“The size of the yard is a major factor for buyers,” she says. And if the house crowds the yard, it doesn’t matter how upgraded the inside is.
One of the most financially dangerous over-improvements is outsized additions that are either too big for the neighborhood or too large for the lot, she says.
5. Play ‘count the bedrooms’
It’s not always the major renovations that cause problems at resale, Severance says.
One thing to watch: the number of bedrooms, relative to the rest of the neighborhood.
If you have four or fewer bedrooms, then converting one into a walk-in closet or taking that space to add on to an adjoining room could make your house worth less when you sell, Severance says.
Keep Enough Bedrooms
“Demographically, Americans are having fewer children,” she says. For the most part, buyers “don’t need these six- and seven-bedroom houses anymore.”
But, depending on the neighborhood, a smart buyer keeps at least four bedrooms, she says. If you want to style any of them as hobby rooms or man caves, that’s fine, Severance says. Just avoid changes that require actual renovations — like knocking out or moving walls.
6. Renovation = personalization
You want a swimming pool. The next buyer? Not so much. With every renovation you make, you personalize your house and customize it for your own use.
And that’s one more reason to improve—and over-improve—for yourself alone. Special amenities that you consider an upgrade may not have any value for the next buyer, Severance says.
Some will see your sparkling pool as luxurious, even glamorous. Others could view it as a maintenance hassle and a liability, she says.
Dana Dratch writes about mortgages and other personal finance topics for Bankrate.com.
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