For the most part, in real estate we associate the word "upgrade" with a positive improvement made to a home. However, not all upgrades are created equal. Instead of increasing your home's value, some upgrades can actually decrease the value.
If you plan to sell your home in the near future, here is a list of upgrades to skip so you don't end up disappointed with the return on your investment.
- A swimming pool. Having a swimming pool is not for everyone - they cost a lot of money and time to maintain. So keep in mind if you are putting one in, you will likely significantly narrow your buyer pool (pun intended) when you go to sell.
- Paving or landscaping your entire yard. While it may seem tempting to pave your entire backyard and avoid having to cut the grass ever again, this idea is likely to turn a lot of buyers off. If the buyer has kids or a dog, they will want some grass in the backyard for them to play on.
- Making changes that reflect your personal taste. While you're living in your home, you want to enjoy it. So if purple is your favourite colour, feel free to paint the kitchen bright purple. If you like red shag carpet, go for it! But as soon as you make the decision to sell your home, it's important to recognize that while you may consider the red shag carpet to be an improvement to your home, it's unlikely that most buyers will feel the same way. Either prepare to spend some money to neutralize the aspects of your home that you have "personalized," or expect home buyers to deduct the price of replacing the red shag carpet with hardwood flooring from your asking price. (And yes, that Hello Kitty house is real, and is a vacation home in Taiwan.)
- Combining bedrooms. If you decide to convert your three bedroom home to a two bedroom home, you will likely find you have fewer interested buyers when it comes time to sell. Especially if your home is located in a neighbourhood where three bedroom homes are the norm, not two bedroom homes.
- Updating all the bathrooms, but not leaving a bathtub. Upgraded bathrooms are almost always a good idea, but I've been seeing more and more homes where the upgraded bathrooms all feature standing showers and no bathtubs. There should be at least one bathtub in the house, otherwise families with small children will skip right past your house.
- Converting your basement to an apartment. Not every buyer is looking to be a landlord with an income suite in their basement. If you are thinking of converting your basement to an apartment, make sure there is a demand for it in your neighbourhood, you get the proper licenses from the City, and it is finished nicely. If you plan to convert the basement to an apartment in the span of a weekend, you're taking the wrong approach. Do it right the first time. No one wants to buy a home with a scary looking basement apartment.
- Hardwood that is inconsistent throughout the house. For the most part, hardwood is considered an improvement over carpet these days. However, if you are going to spend the money putting in hardwood, I would suggest making sure the hardwood is consistent throughout the house. Having light hardwood in the family room, dark hardwood in the dining room, and light hardwood on the stairs makes the home feel choppy and it just doesn't look good.
- Cramming in an additional bathroom. Just because you can fit a toilet and sink in a closet in the basement doesn't mean you should. And just because you can fit a washroom in the corner of your master bedroom doesn't mean you should either. And at the very least, if you are going to do so, make sure there is a door separating your bedroom from your en-suite bathroom. In two homes i have seen recently, there has been no door or separation of any kind between the master bedroom and the en-suite bathroom. Who wants to lie in bed and stare at your toilet?
- Putting in a brand new kitchen just before you sell. Kitchens are not cheap rooms to renovate so instead of forking over the big bucks to upgrade your kitchen prior to putting it up for sale, it may be a better idea to leave the kitchen as is, and let the buyer make the improvements to suit their taste. If you're not sure whether you should renovate your kitchen or not, I'd be happy to come take a look and give you my opinion.
- Splurging on high end finishes in a neighbourhood that doesn't support it. If you decided to splurge on a new Wolf Gas Range or a SubZero Fridge they will definitely help with the "wow" factor when you go to sell your home. However, if you are selling your home in a neighbourhood where the average sale price is $450,000, these types of high end finishes are not really supported in this price range and you shouldn't expect to see a great return on your investment for these high end finishes. If you are selling your home in a neighbourhood where the average sale price is $2,000,000, that's a different story.
Want some advice about whether an improvement you are considering for your home would be a good return on your investment? I'd be happy to chat with you about it and give you my opinion.