BOSTON (TheStreet) -- Beauty is in the eye of the beholder.
That old adage should be a warning for homeowners. What you do to a home -- in terms of renovations, furnishings and additions -- is all well and good while you sleep under its roof. But if you plan to sell, your efforts could diminish rather than boost its selling price.
A miniature backyard skate park, indoor basketball court or basement lounge complete with a stripper pole and smoke machine are the sorts of extravagances that may not directly push down your home value, but could nevertheless drive away prospective buyers or provide room for them to haggle down the price. A bright pink paint job and lawn cluttered with gnomes and flamingos is going to offer little in the way of curb appeal. That koi pond you love so much may be just a headache for a new owner.
"Swimming pools and landscaping can both backfire," says Brendon DeSimone, a Realtor in California and New York and blog contributor for online real estate database Zillow (Stock Quote: Z) who has been featured on the HGTV television shows Curb Appeal, Bang for Your Buck and My House is Worth What?
"They are nice to have because they show really well and will lure buyers in," he explains. "But when buyers are assessing pros and cons of the home or comparing it to other homes, the upkeep -- or safety, in the case of the pool -- will factor in. Some people just may not want to sign up for having to do landscaping or pay the landscaper. So while a swimming pool or beautiful manicured lawn might reel in potential buyers, eventually those things could turn them off. Gardening and over-the-top landscaping is for a very specific buyer."
There are always exceptions to be had if the right buyer comes along. A pool in warm-weather Arizona or Southern California is certainly more attractive than one at a home in Maine where it gets only a fraction of the annual use.
Jacuzzis and whirlpools are other luxuries that can be a hit or a miss for sellers. A young couple may love the additions; a family with small children may see them as a waste of space and potential hazard.
Renovating your basement, attic or garage into an additional room? That man cave or spare bedroom may fit your lifestyle, but buyers may lament the lack of storage space and place to park their car. A basement or dormer apartment may run contrary to local zoning and be a red flag during a home inspection. Converting a bedroom into an office may appeal to a work-at-home buyer, but eliminating that bedroom in the eyes of local assessors will decrease your home's value.
External additions can be problematic if your bigger and better house is out of character with the surrounding neighborhood in size and style. It can be even worse if your do-it-yourself project lacks professional polish. Even more modest improvements -- such as doors, windows or awnings -- can hurt if they don't match your home's architectural style.
Overall, the 2011-12 report estimates that homeowners would recoup an average of 57.7% of their investment in 35 different improvement projects, down from an average of 60% last year.
According to the report, seven of the top 10 most cost-effective projects -- nationally, in terms of value recouped -- are exterior replacement projects. It deemed fiber-cement siding replacement as the project expected to return the most value, with an estimated 78% of costs recouped upon resale. Vinyl siding projects were expected to return more than 69% of costs.