Welcome to Return on Design, the podcast where beauty meets strategy and interiors become assets that perform. I’m your host, Rachel Niederhofer, designer, investor and builder of high impact spaces that deliver real results. Alongside my husband, I run both a design firm and a real estate investment company, where I live at the intersection of creativity and ROI every day. Each week, I’ll be unpacking what most people overlook: how strategic design decisions can grow your investment, elevate your lifestyle and unlock the full potential of your property.
Most people believe that making a property nicer automatically adds value. It doesn’t. Over design, or over-improving your home, is one of the easiest ways to blow a renovation budget and quietly erase the return a project could have made.
It means spending on upgrades the market won’t pay you back for. Here’s what it looks like, why it happens, and how we decide when enough is enough.
Most over design starts with an emotional upgrade instead of a strategic one. Homeowners and investors come at a renovation with completely different mindsets, and the trap is making decisions based on what you like instead of what the market for that property wants.
When you’re designing for an investment property or a flip, it’s what is my buyer going to want?
Return on Design, Episode 04
That doesn’t mean you can’t make your own home exactly what you want. You can. You just have to accept the risk that you may never get that money back. The same emotion shows up when sellers, often in estate sales, value a house for what it means to them rather than what the market says, and when investors overpay because they love a location. If you pay more than something is worth, you’ve put the return at risk before any work starts.
One lake house we looked at had an infinity pool overlooking the water. To create the infinity edge, a significant wall had been built up facing the lake, and the owners covered it in a one-by-one blue mosaic tile.
It looked kind of neat. It was also very expensive, and it’s a textbook case of over design. Breaking even on a feature like that would be doing well. For a lot of buyers it’s a deterrent: the wall they’d see every time they docked the boat, and something they’d budget to redo. A tile that tied into the home’s exterior and the organic feel of a waterfront landscape would have cost less and appealed to far more buyers.
Homeowners fall into the same thing with bathrooms. A remodel built around one personal choice, a clawfoot tub, say, or a layout that’s too custom, can’t be assumed to return the money, time and energy that went into it. Sometimes it will. Sometimes it won’t. It depends on the market, the demographics around the property, and who the next owner is.
In luxury residential design, the cost people forget is labor. A marble mosaic tile might fit the materials budget, but the time it takes to lay something that ornate, and the skilled installer it requires, can cost far more than the tile. We’ve seen detailed tile work done wrong, ripped out and redone, paying for material and labor twice.
In many markets right now, labor runs as much as the material or more. A safe rule of thumb is to double the material cost to estimate what it will cost installed.
The material can hold its value. A marble countertop will be worth more than a lesser surface. But no buyer pays a premium for the hours someone spent laying an intricate pattern. Some smarter ways to get the look:
Cabinet hardware has a huge price range. Too cheap feels hollow and doesn’t pay off, but ornate solid brass is rarely noticed by buyers. A solid, smooth, good-quality mid-range pull finishes the look, lasts, and returns. Don’t forget installation: on a kitchen with a lot of cabinetry, a carpenter’s time to install pulls can add thousands of dollars.
Plumbing fixtures work the same way. Don’t go so cheap you’re wasting money, but you rarely need extreme luxury when there are plenty of high-quality options in between.
Appliances show the range most clearly. A basic stove can cost around $150, while high-end range and oven sets reach $30,000 to $40,000. A good mid-range gas range with a generous oven often completes the kitchen. If the market supports luxury, you’ll get your money back on luxury appliances. If it doesn’t, that’s money you won’t see again.
On one of our flips, a four-bedroom, three-and-a-half-bath house, the market was going to top out around $500,000. Two bathrooms had been remodeled a few years earlier, one bathroom and the kitchen were original to the 1960s, and the powder room had been partly updated.
The budget, based on that valuation, couldn’t cover making every bathroom amazing and redoing the kitchen. So we didn’t fully redo the previously remodeled bathroom. We swapped out the vanity and made a few other upgrades so it blended with the rest of the house. That freed money for the kitchen, the original bathroom, and the flooring, where the original hardwood was too damaged in spots to repair.
A full bathroom remodel might have supported a higher list price, but it also meant carrying more risk in a market where we had to weigh how long it would take to sell. Putting the money into the kitchen and floors got the valuation, and the project returned roughly 30 to 35% in under six months.
Over designing can actually eat into your return or your ability to profit off of the decisions that you made.
Return on Design, Episode 04
You don’t have to tear everything out or spend endlessly to make a property perform. That’s the whole idea behind Return on Design. Before you upgrade, ask:
There will be times you need to pivot. But a clear plan, a set budget and a fixed goal keep you from over-improving your home and produce a beautiful, market-ready space that performs emotionally for the people who live there and financially for you.
So, classic emotional trap that we see over and over again with investors and homeowners. You just don’t want to make emotional decisions apart from strategy.
When you’re designing in your home, you’re thinking, what do I want? When you’re designing for an investment property or a flip, it’s, what is my buyer going to want? So, it’s not necessarily me, but what do they want? I’m thinking ahead towards them and what their needs are in that space so that we apply the correct designs or even layouts of a space.
Welcome to Return on Design, the podcast where beauty meets strategy and interiors become assets that perform. I’m your host, Rachel Niederhofer, designer, investor and builder of high-impact spaces that deliver real results. Alongside my husband, I run both a design firm and a real estate investment company where I live at the intersection of creativity and ROI every day. Each week, I’ll be unpacking what most people overlook, how strategic design decisions can grow your investment, elevate your lifestyle and unlock the full potential of your property. You’ll get real tools, proven strategies and unfiltered conversations with industry experts who are doing it right. So, if you’re ready to invest with purpose and leverage design as a powerful tool, this podcast is for you.
Most people believe that if you make your property nicer, you’re automatically adding value. But over design is one of the easiest ways to actually blow your budget and actually ruin a lot of the return that you could actually get out of the project.
I’m Rachel Niederhofer.
And I’m Justin Niederhofer.
And this is Return on Design, where beauty meets strategy and properties become assets that perform. Today, we’re going to talk to you about over design, what it looks like, why it happens and how to avoid it. Let’s talk about emotional upgrades versus strategic upgrades. We see it all the time where people are making decisions for emotionally fueled decisions versus like strategic decisions when it comes to design. Like an example is, so investors and homeowners have completely different mindsets when it comes to renovating or upgrading a property. And it’s so important that investors understand who their audience is and that they don’t get sucked into the emotional trap of, well, this is what I like. But back to that whole market demographic of what does the market say and what is the goal, what’s the position that we’re taking on this specific flip. And that’s how we begin to make strategic decisions versus the emotional decisions that you can often fall into.
And we’ve seen so many. We’ve seen it time and time again. Yeah. Yeah. If we’re looking at just upgrades, doing a massive accent tile wall may be nice and may fit the flow of your personal home. But if it’s when you’re trying to get ready to sell, it may not be necessarily what you’re in buyers looking for. And maybe you need to be a little bit more neutral in some of the design so that you open the potential up to more buyers.
Now I know exactly which house you’re talking about.
In case you point the lake house that we looked at, they had this massive, massive blue tile wall off the back of the pool. While it looked kind of neat, it was also a turnoff in a lot of ways in that it was not my style at all. If it was me buying that house, I’d want to rip it down.
So just to set the stage, it was an infinity pool that overlooked the water right off a lake. And the wall, in order to get the infinity, they had a pretty significant wall built up from the lake view. And they chose to do like a one by one mosaic tile on the wall. So knowing what we know, that’s very expensive. And it’s really an over design aspect because you’re not really going to get the full value return on that. You could have looked at a variety of other applications that would have not cost as much. They would be a little more to your point neutral in terms of like aesthetic preference from a resell standpoint. And you know, I mean, you’re just not going to get your money back. I mean, if you broke even in this scenario like that, you’d be doing a good job. That will not be a selling point. And often it can be like a deterrent. Because someone’s like, oh, I hate that wall. The view I see every time I go dock the boat, and it’s going to cost me $30,000 to redo it. Yeah.
Whereas you could have chosen a slightly different tile that would have tied in more with the whole exterior of the home and not just that whole waterfall look.
Yeah. Or even the terrain of the landscape being on the water and more of an organic appeal, definite over design. And as a homeowner, we’ve seen so many DIY projects where people assume, oh, I’m going to redo this whole bathroom and get my money back at least, if not more. And sometimes they’ve over designed it. It’s too custom to personal preference or not on design style and you know, the layout’s wrong, whatever the scenario is. And it’s like you’re not, you can’t assume that that emotional decision, because you wanted this claw foot tub, let’s say, is automatically going to return on your dollar spend or your time and energy. It’s just…
Sometimes it will, sometimes it won’t. It all depends on the overall application and use in the space and what, again, to your point earlier, of just the market, the demographics around it and who your end consumer is.
So classic emotional trap that we see over and over again with investors and homeowners, you just don’t want to make emotional decisions apart from strategy.
When you’re designing in your home, you’re thinking, what do I want? When you’re designing for an investment property or a flip, it’s what is my buyer going to want? So it’s not necessarily me, but what do they want? I’m thinking ahead towards them and what their needs are in that space so that we apply the correct designs or even layouts of a space.
And as a homeowner, if you do decide to, well, I want my house to be what I want, that’s great, but you have to also assume the risk of, I may not ever get my money back, because when we come in and we look at properties, we see this a lot, and specifically in estates, where sometimes the home might have this emotional connection to whoever’s inherited it or lived in it for some time, and that is fueling their decisions on what they think it’s worth, how they want to approach the whole transaction of selling it, versus we come in and we’re like, it’s a numbers game, like what does the market say, what is the house valued at today versus what it could be? And you have to really remove that emotion. Even as an investor, this is how investors fall into that emotional trap of overpaying. Well, I love the location or whatever, fill in the blank. Yeah, but if you overpay because you love something more than it’s actually worth, I mean, you’re automatically going to jeopardize any return.
And you got to be strategic in how you invest.
So let’s talk about the nice but not necessary trap that people also fall into, and we see this a lot in the luxury space. One of the biggest money spenders is labor that people don’t account for. So let’s say you’re doing a bathroom as an example, and you want like a luxurious marble mosaic tile, it’s beautiful, it’s stunning, and maybe the cost of material is doable within your scope of work or your budget, but you’re not always accounting for labor. I mean, the amount of time it can take to apply something so ornate and strategic like a mosaic tile, you’re going to pay a significantly higher price in the labor cost versus the material that maybe is not as ornate or detailed.
Yeah, you’ve got to remember that intricate details, fine details, take more time, and the more time adds more cost.
And you often need a much more skilled laborer.
That can do the job and do it properly, because it is easy to mess up, and we have seen it messed up and had seen it have to be ripped out and redone, costing more time, more money, and both now in material and labor.
Yeah, so a good alternative for something like that, where you want that nice, but you’re trying to think of the necessary would be more of an accent, you know, ways you can do an accent marble mosaic within maybe a porcelain or ceramic dominating tile on that space. That’s one example, or yeah, just being creative on how you apply things and making sure you’re accounting for labor.
Yeah, the cost of labor, especially like right now in a lot of today’s markets, your labor is as much, if not sometimes even more, than the cost of your material. Yeah. So, if you’re looking at cost of material, a safe bet at the moment is to double that cost, and that’s what is going to cost you to have it now installed too.
Yeah, and in terms of getting your return, you know, making sure that investment is going to add value and return, the material is going to hold up, the labor is going to get swallowed up in that number. So, if you have a marble countertop, you know, that’s going to be of greater value than…
Than a marble floor and…
Or I was going to say a granite or like a different material. Yeah. You know, there is a valuation that will hold up, but labor is not necessarily, someone’s not going to come in and say, oh my gosh, I appreciate the ornate detail of how much time it took someone to lay this mosaic tile feature. And so I’m going to pay a premium because I know…
Or even sometimes your millwork trims. You know, you can get extremely detailed and ornate, and yes, they look… They can look extremely gorgeous, but it’s not always necessary, and the financial impact to it may just eat into some of your design or your actual return on your design in the end.
You know, another hot design trend right now is like high gloss rooms. So they’ll come in and paint the entire room in a high gloss finish. It’s like very much on the luxury end of a paint application. It’s very expensive because it’s very labor intensive. You have to do all sorts of… A variety of different paint applications throughout. It takes a lot of prep work, a lot of sanding, and it makes an incredibly stunning finish if that’s your aesthetic style, very high reflective, and it can make a small space feel really big and sort of this dramatic design feature. But it’s going to be really nice. Is it going to be necessary? You’re going to have to have a specific buyer really appreciate value and understand that level of design for you to really get a return. I mean, maybe get your money back.
Taking into account the cost of material and labor and is that going to translate into what a buyer or potential buyer is willing to pay for it?
Yeah. And is it going to be in style?
And are you limiting some of your buyers to doing that application?
Yeah, because then also let’s say you don’t like it. That isn’t your style. You’re going to come in and it’s going to cost quite a bit to undo that level of paint application because it’s almost like a thick lacquer application. It’s not just a, oh, I’m going to paint over this. So just definitely a trap people could fall into where it’s nice but not necessary to get that return. I would say easy trap that I see people fall into in kitchens is like luxury hardware. I mean, you can get, there’s a pretty significant range on hardware. It can elevate a kitchen pretty dramatically and you can go really cheap and not get that return on what you’re spending because it maybe is too cheap. And you can also go really high and solid brass.
Again, very ornate pieces in a lot of areas people, they’re not going to pay as much attention to it that you can find a nice solid, smooth finish, high, good quality, meaty handle or door pull. It doesn’t feel hollow and cheap. Like I’m going to break it every time I try to open this door, but a good mid range that is going to finish the aesthetic look. It’s going to hold up and last, but you’re going to get your return instead of trying to go really, really high end.
And that’s also a very overlooked labor cost of applying those. I mean, when you have a lot of cabinetry, door pulls, there’s a labor required for a good carpenter to come in and apply that depending on how many it can get very, very expensive, like thousands of dollars added to your spend.
And that’s really because of it’s a time deal. I mean, the application is not the hardest, but you’ve got to do it right. And it just, it takes time to actually go through all the processes.
Another trap can be plumbing fixtures where, you know, again, you’re going to get a pretty wide range in quality and in price. You don’t want to go so cheap that you’re wasting money, but you don’t always need to go extreme luxury. There’s a lot of really good high quality in between options.
Yeah. I would add on to that with even like kitchen appliances. You can buy a, for example, a stove. You can buy a cheap stove at Lowe’s or Home Depot for 150 bucks, but you’ve also got stoves and oven sets that get up into the $30,000, $40,000. And it’s, what is your market there? And, you know, sometimes that nice mid range of good gas with the nice big oven is more than enough. And it sets and just completes it with a very nice look that I don’t need that $20,000 stove, which could be really nice and fun to have, but I mean.
If the market permits that luxury space, you will get your money back on your appliances.
You have to know the market and where you’re at.
Exactly. Yeah. Like an investor can easily overspend on an appliance that isn’t necessary. People can also upgrade appliances if they have the framework and foundation.
And it comes back into that, like we were talking about, nice, but not always necessary, you know? Exactly. One of the things that we see when we’re looking at homes and we’re looking and we’re working through these projects and things we’ve talked about with others is, when is enough enough? And how do you know when to stop and not go too far so that I don’t overspend and I don’t just continually add on and start to ruin any chances of return on this design?
Yeah, or blow your budget.
Blow your budget, too.
Buyer’s remorse. I mean, as an investor, I think it’s really knowing the market and knowing what is necessary. Like, you know, the Maxwell house, we were very strategic about what we upgraded and why and what was good enough for that market to permit. So the Maxwell property, you know, market was pretty much going to top out at the 500,000 and the bathroom had already been remodeled a few years ago by somebody else that owned the property. It wasn’t the most luxurious design or the most on-trend design, but we knew like this is not the best allocation of the resources that we’ve set aside to upgrade this house because somebody will still love it. It’s still going to be pretty new for a lot of people. And so we, you know, just took out the vanity and made some other upgrades that had been overlooked or done that could be done a little bit better to help elevate it and make it blend with the other upgrades throughout the house without pouring money in here that, you know, we may not get that full return. Well, it was three, or it is a three-bedroom, or I’m sorry, four bedroom, three and a half baths. So two baths had already been updated previously a couple years ago. One bath was original to the 60s had never been touched. So we knew we had to do some work on that. We had to strategically address this one and then the little powder bath had also been, I guess, semi-updated, but that was minimal, just a powder room. So we didn’t have the, it wasn’t in the budget based off of the valuation to be able to do all the bathrooms and make them all amazing and upgrade the kitchen that was also original to the 60s. And we really needed to elevate that. And so that was this strategic approach of like, in terms of, you know, yes, it’s not going to be the most upgraded for 2025, but it’s still very upgraded for most buyers in this market.
But I also think that part of that in knowing like, we’re not going to go fully into that bathroom and redo all of it was also looking at some of the other needs that the house wanted. Yes, we knew we needed to do the kitchen. We needed to do that third bath. But as we also got into it as like, well, the floors. So what was going to be the better spend, spend a little bit in the bathroom to upgrade a few pieces to elevate that space and make it a whole lot more current and nicer and more desirable and be more cohesive to the rest of the house. The new upgrades. Exactly. Yeah. Or spend that budget to do floor or, you know, like we could have redone the entire bathroom or we could do what was necessary in this bathroom and allocate the rest of the funds to go fix what we found out the floor. The original hardwood floor was pretty bad in some spots and we weren’t going to be able to repair that. Right. So we could tear that floor out and elevate more of the home with that budget, making it a whole lot more current.
So the strategic decision we made to do the floors over a full reno of the bathroom was exactly the execution of not making that emotional decision of wanting the most beautiful bathroom, but making the strategic of what needed to be taken care of the sections of the floors that were needing to be repaired and getting that full.
Know when to call a stop point on the upgrade. Because if we continue to go, then we’re going to have to start pulling out of other budgets. Or we’re going to overspend our own budget.
Or we’re going to assume too much risk. Because we probably could have been like, you know, we could upgrade this bathroom and get a higher list price, but we’re also hedging the market right now. And what is the market saying? Is it a buyer’s market or a seller’s market? How much longer is it going to take to get that price point? And that risk wasn’t going to reach, you know, it was too much to hedge for that level of return. Exactly. And spending the money on the floors and spending the money in the kitchen and taking care of those necessities of really elevating to get that valuation, you know, we easily have like a 30 to 35% return on investment in less than six months. Yeah. So over designing is not simply just overspending. I mean, over designing can actually eat into your return or your ability to profit off of the decisions that you made.
You know, you don’t have to tear everything down and spend endlessly to fix a property. If you have a good clear plan and a strategy behind it and you stick to your points, yes, there are going to be times you have to pivot a little bit. But if you stick to your plan and you stick to your budget and you stick to the goal, you can still create a beautiful market ready place space that’s ready to perform both emotionally for somebody, financially for you, and get you that full return of all aspects of your Return on Design.
Yeah. Don’t fall into the traps. So if this information is helpful to you and you like what you hear, I mean, this is exactly the content we’re going to be bringing you every week, helping you to position yourself in the market, get the full return on your design.
So hit the like button, subscribe, follow us on social media, Instagram, Facebook, visit our websites, and we look forward to seeing you guys next time.
Find out which upgrades your market will actually pay for before you spend, for a primary residence or an investment property.