When John and Melissa bought their suburban home in 2016, they knew it needed work. The kitchen was outdated, the bathrooms were cramped, and the backyard was just a patch of grass. But they saw potential. Over the next few years, they tackled home improvements that add value projects individually. They remodeled the kitchen, added a deck, and updated the bathrooms. By the time 2021 rolled around, not only had they turned their house into their dream home, but when it came time to sell, they received multiple offers well above the asking price. John and Melissa made a substantial profit thanks to their strategic home improvements, nearly doubling their investment.
Like John and Melissa, many homeowners wonder which home improvements that add value will add the most value when it comes time to sell. Some upgrades may seem attractive but need to provide a strong return on investment (ROI), while others can significantly boost the resale value of a property. Understanding which renovations are worth the time and money is essential for homeowners looking to maximize their home’s value. This article will explore some of the best home improvements that can add value, backed by data and expert insights.
The Importance of Value-Boosting Home Improvements
Home improvements can serve many purposes—enhancing your living experience, addressing necessary repairs, or improving energy efficiency—but one of the most important reasons homeowners invest in renovations is to increase the property’s value. Whether you’re preparing to sell or want to build equity over time, making the right upgrades can provide significant financial benefits.
According to Remodeling Magazine’s 2023 Cost vs. Value Report, homeowners can expect an average return of about 60-70% on midrange home improvement projects. However, the ROI varies by the type of project and the region. The key is prioritizing renovations that make your home more appealing to potential buyers and deliver a strong return on investment.
- Kitchen Remodeling: The Heart of the Home
When adding value, the kitchen is often the first place homeowners should focus on. Surprisingly, a kitchen remodel consistently ranks as one of the top home improvements in ROI. According to the National Association of Realtors (NAR) 2022 Remodeling Impact Report, a kitchen renovation provides an average 81% return on investment. A modern, functional kitchen is a major selling point for buyers and can be the difference between a quick sale and a home sitting on the market for months.
There are two types of kitchen remodels: minor and major. A minor kitchen remodel, which includes replacing cabinet fronts, updating countertops, and installing new appliances, can yield a higher return than a major renovation. Zillow reports that a minor kitchen remodel typically has an ROI of about 80.5%, making it a cost-effective option that provides excellent value. Major remodels, which involve gutting the entire kitchen and starting from scratch, can be more expensive but still deliver an ROI of around 65%.
When considering a kitchen renovation, focus on modernizing the space while keeping the design neutral to appeal to the widest range of buyers. Investing in energy-efficient appliances, durable countertops like quartz, and a functional layout will increase the kitchen’s usability and the overall value of your home.
- Bathroom Upgrades: Comfort Meets Luxury
Next to the kitchen, bathrooms are another key area that can significantly impact a home’s value. According to Zillow, adding a bathroom or completing a midrange bathroom remodel can result in a 70% ROI. Upgrading bathrooms to include modern fixtures, energy-efficient water systems, and more space is a highly effective way to boost your home’s value.
A midrange bathroom remodel typically includes:
- Replacing outdated fixtures.
- Adding a new vanity.
- Updating the flooring.
- Installing new tile in the shower.
According to Remodeling Magazine, this remodel has an average cost of around $25,000 and can offer a return of about 64%.
For homeowners with more room in their budget, a high-end bathroom remodel with a luxury shower, soaking tub and heated floors can create a spa-like atmosphere that appeals to potential buyers. However, high-end remodels generally have a lower ROI (around 56%) than midrange upgrades, so balancing luxury with practicality is important.
- Boosting Curb Appeal: The First Impression Matters
Curb appeal is crucial in attracting buyers and boosting your home’s value. After all, the exterior is the first thing potential buyers see. A well-maintained and attractive exterior can increase your home’s perceived value and lead to quicker sales. The National Association of Realtors found that landscaping projects, such as adding a well-designed garden, upgrading pathways, and improving lawn care, can yield an ROI of 100% or more in some cases.
Replacing the front door is one of the most cost-effective ways to improve curb appeal and increase home value. Remodeling Magazine’s 2023 Cost vs. Value Report indicates that a steel entry door replacement has an average ROI of 84.7%. Similarly, upgrading your garage door can have an ROI of 102%, making it one of the highest-return projects you can undertake.
Other exterior improvements, such as painting the house or adding new siding, also provide strong returns. For instance, installing fiber-cement siding has an ROI of about 69%, while a fresh coat of paint can make your home look newer and more inviting without breaking the bank.
- Adding More Usable Space: Expanding Your Home’s Footprint
In many cases, increasing the square footage of a home can significantly boost its value. Adding an extra bedroom, finishing a basement, or converting an attic into a living space are great ways to increase your home’s appeal to potential buyers.
According to HomeAdvisor, finishing a basement can add between $30,000 and $50,000 in value to your home, depending on the size and quality of the renovation. It’s also one of the more flexible renovations, allowing homeowners to create additional living spaces, home offices, or entertainment areas that cater to modern buyers’ preferences. The ROI for a finished basement is approximately 70%.
Similarly, adding a bedroom or bathroom can significantly impact a home’s value. Zillow reports that adding a full bathroom can increase the home’s value by 5.7% on average, while each additional bedroom adds about 15% to the home’s value.
- Energy Efficiency Improvements: The Value of Green Upgrades
Energy-efficient home improvements have become a major selling point as energy costs rise and more people become environmentally conscious. Simple upgrades like installing energy-efficient windows, insulation, and solar panels reduce utility bills and make the home more attractive to buyers.
According to Remodeling Magazine, installing energy-efficient windows can provide an ROI of about 68%. This upgrade can significantly reduce heating and cooling costs, which is an attractive feature for buyers concerned about energy efficiency. Similarly, adding attic insulation has one of the highest ROIs of all home improvements, at approximately 83%.
Solar panels are another energy-efficient upgrade that has grown in popularity. While the initial cost of solar installation can be high, studies by Lawrence Berkeley National Laboratory show that homes with solar panels sell for about 4.1% more than homes without, making it a worthwhile investment for homeowners looking to boost value while reducing their carbon footprint.
- Outdoor Living Spaces: Extending Your Living Area
In recent years, outdoor living spaces have become increasingly popular. Adding a deck, patio, or outdoor kitchen can enhance the appeal of your home, especially in regions where outdoor living is a big part of daily life. According to NAR’s 2022 Remodeling Impact Report, homeowners can recover 65-75% of the cost of adding a new deck when they sell their home.
An outdoor kitchen or fire pit area is another way to enhance your yard and boost home value. These aesthetically pleasing features create functional outdoor spaces that potential buyers will appreciate. With more people spending time at home, outdoor entertaining areas have become a top priority for many buyers.
Conclusion: Making the Right home improvements that add value
When deciding which home improvements to undertake, focusing on projects that offer the highest return on investment while aligning with your budget and lifestyle needs is essential. Whether planning a minor kitchen remodel, upgrading your bathrooms, or enhancing curb appeal, the right renovations can significantly increase your home’s value and help you achieve a higher selling price when the time comes.
John and Melissa’s success story perfectly exemplifies how strategic home improvements can lead to long-term financial gain. By focusing on key areas such as the kitchen, bathrooms, and outdoor spaces, they not only improved their quality of life but also ensured a profitable sale when they decided to move on.
Ultimately, making informed decisions about home improvements—backed by data and expert insights—will help you get the most out of your investment and create a home that’s not only more enjoyable to live in but also more valuable.
