Five home improvement projects that could pay off. And a few that won't.
Find out which home improvement projects help you get the best bang for your buck.
Find out which home improvement projects help you get the best bang for your buck.
For many homeowners, their home is their largest investment. A home improvement project is an effective way to increase its value over time, but not all projects offer the same return on investment. Here’s a list of reliable upgrades to consider, along with a few you might want to skip.
Kitchen renovation: The kitchen is often the heart of home, where people congregate and spend time. If you can handle some temporary disruption, updating elements like cabinets, countertops, the sink, appliances, and lighting could significantly enhance your home’s value. According to a 2022 Remodeling Magazine report, minor kitchen remodels have one of the highest returns on investment of the 22 remodeling projects they studied. An average kitchen remodel cost of $28,279 increased a home’s value by $20,125, an ROI of over 71%. Here are some helpful tips from Better Homes & Gardens.
Bathroom renovation: Your bathroom, or even powder room, is sure to catch attention during an open house. Replacing the sink, bathtub, and shower, and adding a tile floor, is a smart move. Upgrading the lighting will also improve the space’s overall appeal. Consider these recommendations from Forbes Home.
Flooring: Replacing outdated flooring with new hardwood or tile is a reliable way to enhance your home’s appeal. New carpeting may be an attractive option due to its lower cost compared to other flooring types, but it will likely have a shorter lifespan. Get started with this overview from HomeLight.
Energy-efficient upgrades: Installing energy-efficient windows, insulation, and a state-of-the-art HVAC system will make your home more comfortable in summer and winter, and could save you money on your monthly energy bill. Plus, these are the kinds of improvements that make your home more valuable to every buyer.
Additionally, in regions prone to high winds or hurricanes, installing impact-resistant windows and doors can be a smart investment. Not only do they protect your home, but they also offer a strong return on investment—one study shows homeowners can recoup up to 85% of the cost of windows upon resale—while potentially lowering insurance premiums due to the added protection.
Outdoor enhancements: Enhancing your outdoor living space with a deck or patio, complete with an outdoor kitchen or fire pit, can expand the livable area of your home. For a detailed cost breakdown, check out this guide from Angi. Replacing your front door, exterior siding, and garage door could also be a good investment.
If you live in a southern U.S. region, adding a swimming pool can also increase your home's value. Inground pools could boost home value by roughly 5-8% on average and are financeable.
Swimming pool: Most homeowners think a pool or hot tub will increase the value of a home, but it’s often not the case—especially in regions with cooler climates or shorter swimming seasons. Not only are they a significant expense to install, but future potential buyers may have safety concerns, especially those with young children. What’s more, the cost of maintenance and heating a pool for years can be a turnoff for some home buyers.
Home theater: A home theater often doesn’t provide a strong return on investment because it appeals to a niche market, limiting its appeal to potential buyers. The high cost of installation may not translate into a significant increase in home value, as many buyers may prefer versatile spaces over specialized entertainment rooms.
Luxury updates: Luxury updates like in-floor heating, freestanding soaker tubs, and high-end fixtures are not likely to pay off in the long run because they cater to personal tastes rather than universal appeal, which can limit their attractiveness to a broader market. Spending on high-end finishes can overshadow more practical upgrades to tubs, showers, and sinks that offer better value and functionality to a wider range of potential home buyers.
Luxury primary suite addition: Upscale primary suite additions deliver some of the worst ROI on the long list of home improvement options. The added space dedicated to a luxury suite could be more valuable if used for features with wider appeal, such as extra bedrooms or versatile living areas.
Carefully considering the return on investment from a home improvement project is a good idea. Wise choices will pay off when it’s time to sell.
Think through where you are in life and make your choices accordingly. Are you planning to move in a few years, or are you settled in your forever home? If you’re likely to move soon, prioritize improvements with the best return on investment. If you plan to stay in your home long-term, focus on upgrades that enhance your personal enjoyment with less focus on home value.
