Best Home Improvements to Increase Value

Whether you’re thinking of selling in the next six months or a few years down the road, remodeling with Return on Investment or ROI in mind is a smart move. Your home is a huge financial investment, and any money you put toward it should not only increase your enjoyment of the home now but also add value that you’ll recoup when you sell.

Best ROI home improvements: If you’re contemplating investing in a major remodeling project, the following 10 home improvement projects provide the best return on investment for homes nationwide.

1. Garage door replacement

Cost: $3,907
Resale: $3,663
Recoup: 93.8%

2. Manufactured stone veneer

Cost: $10,386
Resale: $9,571
Recoup: 92.1%

3. Minor kitchen remodel like new appliances, new countertops or new backsplash

Cost: $26,214
Resale: $18,927
Recoup: 72.2%

4. Deck addition (wood) or upgrade to a composite material

Cost: $16,766
Resale: $11,038
Recoup: 65.8%

5. Siding replacement (vinyl)

Cost: $16,576
Resale: $11,315
Recoup: 68.3%

6. Entry door replacement (steel) - light panels added

Cost: $2,082
Resale: $1,353
Recoup: 65.0%

7. Window replacement (vinyl) or replace fogged window panes

Cost: $19,385
Resale: $13,297
Recoup: 68.6%

8. Siding replacement (fiber-cement)

Cost: $19,626
Resale: $13,618
Recoup: 69.4%

9. Window replacement (wood)

Cost: $23,219
Resale: $15,644
Recoup: 67.4%

10. Deck addition (composite)

Cost: $22,426
Resale: $14,169
Recoup: 63.2%

Best low-cost home improvements for resale - You don’t have to spend a lot of money to make your home more appealing to buyers. Consider these lower-cost projects that still offer a lot of bang for your buck.

New Interior Paint - Homes naturally show wear and tear, with dings and nail holes often noticeable in marketing photos. A fresh coat of paint can rejuvenate your home and enhance its appeal to buyers. Generally speaking, stick to neutrals — cream, beige, or greige walls and white trim. Avoid trendy colors and stay classic.

The paint study found white is the best color for kitchens, creams are well-suited to living rooms and neutral colored bedrooms appealed to buyers.

Curb Appeal - The first thing potential buyers will notice, whether they are viewing your home online or visiting in person, is its exterior. Whether they see a photo in an online listing, drive by, or attend an open house, it is crucial for your home to make a positive first impression. Make sure to edge the walkway, trim any vegetation away from the house, wash the siding, and clean the outer edges of the gutters. These details matter.

Smart Home Technology

Smart thermostats are a popular and relatively easy addition.
Smart lights make everything convenient and efficient.

New Lighting - Good lighting is crucial to showcasing your home’s features, especially if your home doesn’t have a lot of natural light. Upgrading your lighting is easy and inexpensive, and it can make even small rooms feel larger. Consider these steps:

Add new pendants in the kitchen.
Remove those old spec ceiling mounted lights with something more neutral.
Spruce up the decor with window treatments.

Small Bathroom Updates

You don’t need to rip out tile or add all new fixtures to give your bathroom a face-lift. In fact, 27% of sellers make improvements to the bathroom before selling, and they can be simple fixes.

Replace the vanity lights for a more updated look.
Re-caulk or reglaze the tub instead of replacing.
Upgrade fixtures with a spa ambiance in mind, like putting in a rain shower head.

Flooring - Sprucing up flooring is another common task, taken on by 24% of sellers.

Deep clean wall-to-wall carpets.
Buff out or refinish hardwoods, especially if there are visible scratches or stains.

Renovations that Won’t Add Value in Every Market - Not every home improvement project is guaranteed to attract more buyers or give you a good ROI, even if it’s something you enjoy while you’re still living in the home. If you’re renovating with the goal of eventually selling, you’d be wise to avoid the following upgrades:

Swimming Pools - Pools are a polarizing topic for buyers — some buyers love a home with a pool, but many others see it as a safety issue or a huge maintenance burden.
Luxury Upgrades - It depends on your real estate market and your specific neighborhood, but super high-end touches like professional-grade appliances and marble countertops may not be something buyers are willing to pay extra for.
High-End Landscaping - Similarly, investing in expensive landscaping and water features doesn’t always pay off, as buyers can see them as a hassle.

Minimum Repairs: What to Fix Before Selling a House

Before selling your home, it's important to address small repairs and maintenance tasks. These efforts show potential buyers that you have taken good care of the property. Making these minor fixes can significantly impact how quickly your home sells and how much you can sell it for. It can also help streamline the negotiation process, as buyers will not need to request repairs following their inspection.

Consider handling these projects before tackling larger improvements:

Replace any broken mechanical systems, such as your HVAC unit or appliances.
Remove peeling wallpaper and repaint the walls.
Take care of weeds and overgrown landscaping.
Repair any broken or leaky plumbing.
Replace cracked tiles.

Not sure what those must-do repairs are for your specific home? A pre-inspection can give you a good idea of the issues buyers are going to care about.

How to Budget for Renovations to Increase Home Value

Before embarking on renovations to boost your home’s value, determine how much you can spend and how you will finance the project.

1. All-Cash Home Improvements

Paying in cash is ideal as it avoids debt and interest. However, keep in mind that your funds will be tied up until the home is sold.

2. Using Financing for Renovations

Many homeowners finance their renovations, especially if they plan to sell soon after. This allows them to repay the loan once the home is sold.

Remember, most lenders require that your remaining mortgage balance and the new loan total less than 90% of your home’s pre-improvement value. For instance, if you owe $270,000 on a $350,000 home, you may qualify for a loan of up to $45,000.

Here are two common financing options for homeowners:

- Second Mortgage: Like a primary mortgage, a second mortgage allows you to borrow a fixed amount of cash as a lump sum with a fixed interest rate.
- Home Equity Line of Credit (HELOC): A HELOC is a revolving credit line secured by your home’s equity, allowing you to borrow as needed at a variable interest rate.

What if I Can’t Afford Home Improvements Before Listing?

If your budget won’t allow you to complete any repairs or improvements before listing, you have three options:

Sell As-Is: Selling a property as-is means you won't make any repairs before closing, so adjust your listing price accordingly. Buyers may negotiate for a lower price, especially if the property needs significant work.
Offer a Credit at Closing: If the buyer's inspection finds issues, you can offer a credit at closing to cover repairs. Keep in mind that the credit may be higher than the actual repair costs if you had completed them in advance.