While a renovation can make your home more attractive and more valuable in the eyes of home buyers, not every project actually offers good value. One way to measure how much value a renovation is worth is to look at ROI (return on investment). ROI is especially useful if you’re planning on selling your home soon and just want to maximize the sale price.
For example, the top item on this list has a ROI of 102% — which means it actually raises your home’s value more than it costs. On the other end of the spectrum, an upscale master suite addition recoups less than half its cost.
Overall, home renovations are bringing in an average ROI of 60%, down from a high of 71% in 2014. A lot of that is because of cost increases in materials and labor, some of which will ease once pandemic-related supply chain issues are resolved, and some of which can be lowered by doing the work yourself.
Let’s look at the top-ROI home renovations and discuss what they entail.
Average ROI: 102%
Any experienced real estate agent will tell you that bathrooms and kitchens are the most important rooms in the house, so it should be no surprise that a bathroom remodel brings in the highest ROI on this list.
However, note the word “minor.” We’re not talking about a complete gut rehab, which would cost a lot more and actually lower the chance of making your money back. Instead, think along the lines of updating light fixtures, a fresh coat of paint, a trendy rainfall showerhead, a new tile floor, or a stylish new vanity.
Average ROI: 100%
You’ve probably heard the term “curb appeal” before. It’s shorthand for how attractive and appealing your home is at first sight as a prospective buyer walks up or climbs out of their car. Considering that most buyers make up their mind about a place within seconds, curb appeal is of the highest importance. That’s where landscaping comes in.
You want your front lawn to convey vitality, simplicity, and beauty. Have your trees, grass, and hedges trimmed, and treat or resod any dead spots in your lawn. Consider flower beds or window-mounted flower boxes. You want to present clean, sculpted lines, with a touch of color. Don’t go overboard, though, because buyers associate complex landscaping with expensive, time-consuming upkeep.
Average ROI: 93.8%
Similar to landscaping, a shiny new garage door will instantly improve your home’s curb appeal, making it much more attractive to buyers. That pays big dividends when it’s time to close the sale.
To get the most out of this upgrade, experts recommend a galvanized steel door, with heavy-duty steel tracks and a double coat of manufacturer-applied paint.
Average ROI: 92.1%
Installing a manufactured stone veneer on your home’s façade can have a huge impact on your home’s value, especially if it’s replacing grimy siding.
Aside from its aesthetic appeal, manufactured stone veneer offers a lot of advantages: durability, low maintenance, and customization. For instance, it can be made in a custom finish like brick or limestone.
Average ROI: 72.2%
Remember what we said about kitchens and bathrooms being the most important rooms in a home? While a minor kitchen remodel doesn’t return quite as much value as its bathroom equivalent, its ROI is still high enough to make this list.
Again, this isn’t a complete teardown. A minor renovation can include a new backsplash, new floors, new counters, refacing or replacing cabinets, updating appliances, or repainting the walls. Try to make your kitchen look more modern and brighter, as these are the two main qualities buyers like to see.