Skip to content 
Recently, we have had to do some renovations, and it got me thinking about the balance of FIRE and how our home is a place to enjoy as a consumption decision, not just an investment.
It also turns out that just having newer appliances doesn’t mean better, so we’ve been having many repair people fix appliances that are conveniently out of the warranty window.
This spring, many FIRE-seekers in our community considered adding pools, which is a perfect example of such a decision.
Figure 1: ROI on Smile is Infinite
Renovating your home can be a great way to increase its value and enhance your living experience. But there are plenty of renovations that aren’t worth it.
Trends in home design come and go over the years, but some upgrades tend to stand the test of time. Many renovations can boost your home’s worth, yet it’s crucial to choose wisely and avoid overspending in areas that may not provide significant returns.
Smart Home Renovation Investments
For the purposes of this guide, we’ll assume that the priority is return on investment (ROI). Here are a few tips to keep in mind.
General Rules for Home Renovations
Never outspend your neighborhood: Even if you choose the nicest tile and light fixtures, other houses in your area will influence the resale price of your home.
Physicians and pharmacists, Register with Incrowd for the opportunity to earn easy money with quick "microsurveys" tailored to your specialty.
Avoid taking out loans: Instead of using a Home Equity Line of Credit (HELOC) or additional loans, save up and pay in cash. It might take longer, but it’s safer and keeps you out of debt.
Think about resale: If you plan to sell in the next few years, aim for improvements that will appeal to future buyers. You don’t have to cater to everyone, but neutral changes attract more buyers.
Consult your Real Estate Agent: In the past I have called my real estate agent to get their input on the relative value: “Is adding a sauna worth it? “No doc…”
Neutral Designs for Resale
If you’re planning to sell your home in the next few years, go for neutral improvements. This doesn’t mean every choice has to be bland, but a more universal design can help attract future buyers. Neutral colors and classic styles are a safe bet.
Budget and Timeline
Think about your budget and timeline for renovations. Be realistic about how much you can spend and how long it will take. It’s better to complete projects in stages with saved money than to rush and go into debt.
This ensures you enjoy the process without unnecessary financial strain.
Simple Upgrades Can Add Value
Small changes, such as a coat of classic-colored paint or updating fixtures, can significantly enhance a home’s appearance and value.
Choose timeless options for fixtures and finishes to maintain appeal over time. Simple upgrades are often cost-effective and have a high return on investment.
Renovations That Really Pay Off
Some renovations aren’t just more preferable than others, they can actively increase the value of your house. These could include additional bedrooms, door replacements, bathroom renovations, and the like.
Adding a Bedroom
Adding an extra bedroom can increase your home’s value. More bedrooms usually mean more appeal to potential buyers, especially families. Plus, it’s a versatile space that can be used for guests, hobbies, or home offices.
Garage and Front Door Replacement
Replacing your garage door or front door can offer a great return on investment. A new front door can make your home look inviting, while a new garage door can improve your home’s overall curb appeal.
Flex Space for a Work From Home Office
One of the smartest upgrades you can opt for is creating a dedicated space for remote work. This area, sometimes called a call room, is more important as working from home becomes common. It can be a small room or a section of another room.
Bathroom Improvements
Simple updates to your bathroom can go a long way. Add newer vanities, mirrors, and tile to give it a fresh look. Modern touches make a big difference.
Open Floor Plan Conversion
Removing unnecessary walls can open up your floor plan and make your home feel larger and more inviting. Formal living rooms are less popular these days, so creating a seamless flow between your kitchen and living areas can be very appealing.
Kitchen Backsplash
Change the backsplash to instantly enhance the look of your kitchen. Stick to neutral colors and timeless designs, like subway tiles, to avoid trends that can quickly go out of style.
Flooring Options
Neutral-tone hardwood floors are a favorite and last a long time. You can opt for luxury vinyl planks for a similar look at a lower cost. Both options add value and are appealing to potential buyers.
Paint and Aesthetics
A fresh coat of paint can do wonders for your home. Stick to classic colors like tan, gray, or white. It makes the home look cleaner and newer, which appeals to buyers. It also helps them envision what might become of the house when they move in.
Closet Maximization
Renovating your closets to maximize space is a relatively inexpensive project with high returns. Custom closet systems help potential buyers see how they can organize and use the space effectively.
Fixture Updates
Replacing fixtures like door knobs, light switches, and outlet covers can modernize your home. These small changes are affordable and make your home look more cohesive and updated.
Home Renovations That Aren’t Worth The Money
These are some renovations that may not be the best investment if you’re looking to boost your home’s resale value
Swapping Out Carpet
If you’re thinking of replacing the carpet, you might want to reconsider. Many new homeowners prefer hardwood floors, tiles, or laminate. Carpet can be a turnoff because it’s easy to stain and can hold odors.
You might be better off investing in more durable flooring options. This is especially true if you have kids and pets.
Personalized Decor Choices
When making renovation choices, avoid overly personalized or unique designs. Bold paint colors or very specific decor themes can make your home less appealing to potential buyers. Stick to neutral and classic designs that can attract a wider audience.
Altering Room Configurations
Removing walls to create larger rooms might sound like a good idea, but it can backfire. Families usually prefer more bedrooms over larger spaces. A home with fewer but large bedrooms can be less attractive to buyers looking for more rooms for kids or guests.
Cutting Down on Home Features
When upgrading your home, don’t eliminate important features. For instance, if your home has both a bath and a shower, keep them. Families with young children might look for homes with baths, and removing one could reduce your home’s appeal.
Installing High-Tech Gadgets
Remember surround sound? Remember adding USB-A to outlets? Adding built-in technology and electronics can be tempting and fun if you like gadgets.
But technology changes fast, and what’s hot on Tiktok will fade fast. Potential buyers might see these as burdens rather than assets, and they may prefer to add their own newer gadgets.
Building a Swimming Pool
Swimming pools can be fun, especially in warmer climates. However, they’re very expensive to install and maintain. Many buyers may not be willing to pay more for a home with a pool.
Constructing a Sunroom
A sunroom can sound like a charming addition, but it often doesn’t add much value. The cost to build a sunroom can be quite high, and many potential buyers might not see it as a necessity.
Using Wallpaper
Wallpapers can quickly go out of style, and they’re not for everyone. Removing or replacing wallpaper can be a hassle. It’s better to stick with paint, which is easier to change and more universally liked.
Adding Outdoor Fire or Water Installations
Outdoor fire pits and water features look beautiful but can be very costly. They also need regular maintenance, which might deter potential buyers. Most people would rather have a versatile outdoor space they can customize to their liking.
The key is to keep things neutral, versatile, and practical to appeal to a broad audience.
Final Thoughts
Remember the days when shiplap became a must-have for home renovations? Trends come and go, but some upgrades stand the test of time and add real value.
Winston and I decided to install a pool. Though it’s expensive and won’t fully pay off in resale value, we’re doing it for our enjoyment. It’s crucial to spend wisely and make sure you’re financing renovations with cash.
To manage your home renovation budget, I recommend using the EveryDollar app. It helps track savings goals and monthly expenses.
EveryDollar is a budgeting app designed to help manage your finances effectively. It lets you keep track of your monthly expenses and savings goals. If you’re planning a home renovation, this app can help you allocate funds and ensure you stay within your budget. It helps me:
- Track spending categories
- Monitor month-to-month expenses
- Set and achieve savings goals
Renovating your house can be a fun experience, especially if you manage to stay under your budget. As long as you can raise or maintain the resale value, the sky’s the limit!
