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  • Writer's pictureGeorge Heredia


As an appraiser I see a lot of homes and talk to a lot of homeowners, brokers, agents, and lenders. There are some home updates or remodels that simply will not have a return on investment (ROI), or very little. First, let’s see what the difference is between an update and a remodel as defined by Fannie Mae and as used by lenders and appraisers.

An update is an area of the home that has been modified to meet current market expectations. These can mean modern appliances, such as a over the range microwave unit, or replacing other appliances. Basically, anything that is considered refurbishing components that meet the market’s expectations.

On the other hand, a remodel is more extensive, and may include replacement of major components (replacing kitchen cabinets, new bathroom tile flooring, or a new bath tub). Remodels would also include any relocation of plumbing/gas fixtures, structural changes (relocating walls), or room additions.

Updates and remodels should always be considered within your neighborhood or market’s expectations. For example, if most homes have granite counter tops, you may want to consider the ROI on changing your tile counters to granite. Again, this is market specific, and price specific. Consult with a Broker or an Appraiser if you need to gauge your ROI.

So now that we know what major items constitute an update or remodel, here’s my top 5 updates on a home that will NOT bring you additional value (or likely very little ROI):

  • Changing faucets or interior door knobs, or adding knobs/pulls hardware to kitchen and bath cabinets. There is little or no ROI, though arguably they might add some appeal.

  • Painting old cabinets instead of replacing them. Certainly, a less expensive home décor boost, and there has been a trend towards this in the past few years. If cabinets are damaged, particularly floor cabinets or sink cabinets, be sure that these are repaired. In addition to painting the cabinets, consider adding whole new cabinet doors from your big box home improvement store. There are many cabinet door styles including glass, and could add value. That said, if a home is 35+ years old, simply painting cabinets with lower quality paint or inferior workmanship will not give you a good ROI.

  • Sprinklers. Depending on what part of the country you live in sprinklers may be necessary, but likely not have a huge ROI in terms of home value. If you live in a market area that freezes in the winter, sprinklers lines can break and cause more damage due to water leaks. So, check with a good local landscaper and be sure that the sprinklers you get are of good quality.

  • Laminate Wood Floors. There are a number of brand names for these, but let’s use the generic “laminate wood” floor. These are synthetic or vinyl type floors with a very thin top coat of coloration to mimic wood floor grains. They often feel spongy when walking on them, and can easily scratch or scuff up. Unlike real wood flooring that can be sanded or refinished, there’s no good way to repair a laminate wood floor that’s been damaged. These have a low or no ROI. Consider alternate tile floors that look like wood, or real wood flooring, especially in higher priced markets.

  • Remove a bedroom closet. Sometimes we see a bedroom that needed to be larger and the closet space was removed. This effectively negates the functional utility and value of a bedroom. You are left with a den. In market value terms, you may lose value removing bedroom closets. And armoires don’t count, because they are considered personal property and not part of the real estate.

So, there you have my top 5 things you should never do to your home as part of an update or remodel – or at least consider the ROI effects.

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