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How To Identify Home Improvements That Will Add Value

Miranda Crace4-Minute Read
UPDATED: July 26, 2023


No matter when you think you might make your next move, considering the resale impact of your home improvements makes sense. Even if you’re absolutely sure you’ve found your forever home, remember that one day your kids will have to decide to stay or sell.

Most home improvements won’t net you a profit upon sale, but the improvements we’re going to discuss will recoup 80% – 110% of your expenses. 

Keep in mind that in addition to directly recouping expenses by raising the sticker price, key improvements can also broaden the home’s appeal and widen your range of buyers. Making your house sale more competitive could help you avoid seller concessions and, in a hot market, even create a bidding war. Selling your home more quickly can also help you reduce the expenses associated with owning two properties at once.

Home Improvements That Add Value

The big takeaway of this article? Don’t get deterred if you aren’t really feeling a complete home renovation. The bigger-ticket items are more likely to result in a higher uptick to the final price when you sell, but some of the smaller fixes might have a better return on investment (ROI) as you calculate the cost to do the work proportional to the added value.

Minor Kitchen Remodel

Counters, cabinets, appliances, sinks and floors offer endless possibilities in terms of materials, styles, layout and cost. We suggest keeping it simple. Although return on investment for major and minor kitchen remodels varies by state, the national average according to remodeling magazine's cost/value calculator is a 53% recoup for a major remodel and an 81% recoup for a minor remodel. So, for a minor remodel of $21,000, you would recoup $17,000, and for a major renovation of around $60,000, you would recoup around $32,400.

Also, if you have some money to invest but don't want the headache of renovating, replacing kitchen appliances with modern, stainless steel options is a great way to up the resale value of your home.

Bathroom Adjustments

A mid-range bathroom remodel (think $20,000) will likely only recoup about 64% of its cost upon resale. It still might be worth it to you, as an appealing bathroom can be a huge selling point and can also do a lot for your own quality of life. However, if you’re not ready for a complete overhaul in these rooms, no worries. Smaller projects like fixing cracked tiles, recaulking the bathtub, replacing the toilet seat or installing a new showerhead or faucet can go a long way in sprucing up a dated or dilapidated bathroom.

Installing Wooden Floors

Wooden floors are pricey to install (averaging $4 – $6 per square foot), but they tend to offer a phenomenal ROI. You should research your local market to make sure that wooden floors are desirable there, but assuming typical market conditions, installing wood floors will probably recoup about 110%.

Giving Your Front Yard Some Love

Real estate agents are largely in agreement that curb appeal is the number one factor in a home’s marketability. $3,000 spent giving your garden a facelift will do wonders and will almost certainly net you a profit. 

Painting The Interior

You thought that neon pink color choice gave personality and made your family room sparkle in the ’80s, and no doubt it did! But sorry, because now it’s time to pick a more neutral choice – gray, beige, off-white, etc. – and spend a day painting over those fond memories in the interest of getting top dollar for your house.

You may think people can look past paint color when deciding to buy, but the reality is that it’s much easier to get distracted by it and let it sour your overall impression of the house instead of dismissing it. Not to mention, it’s easier for prospective buyers to imagine their own stuff fitting in a neutral space.

Painting your interior is another upgrade that generally recoups more than 100% of its cost. The exterior is much less of a sure thing when it comes to cost/benefit.

Any Major Concerns Highlighted In An Inspection Report

Remember that report your inspector handed you when you bought the house that had a list of items to take care of once you moved in? You know, the one that has been sitting in a basement drawer collecting dust since closing day? This report will be the ideal place to start looking for high ROI repairs.

Whoever buys the house will have a new inspection done, so any issues you can head off at the pass will put you in a stronger position as you negotiate your way to finalizing a deal.

Most buyers prefer essential issues such as an old roof to be addressed. Although attractive upgrades can seal the deal, the practical considerations that an inspection report will raise, such as old roofs or aluminum wiring, tend to weigh more heavily on buyers’ minds than anything else.

Financing Your High ROI Home Improvements

If you’re worried about having enough cash to make improvements, then financing could be an option. If you’re going after something major, a cash-out refinance or home equity line of credit (HELOC) could be the way to go.

However, if you’re keeping your upgrades modest (and as we’ve said, that’s often the way to go), using a personal loan on home makeovers may be a good move. You won’t have to pay closing costs associated with a refinance, or deal with the long timeline and complexity of a HELOC. Once you explore your loan options and secure your funds, you’ll be ready to start right away.

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Final Thoughts: Bigger Isn’t Always Better

Hopefully now you have the feeling that the size, financing and scope are wide-ranging, meaning your options on how to proceed are plentiful. Small fixes can make a big impact!

Keep in mind that many of these tweaks aren’t dependent on the season, so also consider small winter projects that will get you ready to list your home during the hot spring real estate market.

With a little homework and some elbow grease, you can find ways to improve your home and add to its resale value regardless of your budget, timeline or fix-it ability.

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Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years.