Best Home Improvements to Raise the Value of Your Home

Renovation does not always yield high profits. Determine which renovations will pay off when you sell.

Whether you want to sell in the next six months or a few years, remodeling with a return on investment (ROI) in mind is a wise financial move. Few investments recoup more than their full cost, but a few high-quality, useful, and coherent home improvements can boost buyer interest and resale value. It’s best to make home improvements that both meet your present practical demands and appeal to potential purchasers.

Expect to make at least a couple of renovations before selling your home for sale. According to research done by The Harris Poll in November 2022, 65% of sellers who have sold a house in the last two years undertake at least two home improvement tasks to prepare their home for sale. In addition, nearly one-third of recent sellers polled believe they might have achieved a greater price for their property if they had undertaken more home renovations or repairs before selling.

However, not all home renovation projects are made alike; we describe what will provide the best ROI and which low-cost projects you should not overlook below.

Home improvements with the highest return on investment in 2023

According to Remodeling Magazine’s 2023 Cost vs. Value Report, changing your heating and air conditioning system from fossil fuel to an electric heat pump could more than pay for itself if you’re planning a significant remodeling job in 2023. A typical HVAC conversion costs $17,447, but has a resale value of $18,366 – a 103.5% return on investment.

According to the research, the following ten house renovations had the highest national returns after HVAC.

1. Garage door replacement

Cost: $4,302
Resale: $4,418
Recoup: 102.7%

2. Manufactured stone veneer

Cost: $10,925
Resale: $11,177
Recoup: 102.3%

3. Entry door replacement (steel)

Cost: $2,214
Resale: $2,235
Recoup: 100.9%

4. Siding replacement (vinyl)

Cost: $16,348
Resale: $15,485
Recoup: 94.7%

5. Siding replacement (fiber-cement)

Cost: $19,361
Resale: $17,129
Recoup: 88.5%

6. Minor kitchen remodel (midrange)

Cost: $26,790
Resale: $22,963
Recoup: 85.7%

7. Window replacement (vinyl)

Cost: $20,091
Resale: $13,766
Recoup: 68.5%

8. Bath remodel (midrange)

Cost: $24,606
Resale: $16,413
Recoup: 66.7%

9. Window replacement (wood)

Cost: $24,376
Resale: $14,912
Recoup: 61.2%

10. Roof replacement (asphalt shingles)

Cost: $29,136
Resale: $17,807
Recoup: 61.1%

Best low-cost resale home improvement

It doesn’t take much money to make your property more desirable to buyers — and it can make a major difference.

“A well-maintained home is one of the best ways for homeowners to attract buyers,” Thumbtack home expert David Steckel said. “According to Thumbtack research, a well-maintained home can sell for 10% more than a comparable home in average condition.” Buyers are making the largest investment of their lives, and they want to know that they are investing in a well-maintained property.”

Consider these low-cost improvements to get the most bang for your cash.

Interior painting

Most houses have natural wear and tear, such as dings on the walls or nail holes where art was once hung. These flaws are especially obvious in marketing pictures and virtual tours. A fresh coat of paint provides your home a new and updated appearance to potential buyers.

40% of recent sellers paint the interior of their home before selling, and nearly 30% say this renovation helped their home sell.

“A fresh coat of paint — especially in the right color — can send a powerful signal to potential buyers that a home is well-maintained and contemporary,” says Amanda Pendleton, Zillow home trends analyst. According to research, sellers should consider the following:

Paint in neutral tones: In general, adhere to neutrals such as gray, beige, or greige walls with white trim.

Bathrooms painted terra-cotta brown: According to the 2023 Paint Color Analysis, bathrooms painted terra-cotta brown, a 2023 color of the year, might help a property sell for a $1,624 premium.

Paint kitchens pewter gray: According to the paint study, the best color for kitchens is mid-tone pewter gray, which fetches a premium of $2,553, while homes with a deep graphite gray kitchen can sell for an estimated $2,512.

Visual appeal

The façade of your property is the first thing buyers will notice, both online and in person. It’s critical that your property creates a strong first impression, whether they’re viewing your exterior photo in an online listing, driving by, or attending a private tour or open house. According to Zillow’s poll, landscaping was one of the most regularly done renovations for recent sellers as they prepared to offer their property, but there are other crucial curb appeal jobs as well.

Paint your front door: A fresh coat of paint on your front door can make a great difference. Buyers prefer black front doors to gray front doors and would pay $300 extra for a property with a rosy brown front door.

Paint your home’s outside: A fresh coat of paint on the entire exterior can also assist. According to study, one in every four sellers does this before selling. Time is money, and there are several low-cost curb appeal tasks that can be completed in a single weekend, such as replacing your house numbers or repairing any driveway or pathway cracks.

Home automation technologies

According to Report 2023, 42% of buyers consider smart home technology to be extremely significant in their home hunt.

Incorporate a smart thermostat and smart lighting: Smart thermostats and lights are popular and simple improvements that can help you save money on your energy bills. Smart thermostats were used by around 30% of North American houses to control their heating and cooling systems. Furthermore, according to 2022 characteristics that sell report, LED lighting is related with a 1.9% sale premium.

Consider hands-free technology: according to 2022 features that sell analysis, homes with smart or touchless toilets in the listing description sold for 0.7% more than predicted.

New lighting

Good lighting is essential for highlighting your property’s qualities, especially if your home lacks natural light. It is simple and affordable to upgrade your lighting, and it can make even small rooms appear larger. According to the Zillow poll, 27% of recent sellers updated light fixtures in their house. Consider the following steps:

Install LED bulbs: According to Zillow’s 2023 characteristics that sell study, LED lighting is related with a 1.5% sale premium.

Mirrors: Strategically placing mirrors can bring additional light into a room, which can be beneficial for staging your property. Furthermore, listings with mirrored walls and ceilings are becoming more common, appearing in 12% more listings in 2022 than the previous year.

Minor bathroom renovations

You don’t have to pull out tile or replace all of your fixtures to give your bathroom a makeover. In fact, 27% of recent sellers make bathroom upgrades before selling, and these can be basic solutions.

Replace old lighting: Replace the vanity lights for a more modern appearance.

Recaulk or reglaze the tub: This is a less expensive option than replacing an old tub totally.

DON’T invest in spa upgrades: Spa-inspired bathroom ambiance has increased sale values by approximately 2% in recent years, but in 2023, no resale benefits were associated with rain shower heads or spa elements.

Flooring

Another popular task undertaken by 29% of recent sellers is the replacement or refinishing of flooring. Just over 30% of recent sellers polled replaced carpet before advertising their home. Here are a few more enhancements to consider:

Deep clean your existing flooring: Deep cleaning your existing flooring is the second-most common project for sellers, with 35% doing so prior to listing.

Buff out or refinish hardwood floors, especially if there are apparent scratches or stains.

Install heated flooring: If you need to replace your flooring, consider heated flooring or radiant heat, which according to Zillow study may add a 2.1% premium to the sale price.

Renovations that will not increase value in all markets

Even if it’s something you enjoy doing while you’re still living in the house, not every home renovation project is guaranteed to attract more buyers or provide a high ROI. If you’re renovating with the intention of selling, you should avoid the following upgrades:

Swimming holes

Pools are a divisive topic among buyers; some prefer a pool, while others consider them as a safety hazard or a significant maintenance expense.

Luxury enhancements

It depends on your real estate market and neighborhood, but ultra-high-end features such as professional-grade appliances and marble countertops may not be something purchasers are ready to pay extra for.

Luxury landscaping

Similarly, pricey landscaping and water features may not always pay off because buyers may perceive them as a nuisance.

What should be fixed before selling a house?

Small repairs and maintenance are frequently required to demonstrate potential purchasers that you have taken good care of the home. These minor efforts can make a significant difference in how long it takes to sell your property and how much it sells for. It can also speed up the negotiation process because your buyer will not need to request repairs as a result of their inspection.

Consider tackling the following projects before embarking on larger improvements:

• Replace worn-out mechanicals, such as your HVAC system or appliances.
• Repaint and remove flaking wallpaper.
• Remove weeds and overgrown landscaping.
• Fix any faulty or leaking plumbing.
• Repair any cracked tiles.

Not sure what the must-do repairs for your particular property are? A pre-inspection can offer you a fair sense of the concerns that purchasers will be concerned about.

How to Budget for Home Improvements to Increase Home Value

Decide how much you can afford to spend and how you’ll pay for the renovations before investigating which ones will add the greatest value to your home.

Home improvements made entirely with cash

If you can afford it, paying cash is the best alternative because it eliminates debt and interest costs. However, the money you spend will be locked away until you sell the house.

Making use of finance for improvements

Many homeowners choose to finance their remodeling project, especially if they intend to sell their property soon after completion, because they will be able to repay the loan in full after closing.

There are several options for funding your project, but keep in mind that most lenders require that your remaining mortgage debt plus the amount borrowed total less than 90% of your home’s pre-improvement valuation. For example, if you owe $270,000 on a $350,000 home, lenders may consider extending you a loan of up to $45,000 ($315,000 is 90% of $350,000).

Here are two frequent methods of financing:

The second mortgage

A second mortgage, like your first mortgage, allows you to borrow a specified amount of money in a lump sum at a fixed interest rate.

HELOC stands for home equity line of credit.

A HELOC is similar to a revolving credit line that is secured by the equity in your home. You borrow what you need as you go, but the interest rate is variable, so your costs can rise (or fall) over time.

What if I can’t afford to make home improvements before advertising my home?

If your budget does not enable you to do any repairs or renovations before advertising your home, you have three choices:

Sell as-is: When you sell as-is, you inform buyers that you will not be performing any repairs prior to closing. You should adjust your listing price to account for this. Buyers may try to haggle the price even lower, especially if the property is in poor condition.

Offer a credit at closing: If your buyer’s inspection reveals any problems with the house, you can offer the buyer a credit that will allow them to make the repairs after closing. Often, the credit requested by the buyer is greater than the cost of the repairs if you had finished them ahead of time.