Are you wondering what the worst home renovations are for return on investment in Massachusetts?
Over the years, while working as a Massachusetts Realtor, I have learned that many folks do not realize the correlation between improving their homes and the corresponding return on investment.
So many people blindly assume that every improvement they make to their home will bring an automatic 100% return or close to it.
Unfortunately, this is not the case—far from it. One of the best home improvements you can make is a remodeled kitchen, which generally only brings a 75-80% return!
I don’t know how many times over the years I have provided a comparative market analysis on a seller’s home, and they were disappointed to find out the value was not quite what they expected.
This can often be traced to money invested in the home in places with a meager return.
Home Improvements With Low ROI in Massachusetts.
What Are The Worst Returning Investments in a Home?
If you are selling a home soon, making these improvements or renovations would not be wise. It is like throwing money out the window.
Swimming Pools
First, I should mention that adding a swimming pool somewhere other than Massachusetts may increase a home’s value. You can genuinely enjoy a swimming pool in Massachusetts for around three months.
The weather in the New England states is not the same as down south or out west in Arizona, where temperatures remain much warmer for a more significant part of the year.
Swimming pools are generally far more expensive to install in Massachusetts because of our rocky soils. The cost of an in-ground swimming pool can vary quite a bit depending on the size and whether it is a gunite or liner pool.
On the lower end, a liner pool will cost around $50,000 or more after you factor in the pool, fencing, landscaping, etc. A luxury swimming pool can quickly cost upwards of $100,000 if you go all out with an excellent design and frills, such as a cabana, fireplace, and fancy surfaces around the pool.
When installing a swimming pool in Massachusetts, you should consider the enjoyment you will get from having it.
Do not expect a good return on your investment. Swimming pools can often be a detriment when selling a home. Many buyers will not buy a house with one, no matter how beautiful it is.
Are there times when a buyer is specifically looking for a pool? If you are lucky, you may find a buyer who will pay a little more for a home with a pool. Don’t expect it to be close to the money you have sunk into the ground.
Pools Don’t Have Great ROI in Any Cold Weather Areas
Devin Stevens of Canmore Real Estate Group knows the value or non-value of a swimming pool.
“I have had clients with pools that think they will get a lot more for their home since they have a pool, but that’s not usually the case, especially in colder climates. When homeowners think about renovating their homes, they often consider projects that can boost the property’s worth.
However, not all upgrades result in the desired payoff. For example, installing a swimming pool is a renovation that might not bring back the expected value when selling the house. In colder climates, the weather limits a pool’s use, making it less appealing to buyers. The ongoing upkeep, costs, insurance fees, and need for winter protection could prevent buyers from drawing them in.
So, while adding a swimming pool might seem like an improvement to your home, it’s essential to consider how suitable it is for your climate and what buyers are looking for. Investing in a swimming pool in colder regions could cost you more than you’ll gain back when selling your home since installation and maintenance expenses are unlikely to be fully recovered through the sale price.
Homeowners should focus on enhancements universally known to increase property value, such as kitchen remodels, bathroom upgrades, or energy-efficient changes—these are more likely to boost their home’s appeal and return on investment.
A New Septic System
A septic system is one of the worst home improvements for ROI.
While you would never hear a couple say, “Hey honey, what do you think about getting ourselves a beautiful new septic system?” Many homeowners incorrectly assume a buyer will give them something because they have one. Fat chance!
Replacing a septic system is one of a homeowner’s worst nightmares. The cost involved with installing a new Title V system can put a massive dent in your wallet.
The cost of replacing a Massachusetts septic system can vary greatly depending on the soil and the groundwater level. If harsh soil conditions and a high water table exist, you could shell out $40,000 – $50,000 or more to install a new system.
Even if the soil conditions and water table are favorable, you could still expect to be handed a bill of around $10,000. There is no question that replacing a septic system is a considerable investment.
You do not replace a septic system because you feel like it. If your system fails, it is a fact of life that it must be replaced.
In Massachusetts, you can not sell a home without passing Title V!
The problem is that a buyer could care less if you have a new system in the ground. All a buyer will care about is whether the toilet flushes and works.
Do not expect a buyer to pay for your septic problem! You will be lucky if you get the buyer to pay 10% to 20% for installing a new system.
For a homeowner, correctly maintaining your system by regularly pumping is crucial.
A New Roof
Replacing a Roof Doesn’t Have a Great ROI When Selling a Massachusetts House.
There is no question that one of the major components a buyer cares about when purchasing a home is the roof and basement. Of course, this stems from buyers never wanting to think about having a water issue.
Surprisingly, home buyers do not care if you have a beautiful new architectural shingle adorning your rooftop. It is one of the items you shouldn’t fix when selling. Instead, it is better to negotiate a lower seller’s concession.
Let’s take two identical homes in the same neighborhood: one with a twenty-year-old roof approaching the end of its useful life and another with a new roof.
Let’s also assume the new roof would cost the seller $15,000 to replace. Don’t expect the buyer to pay an additional $12,000 for the home. Buyers rarely ever pay for the mundane. Buyers are far more willing to pay extra for things they can enjoy daily. A new roof is not one of them. A gorgeous new bath….different story!
There is no question that a swimming pool, septic system, and roof are three of the worst home improvements for return on investment in a home.
Losing a Bedroom to Gain Space Elsewhere
One significant mistake I have seen several times is homeowners getting rid of a bedroom. Turning your home into a three-bedroom from a four-bedroom is not a winner.
You will lose money on just about anything you do with this space. I have seen people turn it into an oversized walk-in closet even though they already have one. You know your hobby of shopping for new clothes every week isn’t a good habit.
Ask any professional appraiser, and they will tell you that this renovation project will likely bring a negative ROI.
Other Agents Share Similar Experiences
Alex Capozzolo of SD House Guys, a house flipping and real estate investing company, explained, “Unknowingly converting a bedroom into a regular room is a costly mistake for property owners. It’s shocking how easily this happens without people realizing it.
Removing a bedroom’s existing entrance or exit will no longer make it a bedroom. This can happen if you block out an existing window with drywall. Some homeowners hate sunlight so severely that they remove the window and replace it with more wall space.
In expensive real estate markets, this could negatively affect a home’s value by $15,000 – $20,000. It’s not a cheap mistake! Review regulations surrounding bedroom requirements before drastically changing its features.”
Turning a Garage Into a Family Room
In some areas of the country, like Florida, where the weather is always warm, this may not be a significant issue. Doing this in Massachusetts will remove something of high importance to home buyers.
Buyers here covet a garage. It is always on a buyer’s wish list when they can afford it. Taking one away will make the house less saleable. There will also be a lower sales price by making this renovation blunder.
Overspending on Landscaping
Adding unique or extravagant features to your house that you find attractive is not guaranteed to impress buyers. For example, spending tons of money on a gazebo or trellis may not translate into cash in your pocket when selling.
Simplicity usually wins. Focusing on curb appeal is essential. First impressions matter. The beauty of this is that you can do it on a budget and improve your property dramatically.
For example, mowing the lawn, trimming the hedges, and weeding the beds can all significantly impact the landscape. Power washing the siding, cleaning the gutters, sealing the driveway, and fixing any cracks in the walkway can also translate into an excellent return on investment.
Considerations for Maximizing ROI With Improvements
When planning home renovations in Massachusetts, it’s crucial to weigh the cost against the potential increase in your property’s value.
According to the Family Handyman, not all upgrades are equal. For instance, while adding a luxurious master suite might seem like a surefire way to enhance your home’s appeal, such a project typically recovers only a fraction of its cost.
Instead, focusing on improvements that boost curb appeal and make your home move-in ready can be more beneficial. I have witnessed this over and over again as a Massachusetts Realtor.
Simple updates like a fresh coat of paint, fixing any blemishes on the walls, or even replacing an outdated front door can significantly impact potential buyers’ first impressions.
Opting for energy-efficient upgrades, such as Energy Star appliances or attic insulation, can appeal to buyers’ growing interest in sustainability and long-term savings on utility bills.
Whether it’s a fix-and-flip project or a ground-up construction, understanding which renovations to prioritize can make all the difference in achieving a favorable ROI.
Conclusion
Consulting a top local real estate agent is wise when considering home improvements. Realtors are in an excellent position to advise on what works well and what doesn’t.
Hi Bill!
Sometimes you just have to make repairs to your home whether or not they return your investment. However, if you’re a homeowner planning to do some updating, you should definitely talk to a real estate agent about what updates are good for your neighborhood to add value. Agents will usually jump at the opportunity to help people with their home updates and it will give the homeowner some direction. Great article!
Lisa – Many mistakes could be avoided in the home improvement arena if seller’s did get advice from those that have a handle on this kind of thing. There are times where home owners make improvements to things with the intention of putting their home on the market only to find out later that the money spent did not do much for their return on investment.
Great article! The whole value-of-a-pool question is one I get a lot as a real estate agent. It really depends on where you live, and if a pool is expected as part of a typical home, or regarded as a good thing, or just something else that someone else has to clean and maintain. I do get a LOT of clients that are looking for homes with pools, but I think part of that is that if the home already HAS a pool, they get to enjoy it without paying the whole freight – it might add $10k to $15k to the price vs. $35k to $50k to put one in.
Alison you are correct about where you are located when it comes to a pool. I am sure they offer far more value to someone in Arizona than they do in Massachusetts for example.
Hi Bill – Great list. We often see the best return on improvements, but not the least return. I totally agree with a swimming pool–I think it’s always easier to sell a house without one. And no one wants to spend money on the septic system, but they must replace or repair it if they want to sell the house.
We also need to add market conditions as a Buyer’s Market will value these amentities differently than a Seller’s Market. In the Phoenix area with our 45+% REO market pools are getting maybe $10,000 for something that cost $30,000 (basic pool) to install. In a normal market we would value it more in the $15K to $20K range.
Another area that will bite sellers is “green homes” with solar panels, extra insulation, etc. I just don’t see buyers willing to pay more for those items at this time. It’s strictly price focused in most cases.
Peggy – I am sure in some areas there is a better return of a pool but here in Massachusetts the season is so short for getting the usage.
Eric – I agree with you about the type of market having an effect of the ROI. One of the things that I have noticed her in my market is that homes that are in less than desirable condition really take a beating when it comes time to sell.
Great article. I visited Open Houses this week and in one of them the owner had commissioned 3 giant murals for the children’s’ rooms. While I am sure the children love them, the potential buyers will not. This is an example of something that cost thousands and most likely will not bring a monetary return. If anything the murals will have a negative impact on the saleability of the property.
Claudia I am sure you are right on the money! There are times when sellers make changes to their homes that they think may be appealing but they end up being a detriment to selling.
Hi Bill,
Just came across this article a year later after doing some research.
@Alison – the last two years we have been going out on a lot of pool inspections for new home buyers. We get both breeds, those who are excited about a house with a pool and those who are scared of it. I think if agents team up with a local pool company and can talk to their clients about what can be done to make the pool ownership experience easier and more enjoyable some of those scared of buying a house with a pool might feel more comfortable.
That is what we try to do on pool inspections, educate the buyer on the pros and cons and let them know they have a company they can rely on to teach them about the pool.
When it comes to investing in an inground pool in Massachusetts, you can’t think of just the pool but about designing an entire outdoor living space, that is where you get your value. Bring together the patio, hardscapes, landscapes, and the pool as a center piece, thats when it can add value to a home, or at least make it sell easier.
-Jay Broyer
Precision Pool Construction
Amesbury, MA