Renovations That Could Decrease or Increase Your Home’s Value

Recently I was thinking of making a renovation to remove the wall between two bedrooms to make one larger one for more space. Then I started researching.

Decreasing Rooms

Removing a bedroom is one of those home-improvement blunders that can ding a home’s worth, even if it creates a larger bedroom — or other living space — in its place.

The reasoning is simple: The more bedrooms a home has, the higher the price it can usually command.

Listing prices are set by looking at what comparable homes are selling for in the same market, and the number of bedrooms is an important characteristic used to compare two properties. When you start eliminating bedroom space, you’ve completely changed the comparable value of your home in the neighborhood.

In researching the typical home purchased over the last year was a single-family home with three bedrooms and two baths, and a total of 1,870 square feet, according to the National Association of Realtors’ annual Profile of Home Buyers and Sellers.

Big master bedrooms that resemble luxury hotel suites were once a popular home feature. And while there are certainly some buyers who will be wowed by that, the trend is changing. Homeowners with these big bedrooms often find that the extra furniture are places for clothes to collect and they have no desire to work at their bedroom desks, he said.

If you’re lucky enough to have a master bedroom on the first floor without having to deal with stairs, you’ll most likely want to keep it intact. Baby boomers, foreseeing a day when they can’t get up and down stairs as easily, will pay a premium for this feature.

All that said, the impact of removing a bedroom will differ depending on how many bedrooms you start out with. If you have a five- or six-bedroom home, you might have a bedroom to spare without too much of a financial impact. If you have several bedrooms but they’re small (say, less than 8 feet by 10 feet), you also might justify combining two. But keep in mind that a lot of buyers typically want separate rooms for their children, along with a guest room.

Of course, if resale value isn’t a concern, none of this matters at all.  Those who plan on staying in the house until they die — and there are a growing number of people who intend on aging in place — might not care at all about what the next buyer will want, he added. But if you’re at all concerned about your home’s value, you’ll probably want to discuss the potential financial impact of a renovation with your remodeler or real-estate agent first.

Removing closets

Several years ago, a real-estate agent had a client who took the closet out of the master bedroom and made a huge master bath. Big mistake. This change made the home much harder to sell. People need closets, They’ll walk in and count the number of closets per room. That is just one of the first things they will do.

Turning the garage into living space

Most people have cars they’d like to put a roof over, so getting rid of a garage makes a home less appealing to a lot of people. This renovation also will remove valuable storage space for many homeowners. While the importance of a garage may vary by location, 74% of recent buyers said that having a garage is extremely or very important, according to a recent survey of 7,500 people throughout the country by Crescent Communities, a real-estate investment and operating firm.  If you’re going to turn a garage into a family room, office or extra bedroom, leave the garage door on the outside. When you go to sell, a buyer can easily turn the space back into a garage without too much trouble.


An overabundance of wallpaper

Yes, wallpaper can be removed, but it can be a difficult endeavor, especially if there’s a lot of it throughout the home. And this goes for overdoing just about any finish.

All of this isn’t to say you shouldn’t take on any of these improvements. But if you do, if possible, do it in a way that you can put it back when you go to sell.

Guess which has most return on value?

According to the report, seven of the top 10 most cost-effective projects — nationally, in terms of value recouped — are exterior replacement projects. It deemed fiber-cement siding replacement as the project expected to return the most value, with an estimated 78 percent of costs recouped upon resale.

  • Vinyl siding projects were expected to return more than 69 percent of costs.
  • Steel entry door replacement was the least expensive project in the report, costing little more than $1,200 on average, and was expected to recoup 73 percent of costs.
  • Garage door replacements have seen prices fall more than 15 percent nationally and can be expected to return more than 71 percent of the cost.
  • A “midrange attic bedroom” is expected to return 72.5 percent of costs upon resale, in part because it is “the least expensive way to add a bedroom and bathroom within a home’s existing footprint.”
  • A minor kitchen remodel (budgeted at roughly $20,000) is expected to recoup 72.1 percent of costs.
  • A wood deck addition is expected to make back 70.1 percent of its price tag.
  • Among the least cost-returning projects are a sunroom addition and home office remodeling, both estimated to recoup less than 46 percent of what they cost.


Where you live can affect the return on these renovation investments, and the value of specific projects can vary region by region.

Highest returns by region

The Pacific region (Alaska, Hawaii, California, Oregon and Washington) has the highest average cost-value ratio in the country, at 71.3 percent, “largely because the high cost of remodeling in the region is more than offset by high values at resale,” according to the report.

Mid-Atlantic states averaged a return of 56.6 percent and East North Central states (Illinois, Indiana, Michigan, Ohio, and Wisconsin) recouped an average of 55.3 percent. West North Central states (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) saw the least amount of return, with 49.5 percent.

While fireplaces have traditionally been in demand, even they may be slipping in popularity.

Also sliding from favor are carpeted floors and vinyl and ceramic flooring (hardwood has become more desirable) and “upscale kitchen finishes” as granite countertops gradually give way to low-maintenance, more durable laminate countertops.

First and foremost, a seller should make sure their home is well-maintained and that it looks well-maintained. Before a seller starts making improvements like adding new energy-efficient windows — which are nice to have, but not something a buyer would truly care that much about — I recommend they make sure the structural integrity of the house is sound.

For example, if there is dry rot on the back deck or some issue with the roof or the foundation, these things need to be addressed, otherwise knowing that type of flaw exists will scare buyers off. It is not uncommon that a seller would have to spend $15,000 on dry rot just so that they can say the property is well-maintained.”

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