1. Kitchen renovations
“The kitchen remains one of the most-used rooms in a home. Buyers often look for updated, modern kitchens, so a kitchen renovation may significantly increase your home’s appeal,” Smolevskiy explains.
Remodeling’s most recent Cost vs Value Report indicates that a minor kitchen remodel offers a good return: The ROI is 85.7 percent (up 71.2 percent last year) from based on an average job cost of $26,790 that adds a home resale value of $22,963. It involves mainly cosmetic changes to a “functional but dated” kitchen: replacing the floor, cabinet fronts, countertops and appliances with midrange-priced alternatives, and repainting the walls and ceiling.
However, if you want to get a decent return on your kitchen renovation, keep costs low. Larger and more costly kitchen renos recoup less cash, Remodeling notes. A $77,939 major kitchen remodel, which involves adding new cabinets, an island, extra appliances and custom lighting, in addition to the above — has an ROI of 41.8 percent. And if you go with a really upscale remodel — all top-of-the-line, state-of-the art appliances, custom-built additions and high-end materials — the ROI drops to 31.7 percent.
“High-end kitchen remodels can cost up to $150,000 but will likely only get about $50,000 in return,” Tom Nolan, founder of AllStar Home, a Raleigh, NC home improvement company, says. “A lot of this can come from over-engineering a kitchen with too many unique features that only a selected buyer will recognize.”
2. Bathroom remodeling
“Much like the kitchen, bathrooms are frequently used [and] highly valued by homebuyers. An updated, stylish bathroom can greatly appeal to prospective purchasers,” Smolevskiy points out.
But a bathroom renovation‘s ROI often follows the same pattern as kitchen renovations.
“These are some of the most expensive remodel projects you can choose, but they rarely fetch more than $20,000 in value,” Nolan cautions. “Keeping a bathroom clean, organized and appealing is better than spending $10,000 on a computerized toilet – so get the value you want to see out of this project.”
According to the Remodeling report, a midrange-budget bath remodel, with an average price tag of $24,606, will yield an ROI of 66.7 percent. Basically, it involves replacing all the fixtures (tub, toilet, vanity) with fresher, modern versions. Try a more ambitious project that involves expanding the room, relocating fixtures, adding a walk-in shower — all to an estimated tune of $76,827 — your return on investment drops to only 36.7 percent.
3. Energy-efficient improvements
Energy-efficient enhancements to your home are definitely in, and can make a big difference in resale value, as increasing numbers of buyers are asking about green features or clean power sources. “Upgrading to energy-efficient options can help lower utility bills and increase the overall sustainability of your home, which is an attractive feature for buyers,” says Augusto Bittencourt, a real estate salesperson with Compass in New York City.
Case in point: A HVAC conversion, which involves converting a traditional fossil-fuel-burning furnace to an electric heat pump for cooling and heating. While this can cost $17,747, on average, it could more than pay for itself — its ROI is estimated at 103.5 percent, in fact, topping Remodeling’s Cost vs Value list.
“Equipping your home with a more energy-efficient HVAC system, upgrading your insulation or putting on a new roof will have a profound effect on your home’s value long-term,” says Calvin Lamont, co-host of HGTV’s By It or Build It. “And now is a great time to get more for your investment with the Inflation Reduction Act (IRA) in effect. Every state is different, but with the new IRA, homeowners may be eligible for tax credits or rebates when purchasing energy-efficient appliances.”
4. Outdoor enhancements
In terms of investment returns, exterior remodels rule — and have done so for the last 30 years, Remodeling’s report notes. In fact, four of the top five jobs yielding ROIs above 100 percent are outdoor enhancements.
“Replacing your garage door, front door or vinyl siding are particularly great options for making your house more sellable and getting back what you put in,” Nolan adds. Remodeling’s report concurs: A garage door replacement, with a job cost expected at $4,302, boasts a recouped cost of 102.7 percent, slightly more than a steel front door replacement (100.9 percent ROI and $2,214 expected cost). Covering your house exterior with manufactured stone veneer can repay you at resale by 102.3 percent. Replacing siding pays off well too: 94.7 percent ROI for vinyl siding or 88.5 percent for fiber-cement siding.
Even “simple tasks like adding a fresh coat of paint on the exterior can boost the value of your home,” Lamont says.
5. Basement conversions
Finishing your basement and making it habitable is another home-improvement project that can pay off. That’s because it adds precious living space (always an addition to home value) without adding to your home’s footprint. Averaging around $57, 500, a full basement redo can deliver as much as an 86 percent return on investment, according to the National Association of Realtors’ “2022 Remodeling Impact Report.”
“Basement conversions don’t always get you back what you invest. However, if you do it right, you can convert your basement in a way that will make your house sell in no time,” continues Nolan. “These days, with many people working from home, turning your basement into a home office, for example, can ensure your house is more attractive than without it.”
