HOME RENOVATIONS THAT OFFER THE BEST ROI

Home Renovations That Offer the Best ROI

Home Renovations That Offer the Best ROI

Blog Article

Not every home upgrade pays off—but some renovations consistently deliver higher returns than others, especially when it comes time to sell or refinance. Whether you’re planning a modest refresh or a full remodel, knowing which projects offer the best ROI home renovations (Return on Investment) can help you spend smarter and boost your home’s equity with confidence.

In this article, we’ll break down the top-performing renovations by ROI, including kitchens, bathrooms, curb appeal, and energy efficiency. You’ll learn how to balance cost vs. return, which trends are worth following, and how to avoid overinvesting in the wrong upgrades.

Whether you’re prepping for sale or planning to stay for a few years, this guide helps you renovate with resale value in mind.

Understanding Best ROI home renovations

ROI (Return on Investment) in home remodeling refers to how much of your renovation cost you’re likely to recoup when you sell your home. It’s not just about profit—it’s about adding real value that future buyers are willing to pay for.

What Affects Renovation ROI:

  • Location: What’s valuable in one city may not be in another
  • Home price bracket: Over-investing in a starter home may lower ROI
  • Project type: Some renovations have a consistently higher return than others
  • Timing: Market demand, interest rates, and buyer trends all influence return
  • Execution quality: Poor craftsmanship or DIY gone wrong kills ROI fast

Key Takeaway: Smart renovations balance cost, quality, and buyer appeal—and not all upgrades are created equal.

Kitchen Remodels: Minor vs. Major ROI Comparison

The kitchen remains one of the most valuable rooms to remodel—but how much you spend matters. Surprisingly, minor kitchen remodels often outperform major overhauls in ROI.

Minor Kitchen Remodel (Best ROI):

  • Cost: $15,000–$25,000
  • ROI: 75%–85%
  • Updates include: cabinet refacing, new hardware, upgraded appliances, lighting, and backsplash

Major Kitchen Remodel (Lower ROI):

  • Cost: $40,000–$75,000+
  • ROI: 55%–65%
  • Involves: custom cabinets, layout changes, high-end finishes, luxury appliances

Why Minor Wins: It modernizes without pricing you out of the market. Buyers care about functionality and cleanliness over brand-name ovens.

Pro Tip: Stick with classic, timeless materials (white cabinets, stone counters, stainless steel) to attract a broader buyer pool.

Bathroom Upgrades and Their Payoff

Like kitchens, bathroom remodels bring strong returns, especially when they improve layout, lighting, or fixtures without major structural changes.

Best ROI Bathroom Projects:

  • Midrange remodel: ROI 60%–70%
  • Cosmetic refresh: New vanity, mirror, lighting, tile, fixtures
  • Add a bathroom: ROI up to 60%–80% depending on layout and market

Low-ROI Bathroom Mistakes:

  • Over-personalized tile patterns
  • Removing the only tub in a family home
  • Luxury upgrades in mid-tier markets

Smart Tip: Use neutral colors, durable materials, and focus on lighting, storage, and water efficiency for the best balance of ROI and function.

Exterior Projects with the Highest Returns

Curb appeal isn’t just a buzzword—it’s one of the most cost-effective ways to add perceived and real value to your home.

Top ROI Exterior Projects:

  • New Garage Door: ROI 90%+
  • Steel or fiberglass entry door: ROI 65%–85%
  • Siding replacement (vinyl or fiber cement): ROI 70%–80%
  • Exterior paint or power wash: Instant refresh
  • Simple landscaping: ROI up to 100% if it boosts first impressions

Why These Work: Buyers make judgments before they walk in the door. A clean, modern exterior signals a well-maintained interior.

Basement and Attic Remodels: Worth It?

Turning underused square footage into livable, finished space is one of the most valuable things you can do—if done correctly.

Basement Remodel:

  • ROI: 70%–75%
  • Ideal for: Guest suite, entertainment space, home office, gym
  • Must include: Moisture control, egress windows, code compliance

Attic Bedroom Conversion:

  • ROI: 65%–75%
  • Adds usable space in high-demand areas where square footage is at a premium

Key Benefit:Adds true functional value by increasing livable square footage without building an addition.

Energy Efficiency Improvements (Windows, HVAC, Insulation)

Homebuyers today are as concerned with operating costs as they are with design. That’s why energy-efficient upgrades have become some of the smartest investments you can make.

High-ROI Energy Upgrades:

  • Energy-efficient windows: ROI 60%–70%
  • New HVAC systems: ROI 50%–70% depending on system and climate
  • Improved insulation (attic/walls): ROI 75%+ in colder regions
  • Tankless water heaters or upgraded boilers: Long-term savings
  • Smart thermostats: Small cost, big efficiency and appeal

According to the National Association of Home Builders, adding a full bathroom can increase a home’s value by 5.7%, and even more in multi-family or urban markets.

Pro Tip:Market your home’s energy report or efficiency rating during sale—buyers love seeing reduced utility costs in writing.

Smart Home Upgrades That Add Real Value

Tech is no longer a luxury—it’s becoming an expectation. Low-cost smart upgrades can increase convenience and buyer appeal, especially among younger and tech-savvy buyers

High-Impact Smart Home Features:

  • Smart thermostat (Nest, Ecobee)
  • Video doorbell (Ring, Arlo)
  • Smart locks and garage door openers
  • Wi-Fi connected lights, shades, or security systems
  • Leak detectors in kitchens, bathrooms, and basements

ROI Range:

  • Varies: Not always monetary, but often the tiebreaker in competitive markets
  • Bonus: Increases the perceived modernity and security of the home

Tip: Stick to interoperable, platform-agnostic systems so buyers aren’t locked into specific apps or voice assistants.

Flooring Replacements and Refinishing ROI

Flooring sets the tone for your entire home—and outdated or damaged floors can make even a renovated space feel tired. This is one of the easiest ways to increase value and buyer confidence.

Best ROI home renovations - Flooring Options:

  • Hardwood refinishing: ROI 70%–80%
  • Luxury vinyl plank (LVP): Affordable and water-resistant
  • Consistent flooring throughout: Increases perceived square footage
  • Tile (in bathrooms/kitchens): Long-lasting and desirable

Flooring to Avoid:

  • Wall-to-wall carpet (especially in dining rooms or bedrooms)
  • Cheap laminate that looks or feels hollow
  • Mismatched flooring between rooms

Pro Tip: If budget is tight, refinish what you have before replacing. Clean, polished floors go a long way—even on a limited budget.

Garage and Entry Door Replacements

One of the more info surprising ROI champions in remodeling? Your front and garage doors. Both offer high returns because they affect security, curb appeal, and first impressions.

ROI Stats:

  • Garage door replacement: ROI up to 95%
  • Steel front door replacement: ROI 65%–85%
  • Fiberglass entry with glass panels: ROI 60%–75%

Bonus Benefits:

  • Improved insulation
  • Better home security
  • Higher perceived value before buyers enter the home

Tip: Choose a style that complements your home’s architecture—modern homes may suit sleek flush panels, while traditional homes benefit from carriage-style doors.

Decks, Patios, and Outdoor Living Spaces

Outdoor space has become more valuable than ever, especially after 2020. Buyers want homes that extend beyond their walls—and patios and decks do just that.

Best-Performing Outdoor Upgrades:

  • Wood deck addition: ROI 65%–75%

  • Stone or paver patio: Similar ROI with lower maintenance

  • Outdoor kitchen or built-in BBQ: Great for higher-end markets

  • Covered outdoor seating area or pergola

Smart Tip: Add simple solar or LED lighting, a fire pit, and low-maintenance landscaping to increase usability—and therefore value.

What Renovations Have the Lowest ROI?

While some upgrades boost resale value, others cost more than they return—especially if they’re overly personalized or don’t match the surrounding neighborhood.

Common Low-ROI Renovations:

  • Swimming pools: ROI 25%–50%, often viewed as high maintenance
  • Luxury kitchens with custom features in mid-range homes
  • Overbuilt additions that price you out of the neighborhood
  • Sunrooms or conservatories: Expensive, limited-use ROI
  • Wall-to-wall carpeting in main areas
  • High-end tech that may become obsolete

Why They Fall Short: These renovations often serve niche preferences, lack practical function, or cost too much to yield a profitable return.

Pro Tip: If a renovation is for personal enjoyment, that’s fine—just don’t expect it to increase resale value proportionally.

How to Calculate Your Project’s ROI

To make smart renovation decisions, it’s helpful to understand how to estimate ROI before you commit to a project.

Basic ROI Formula:

ROI (%)=(Increase in Home Value−Cost of RenovationCost of Renovation)×100\textROI (\%) = \left( \frac\textIncrease in Home Value – \textCost of Renovation\textCost of Renovation \right) \times 100ROI (%)=(Cost of RenovationIncrease in Home Value−Cost of Renovation​)×100

Example:
  • Bathroom remodel cost = $15,000
  • Appraised value increase = $10,500
  • ROI = (10,500 – 15,000) / 15,000 = -30% (loss)

Smart Tip: Focus on cost-effective improvements with broad buyer appeal, and research your local real estate market before starting.

Renovating Based on Your Market

Real estate is local—what adds value in one city may be neutral or negative in another. To maximize ROI, align your projects with regional buyer expectations.

Market-Specific Examples:

  • Cold climates: New windows, insulation, heated floors
  • Hot markets: Central A/C, outdoor living, shade structures
  • Urban areas: Storage, in-unit laundry, home office space
  • Suburbs: Finished basements, family-friendly layouts, fenced yards

How to Learn Your Market:

  • Talk to local realtors
  • Analyze recent sales and listing features
  • Study renovation cost vs. value reports in your city
  • Visit open houses and see what updates are being prioritize

Renovation ROI Rankings by Project (Quick Reference)

Here’s a snapshot of average national ROI percentages for popular renovations:

Project Average ROI
Minor kitchen remodel 75%–85%
Midrange bathroom remodel 60%–70%
Garage door replacement 90%–95%
New entry door (steel/fiberglass) 65%–85%
Attic bedroom conversion 65%–75%
Basement remodel 70%–75%
Siding replacement 70%–80%
Energy-efficient windows 60%–70%
New wood deck 65%–75%
Smart home upgrades Varies, but strong resale appeal

Tip: Use this chart to prioritize upgrades that fit your budget and resale goals.

ROI + Lifestyle = Smart Remodeling

Renovating your home should balance resale value and personal lifestyle needs. The best ROI comes from projects that improve your daily comfort and also increase buyer appeal down the road.

Here’s how to remodel smart:

  • Prioritize functional, timeless improvements
  • Stick to your budget and market expectations
  • Keep finishes neutral and high quality
  • Focus on energy savings, layout efficiency, and curb appeal

Whether you’re staying five years or selling in six months, the smartest renovations are the ones that serve both your family and your financial future.

Frequently Asked Questions (FAQs)

Which home renovations offer the best ROI?

Minor kitchen remodels, garage door replacements, bathroom upgrades, and energy-efficient windows consistently offer the highest returns.

How do I know if a renovation will increase my home’s value?

Compare recent comps in your neighborhood, consult with a local agent, and consider average ROI for the specific project in your region.

Should I renovate before selling?

Yes—selectively. Focus on cosmetic and functional updates that improve buyer first impressions and address any dated or worn areas.

What upgrades add value to older homes?

New electrical panels, HVAC, plumbing, windows, and kitchen or bath remodels are especially important in homes built before 1980.

Is it worth hiring a professional for ROI-based remodeling?

Absolutely. Poor DIY execution can reduce value. Hire licensed professionals for major work to ensure code compliance and long-term durability.

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