Most Common Styles of Home in the USA

Sources

Remodeling Magazine: Cost vs. Value Report 2006

The Appraisal Institute

Newsday.com