There are many reasons to start a home improvement project. You might have some outdated plumbing you need to take care of, or an addition to the family you need more room for, or maybe you’ve had your eye on a particular part of the house since you bought it and you can finally take on the project. Whatever the reason for your home improvement project in the here and now, you should also consider the future. Many home improvement projects can help boost the value of your home when it comes time to sell – often times you can recoup at least part of the cost of the project or even exceed it.
Even if you’re not doing the project specifically to get your home ready to sell, it’s an important factor to consider. Some projects are more valuable than others when it comes to adding value to your home, and some may even decrease the value. Here, we’ll cover five home improvement projects that can help boost your home’s value, what determines if a renovation adds value, and a few projects that can actually decrease your home’s value.
5 Home Improvement Projects That Can Add Value to Your Home
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Kitchen remodel
The biggest return on investment in home projects is the kitchen. This is where realtors and interested buyers usually spend the most time while checking out a new home. The kitchen is also the hub of many households, so it is often a very important consideration for potential buyers.
The 2023 Cost vs. Value Report shows that a kitchen remodel involving cosmetic changes like new floors, cabinet fronts and appliances, can net an 85.7% return on investment (ROI). For example, a $26,790 kitchen remodel can add $22,963 to a home sale. If you do go with a kitchen remodel, keep costs down to maximize the additional value. A major remodel, such as replacing cabinets, adding custom lighting and expensive appliances will likely not return as much as a more modest renovation. For example, a $77,939 kitchen remodel may only add $32,574 of value to your home, which is only an ROI of 41.8%.
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Bathroom remake
Next up, the bathroom. Potential buyers pay these areas extra attention. Updated walls, floors and fixtures can really make your home more marketable, while clearly old or outdated bathrooms can give buyers pause. Plus, you can charge more for your home when the bathrooms have been remodeled. According to the RenoFi Renovation Index, a mid-range bathroom remodel has an ROI of 64% while an upscale remodel can net a 56% return. You will already start to notice that bigger, more lavish renovations do not always generate a matching boost in your home’s value.
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Upgrade your insulation
Improving your home’s insulation generally pays for itself when you sell your home, according to the Remodeling Impact Report. While an expected complete return on investment is great in and of itself, there are also additional benefits to this project. Between the time the project is done and the time you sell your home, your home will be warmer in the winter and stay cooler in the summer, so you save even more money on heating and cooling costs.
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Basement conversion
Converting a basement into a livable area can be another fabulous way to increase the value of your home. Adding an additional space for entertaining or a spare room for guests can make your home much more appealing to some buyers, and you can recoup most of the cost when you sell. According to the National Association of Realtors, a basement conversion can cost $57,500 on average while bumping your home value up by $49,250 for an 86% ROI.
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Replace your roof
A roof replacement is one of the most expensive homeowner jobs, so a new roof can significantly boost your home’s resale value. However, not all roof replacements are the same in either cost or ROI, so it’s important to carefully consider what kind of replacement you are going to do. According to the 2022 Remodeling Impact Report, a new roof at $12,000 will easily pay for itself. However, a larger, metal roof, at $52,436, will only boost a home’s value by $28,196, netting you a 54.8% ROI.
What Determines if a Renovation Will Add Value to Your Home?
In addition to the type of remodeling job, several other factors can determine if home improvements will increase the value of your home, including:
- Current real estate market
- Home décor trends
- Quality of the work
- Materials used
- Buyer preferences
The last factor on the list is arguably the most important and the most difficult to predict. It’s impossible to know what each individual buyer is looking for and equally impossible to please everyone with your home improvement projects. The most important thing is to do your research, be mindful of maximizing your ROI, and ensure high quality work. If you do that, eventually the right buyer will come along.
Are There Any Home Renovations That Can Decrease the Value of my Home?
Believe it or not, yes, some remodeling projects can lower home value. For the most part, the renovations that would decrease value are common sense. This includes renovations that are highly personalized, converting bedrooms into closets, and remodels that require ongoing maintenance. Once you stop to think about it, this makes perfect sense. If a renovation is highly personalized to you, it’s unlikely to fit the needs of someone else. If you have taken what could be two rooms and converted one of them into a large closet, buyers with families may be less interested and so your market becomes smaller. If a remodel is going to require ongoing maintenance, that could easily be a dealbreaker for a buyer looking at two similar properties where the other doesn’t have that ongoing need. Again, be sure to do your research before embarking on a home improvement project so you don’t end up spending a lot of money only for it to decrease your home’s value.
Home improvement projects are a big investment, and even if you’re not doing it to prepare your house to sell, it’s important to consider the future implications of a renovation. Carefully planning your home improvement projects can help increase your home’s value for when you do sell down the road. However, many of these projects are expensive and you may not be looking to sell your home for a number of years. If you’re looking into home improvement projects, you may want to consider funding it with a Home Equity Line of Credit (HELOC) so you don’t put your usual budget under too much strain.
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