Remodel Home Ideas and Practices That Result in a Poor ROI

10:07 Sep 2023
Remodel Home Ideas

All house remodeling projects begin with remodel home ideas that they see or visualize in their mind along a need to understand how to achieve these desired improvement goals.

There is a major misconception that exist amongst homeowners that if you invest in remodel home ideas with a carefully planned home remodel plan that you will receive their money back and a premium.

Although in part this can be true, the reality is that much to frequently a poorly conceived plan or an ill-advised remodel project can have quite the opposite effect on your home remodels return on investment.

A disappointing result often happens when the owners attempt a major remodeling project without the professional assistance of a designer, decorator or a remodeling contractor.

It is the responsibility of a homeowner to do their homework required to determine if a home renovation or a home remodeling project is financially feasible and if you have the skill set to properly manage such a project.

The financial feasibility will provide you the assurance that you can afford such a project and secondly that such a finished project will be within the general value comps of the neighborhood.

Not all remodel home ideas meet the requirements of being affordable or resulting in a financial return on the investment.

It’s always helpful to have a well informed trusted adviser like a seasoned general contractor to guide you through the evaluation process.

Although even with professional guidance with remodel home ideas there are some projects that are a poor return on investment (ROI).

9 remodel home ideas and practices that result in underperforming home investment returns

We will discuss these 9 remodel home ideas and practices that typically will not produce favorable investment results;

  • Over Designing and Building for the Neighborhood
  • Overdue Remodel Maintenance Adds Little Home Value
  • Dramatically Changing the Architectural Style of a Home
  • Not Preparing a Whole Home Plan Design Before Remodeling
  • Selecting Poor Financially Performing Remodel Home Ideas
  • Over Doing Product Upgrading
  • Not Hiring a Professional Design Team
  • Cutting Corners
  • Selecting a Contractor Based on Cheapest Price

Remodel Home Ideas

Over Designing and Building for the Neighborhood

This is by far one of the most common and frequent mistakes that owners make with their home improvement projects.

Over designing and building for the immediate neighborhood produces less than the optimum market sales value.

This happens when owners have the money and have done their homework on the total price of the project, but have skipped the feasibility stage of understanding the impact on the future sales price of the house.

If the neighborhood does not allow for a premium market value sales price, it is ill-advised to design and build to a higher price point.

In other cases, this can result from a property owner electing to live out their days in their existing house.

They are not focused on their ROI, but rather the comfort and enjoyment of their house.

Depending on the actual neighborhood demographics, designing and building to satisfy your personal needs can result in a positive ROI if enough time passes prior to selling.

Overdue Remodel Maintenance Adds Little Home Value

This occurs when an owner expands the cost basis of the house without actually increasing the value of the property.

Examples of these types of home improvements can be home remodeling projects that the owner expects will boost the market value in preparation of selling a house in the short term.

Rather than catching up on home maintenance like painting or making general repairs an owner may start replacing major replacement products with the idea that this will increase the sales price.

This seldom results in a higher short term sales price. More often the opposite results happen.

The owner undertakes a number of home improvements that increases the need to raise the sales price to recover the improvements investments.

As a result, the house is now at a higher price with no significant difference observed by the potential buyers to warrant a higher price than the competing local homes.

The listed house sits on the market for a longer selling period causing the owners to finally drop their listing price in an effort to sell the home.

Dramatically Changing the Architectural Style of a Home

It does not happen that often, but an owner can purchase a house that they really do not like.

The owner may want a complete change the architectural style of a house of their old existing house. This is a very financially dangerous strategy.

It is difficult enough to design a well planned new house. Let alone take on the huge challenge to dramatically change an existing home’s architectural style.

For instance, it is very difficult and expensive to change a traditional styled two story home into a contemporary architectural styled home.

Replacing windows and adjusting rooflines would be more expensive than just building a new constructed house.

In nearly all situations where an owner has made a severe architectural style change in the exterior / interior of an existing house, the buying market has not reacted favorably.

Not Preparing a Whole Home Plan Design Before Remodeling

This is also a common miscue that owners typically make. Charging forward with a kitchen renovation or bathroom remodel can have a negative impact on the design and flow of the existing floor plan.

That is to say that if you opened up the kitchen to other rooms by removing walls, that the kitchens textures, materials and color scheme can overwhelm the room that is being incorporated.

The room loses its identity and can detract rather than enhance the appearance of the new kitchen.

The lack of planning for remodel home ideas is problematic and will lead to many mistakes and errors.

Selecting Poor Financially Performing Remodel Home Ideas

Not all house remodeling or house renovation projects are created financially the same.

There are very different financial results for every proposed home improvement project.

Attic insulation, a new front door and replacing garage doors have the best ROI of any of the house product replacement projects.

While new carpeting and extensive landscaping with an irrigation system typically perform poorly in recapturing your investment.

When it comes to major house remodeling projects, the best ROI are windows and doors, siding replacement and kitchen updates.

These house improvements traditionally return north of 80 cents on the dollar in the short term.

The worst performing financial house investments are swimming pools, sun room additions and general furniture built-ins.

Over Doing Product Upgrading

It is also common for owners to do house improvements in phases or one piece at a time.

They will replace appliances, plumbing fixtures and counter tops to give the house a richer finished appearance.

This strategy can lead to very poor financial results when it is time to sell. Although buyers enjoy and often demand these types of product upgrade features, they do not want to pay for them in the form of a required escalated sales price to recapture your investment.

This especially applies to investing in major remodeling projects and house product replacements in a house that the owner does not intend to live in for at least 5 years.

Items like roof replacement and AC compressors can also be questionable decisions if they are operating properly.

They may be written up by a house inspector for their age, but if they are working properly, it is in your financial interest to not replace them for the sake of selling the house.

Houston Remodel Home Ideas

Not Hiring a Professional Design Team

There are many DIY’s that do not want to spend the fees to hire a professional design and advisory team.

They either do not see the value or think that they can do just as fine of job as the pros.

This can be a major mistake if the owner does not have the required skills and experience to anticipate and navigate the issues that develop during house remodeling.

Preparing properly for a major remodeling project is much more involved than having someone provide you a design drawing.

Pretty photo images and a CAD drawing might get you a permit, but will not address the issues that come from hidden defects or covered structural degradation that is revealed during demo.

Cutting Corners

There is a major difference in carefully value engineering product and design features of a house remodeling project or the apparent cost savings measures of important design or construction factors.

For instance, an owner wanting to avoid the extra cost or hassle of having their new home addition reviewed by a structural engineering or building this addition without a building permit.

Cost cutting often results in sacrificing quality or eliminating best construction principles. An example of this would be conducting a major house remodeling without repairing the foundation settlement problems.

You may save a good deal of money but your new finishes are likely to be severely affected by continued house movement.

Selecting a Contractor Based on Cheapest Price

Although cost and value are very relevant decision-making factors, choosing the contractor with the cheapest price never translates to a good job.

Requesting a detailed proposal that specifies materials, brands and inclusions and exclusions is a must.

The proposal should list such items as permit fees, insurance provided and working hours with a schedule.

A contractors bid must be qualified and compared to an equally qualified bid to create any value for comparison.

In addition, the proposal should quantify the size of the project and discuss in detail the process to execute the scope of work.

Remember not all house renovations or house remodeling projects are the same. Each project needs to be examined from multiple perspectives to determine if it will make sense for you.

Comments are closed.