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The 10 Best Home Improvements That Add Value

Carey Chesney8 minute read
December 24, 2021

So, you’re thinking about making some improvements to your home. Exciting!

You're not alone. Many Americans spent a lot of time in their houses over the past year or so thinking about ways to improve it. The pandemic forced us to bunker down at home with our families, adding new premiums on space and functionality. In fact, 53% of homeowners said they renovated their home last year. That’s right, more than half!

While comfort is important, another thing you should keep in mind is that home improvements can add value to your home. This makes renovations an investment, not just an improvement to your current daily life.

Making sure you get a good return on investment (ROI) means if and when it’s time to sell, those renovations will pay for themselves. Here, we will look at the best ROI home improvements to make sure you aren’t spending money you won’t get back later. 

The Best Home Improvements For ROI

Simply put, home improvement projects with the best ROI can greatly increase the value of your home compared to what they cost. That creates a win-win. You get the benefits of a refreshed home to live in now while increasing the amount you can sell it for later. Here, we will cover 10 improvements you can make that typically are a good return on investment (ROI) for homeowners.

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Exterior Home Improvements That Add Value

When it comes to selling a home for top dollar, curb appeal is critical. Many buyers make a decision about buying a home from a gut reaction that occurs before they even go inside. The outside of a house is the first thing home buyers see when viewing a property, and sometimes that’s all it takes for them to decide if they can envision themselves living there.

If you are looking for a return on investment when it comes to your curb appeal, consider the following renovations to increase your home’s value.

1. New Doors

Many older homes have wooden doors that are often weather-damaged and in need of replacement. If your home fits this bill, consider replacing your exterior doors with steel or fiberglass ones.

Steel and fiberglass doors last longer, are well-insulated and can be made to look like real wood. Replacing your old wooden door with a steel or fiberglass one can have a 77% – 90% return on investment and they cost about $1,500 – $3,000 to install. Switching to a steel or fiberglass door will increase both your home’s energy-efficiency and curb appeal.

Think about replacing your garage doors as well. They represent a large portion of your initial curb appeal, so if they are old and dingy, the negative impression can be pretty overwhelming.

In addition to aesthetic value, replacing your garage door can have safety and energy benefits. Older, deteriorated doors are easier to break into, increasing the chances of theft. They also let in more cold air in cooler months, making it less efficient to heat your garage.

You’re probably wondering exactly how much value this can add to your home. Here is the 2021 national average ROI for door upgrades:

  • Front door: 65%
  • Garage door: 93.8%

2. Roof Replacement

Make no mistake, a replacement roof is a major expense but is worth the cost. Roof replacements range from about $28,000 to $46,000, depending on the materials used. However, it is usually well worth the cost, bringing in a healthy home improvement ROI. In fact, the national average of costs recouped is about 56% – 60% for this type of renovation.

The main types of roofing materials you should consider for this renovation are asphalt single, cedar shake, composite shingle, metal, and solar tiles. Each has its own benefits and drawbacks, so do your research on the best option for your specific home. 

3. Vinyl Windows 

Any real estate agent will tell you that prospective buyers appreciate new windows, especially in an older home. Not only do they look nicer than older windows, they can greatly reduce a house’s energy costs. It’s also an expense they don’t need to worry about once they move in.

Vinyl windows are a great option because they are energy-efficient, durable, low-maintenance, and cost-effective. They are also easier to install than aluminum windows and come in a wide variety of colors, styles and sizes.

Replacing windows isn't the cheapest home improvement, but it’s not the most expensive either and the increase to your home's value is significant. Window replacement cost averages around $20,000 and has an average ROI of 68%.

4. Deck Addition

The advantages of adding an outdoor space to your home are plentiful. From neighborhood BBQs to relaxing afternoons in the sun, the possibilities are truly endless. If you are considering how to expand your outdoor space, keep in mind that a wood deck addition can be very attractive to prospective buyers.

You and your family can enjoy the outdoors more while you live in the home, which is the short-term benefit. The long-term benefit is making the home more attractive to prospective buyers who will envision themselves enjoying that new space if they purchase the home.

If you decide to go this route, use pressure-treated wood to ensure the deck lasts and can stand up to the elements. Consider refreshing your landscaping with new plants and flowers as well to enhance the look and feel of your new outdoor retreat.

Installing a new deck represents a great mix of good value while you live in the home and also when you sell it. The average cost of this renovation is $16,000 and the average ROI is 65%.

5. Vinyl Siding

Remember when we talked about curb appeal? Old, dirty and damaged siding on the outside of your house really doesn't help the first impression for prospective buyers. You are probably tired of looking at it yourself too, so it’s a good idea to replace it.

Much like final windows, vinyl siding is energy-efficient, durable, low-maintenance, and cost-effective. It also provides a nice return on investment. The average cost of this renovation is $16,500 and the average ROI is 68%.

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Interior Home Improvements That Add Value

While first impressions on the outside of the home are critical, the interior of the home is just as important. If the curb appeal was sufficient to get prospective buyers in the front door, then the real evaluation begins.

When buyers walk into your home, they want to be able to see themselves living there. If they can’t, they will move on to another house. While some home features are taste-specific, the home improvements that add value are ones that appeal to almost everyone.

6. Kitchen Renovation

Redoing your kitchen is one of the home improvements with the best ROI. It adds a ton of value and is a major selling point. If buyers love the kitchen in a home, they are likely to overlook other features they don't link. Conversely, if the kitchen doesn't work for them, it may not matter how many other features of the home they like.

This is why kitchen renovation is a popular real estate investment practice for house flipping and why this upgrade could be a major selling point. A kitchen is a large room with many features, so you may be wondering where to start your renovations. Some possible upgrades you should consider include:

  • Stone countertops: These can be an impactful renovation, since countertops usually make up a large percentage of your kitchen space. Stone countertops are attractive, durable, and require minimal maintenance. Usually made of soapstone, marble, quartz, or granite, stone countertops can handle pretty much anything you throw at them like hot coffee, red wine and dropped kitchenware.
  • New energy-efficient appliances: Home buyers love seeing shiny new appliances when they walk into a kitchen during a showing. Not only are they better looking than old appliances, they mean less need for maintenance and improved energy-efficiently.
  • Open shelving: Closed-door cabinets are necessary in any kitchen, as you don't want everyone looking at every dish in your home. However, adding some open shelving adds some storage that doesn't block the view to the rest of the house.
  • Modern cabinet hardware: Too often homeowners replace all their cabinets because they just don't like the look of them. If they’re in good shape and just not aesthetically appealing, then new handles or knobs, and perhaps a little paint, might be all you need.
  • Fresh coat of paint: Speaking of paint, a fresh coat goes a long way. Kitchens endure a lot of wear and tear from cooking, eating, and hanging out in them. This means wall and ceiling paint can get a little grubby quicker than other rooms in the house. Slap on a fresh coat of paint in a neutral color to improve the space and your overall home value.

This renovation isn't cheap, but can be a worthwhile investment. Remodeling a kitchen can cost anywhere from $26,000 – $149,000 and the average ROI is 53% – 72%.

7. Closet Upgrades

Many homeowners forget about upgrading their storage spaces, but creating organized closets can make a big impact for a small amount of money, compared to other projects.

Consider adding closet organizers, shelving and a fresh coat of paint, but avoid spending too much as you won’t get a big return on this small renovation. The ROI is only 40%. That said, 59% of homeowners had an increased sense of enjoyment after completing this project. This type of project falls is more about improving your current daily life instead of generating a big home value increase for when you sell.

8. Hardwood Flooring

A home project that does bring a large ROI is refinishing hardwood flooring. If you don't have wood floors, it may be in your interest to replace your carpet, vinyl or laminate flooring.

The majority of home buyers love hardwood floors, and if your hardwood is scruffy or you have 20-year-old carpet, buyers will see it as a headache and a project that will potentially have their new home under construction for weeks. Refinishing costs are pretty reasonable at about $2,600, with an excellent ROI of 100%.

9. Remodeled Bathroom 

Bathroom remodels are very popular, much like kitchen updates. Some common upgrades to consider are installing matching faucets, adding new tile floor, replacing a vanity, and changing a tub to a walk-in shower. Like a kitchen renovation, this is an expensive undertaking, with costs ranging between $38,000 – $75,000, but ROI can be as high as 87% for midrange remodels.

10. Primary Suite Addition

More and more home buyers are looking for a primary suite when home shopping. Having a bathroom dedicated to just the primary bedroom is becoming more of a must-have than a nice-to-have for buyers (perhaps another side effect of the pandemic?). This renovation won't be cheap, with costs ranging between $156,000 – $320,000, but ROI can be as high as 55% for midrange remodels.

The Bottom Line

Home renovations are a great way to enjoy your home while you live in it and increase the value for when you sell. Keep both of these things in mind when you are contemplating what types of upgrades to make. Home improvements with the best ROI include kitchens, bathrooms and hardwood flooring, so put these at the top of your list. Still hungry for more home renovation knowledge? Learn how to prepare for a remodeling project by reading this article on creating a home renovation budget.

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Carey Chesney

Carey Chesney brings a wealth of residential and commercial real estate experience to readers as a Realtor® and as a former Marketing Executive in the fields of Health Care, Finance and Wellness. Carey is based in Ann Arbor and attended the University of Wisconsin-Madison, where he majored in English, and Eastern Michigan University, where he recieved his Masters in Integrated Marketing & Communications.