Renovations that Increase Home Value and How Much They Cost

Renovating your home is not just about making it more comfortable or aesthetically pleasing; it’s also a strategic investment that can significantly boost your property’s market value. Whether you’re planning to sell soon or simply want to enhance your living environment, strategic renovations can offer substantial returns on investment (ROI).

In this guide, we’ll explore the renovations that can add value to your home, break down the costs involved, and highlight the specific upgrades that provide the best bang for your buck.

Explaining Return on Investment (ROI)

Return on Investment (ROI) is a financial metric used to evaluate the efficiency or profitability of an investment. It measures the amount of return on an investment relative to the investment's cost. In the context of home renovations and real estate, ROI indicates how much of the money spent on improvements you get back through an increase in the home's resale value.

A higher ROI means that the renovation project yields a greater return relative to its cost, making it a more worthwhile investment. This metric is crucial for homeowners to consider when deciding which renovations to undertake, as it helps prioritize projects that will maximize financial benefits and home value.

What home improvements have the best ROI?

Exterior renovation projects, such as replacing your entry door or your garage door and installing manufactured stone veneers, tend to have high ROI. One reason for this is that improvements to these parts of your home can be more easily appreciated by others outside.

As for interior renovations, minor bathroom and kitchen remodeling projects yield the highest ROI. These improvements are less disruptive than major renovations to the same areas and more affordable, offering substantial returns.

Here is the national average for the cost, resale value and return of several high-ROI projects:

Popular home improvement projects

Below, we cover ten of the most popular and high-return home improvement projects, including their cost and common upgrades. By focusing on these, you can maximize your home’s value while staying within budget.

Kitchen Renovations

The kitchen is often considered the heart of the home, and a well-executed kitchen remodel can yield a high ROI. On average, a mid-range kitchen remodel costs around $25,000, while a major upscale renovation can run upwards of $50,000 or more. Key upgrades include new countertops, modern appliances, updated cabinetry, and improved lighting.

Bathroom Renovations

Bathrooms are another critical area for adding value. A mid-range bathroom remodel typically costs between $15,000 and $25,000, while an upscale renovation can exceed $30,000. Popular upgrades include new fixtures, tile work, a double vanity, and enhanced lighting.

Adding a Deck or Patio

Outdoor living spaces are becoming increasingly popular among homebuyers, as they extend the living area and improve a home’s appeal. Adding a deck or patio can cost between $17,000 and $25,000, depending on the materials and size of the deck.

Garage Door Replacement

Replacing an old garage door can significantly boost your home’s curb appeal. A new garage door improves both aesthetics and security. This upgrade usually costs around $4,000.

Curb Appeal Enhancements

First impressions matter, and curb appeal plays a significant role in a home’s value. Simple enhancements like fresh paint, landscaping and front door replacements can cost between $2,000 and $5,000. These improvements make your home more attractive to potential buyers.

Window Replacements

Replacing old windows can enhance both the comfort and value of your home. This upgrade typically costs between $19,000 and $26,000, but varies widely based on the material and style of window. Energy-efficient windows can also lower utility bills and make your home more eco-friendly.

Roof Replacement

A new roof is a substantial investment but one that can significantly increase your home’s value. The average cost for a roof replacement ranges from $20,000 to $30,000, depending on the materials used. A new roof can enhance curb appeal and protect the home from future damage.

Basement Finishing

Transforming an unfinished basement into a functional living space can greatly expand your home’s usable square footage. This renovation typically costs between $20,000 and $50,000. Finished basements can be used for additional bedrooms, entertainment areas or even rental units.

Attic Insulation

Adding or upgrading attic insulation is a cost-effective way to increase your home’s energy efficiency. This renovation typically costs between $1,500 and $3,000. Improved insulation can lower energy bills and enhance overall home comfort.

Smart Home Technology

Incorporating smart home technology, such as security systems, smart thermostats and smart lighting, can make your home more attractive to tech-savvy buyers. These upgrades typically cost between $1,000 and $5,000, depending on the extent of the technology integrated. The ROI for smart home technology can vary, but it’s a growing trend that can set your home apart.

Summary of Renovations that Increase Home Value and How Much They Cost

Most exterior home renovations will add the most value to your home. Just how much they do so will depend on the scope of the upgrades and the materials used for the project. Interior home renovations can also have a high ROI, especially those to your bathrooms and kitchen. These are some of the areas that buyers pay the most attention to inside the home.