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9 Home Renovations That Have Strong ROI
Some renovations recoup more than others.
Renovating your home may be a great way to transform your space into one that fits your lifestyle and aesthetic. You might add a fresh coat of paint to your living room to make it feel brighter or remodel your entire kitchen to create the cooking space of your dreams. The choice is yours, but some improvements have a greater return on investment (ROI) than others.
If increasing your home’s value is a priority, consider some of the following improvements.
Key Takeaways
Some home improvement projects, like renovating your kitchen or replacing old flooring, have the potential to add more value to your home than others.
The exact ROI from a home renovation depends on your location, your home’s condition, trends in your area, and other similar factors.
Letting a professional handle more complex renovations could help you increase your home’s value more effectively.
1. Add or Upgrade Your Home’s Air Conditioning
Summer days can be sweltering, no matter where you’re located, so adding or upgrading your home’s air conditioning system could make beating the heat a breeze.
If you live in an area where most homes lack air conditioning, adding a system to your home could make it easier to sell in the future, since many homebuyers see AC units as a benefit.
If you have an older or outdated unit that’s struggling to keep up with your needs, replacing it with a more efficient unit may allow you to increase your asking price. Or, if you choose to stay in your home for years to come, you could take advantage of that improved efficiency, and potentially save money on your energy bill without struggling to stay comfortable.
Installing a new air conditioner usually costs between $3,890 - $7,953, depending on the unit, the size of your home, and the contractor you’re working with.1 While the price may seem high, new AC units tend to result in a 30% return on your investment if you sell your home down the line.2
2. Update Your Kitchen
The kitchen is often considered the heart of the home, but if your kitchen is full of outdated appliances or doesn’t offer the features you need, renovating could be a great choice. New appliances are often more energy efficient, potentially saving you money on utility bills and their updated appearances could make your space look and feel more modern.
If you don’t have the desire or the funds to upgrade your appliances, you could always try resurfacing your cabinets and adding a fresh coat of wall paint to breathe life into the space. Remember, renovations don’t always have to be a full restart.
The price of a kitchen renovation varies significantly, depending on how much you choose to alter. The good news is that these remodels tend to offer an ROI between 53.5% and 81.1%, depending on the projects involved.3
3. Replace Your Front Door
Adding a new door can improve your home’s curb appeal for potential buyers. New front doors also tend to have better insulating properties, meaning they block the heat and cold from seeping in (or out!) of your home. Over time that improved insulation could save you money.
New front doors may also have enhanced security measures like steel construction, multiple deadbolts, or kick-proof lock plates, which help make your home more secure and may increase your property value. In fact, research shows that replacing your front door could have an ROI of nearly 188%!4
4. Add a Deck or Patio Space
You don’t have to build an addition to increase your living space. Adding a deck or patio may make your home feel larger and give you a comfortable place to enjoy nature without leaving your property.
When exploring your options keep your budget in mind. If you’re working on a tight budget, installing a simple deck or a concrete slab patio may be a good choice. But if you have a larger budget, you may want to explore using nicer materials or adding features like fire pits, outdoor kitchens, lighting, canopies, and more.
Often, the more features you add, the higher the potential ROI may be.5 Just be sure to work with a professional to make sure everything is up to code.
5. Replace the Windows
Installing new windows is another option for helping to improve your property value. New windows are typically more energy efficient, meaning you could save on heating and cooling costs once they’re installed. Even better, new windows could reduce the risk of leaks and water damage, potentially saving you on costly home repairs in the future.
This home upgrade is typically best if you’re planning to stay in your home for at least a few years, as the average cost is $730 per window.6 If you plan on moving immediately after installing new windows, you may not recoup the cost or see enough ROI to justify the expense.
You may also qualify for an energy-efficient home improvement credit for your window replacement. This could increase your tax refund by reducing your overall tax liability. If you’re interested in exploring this tax credit, speak with a tax professional.
6. Remodel the Bathroom
A bathroom remodel could be something small like repainting or upgrading your sink fixtures or something large like redoing the shower or replacing the flooring. The renovation type you choose impacts the ROI you may see.
Your return also depends on the condition of the bathroom prior to renovations. Smaller upgrades could help make the space look newer, even if you leave the more expensive items unchanged.
Similar to kitchens, the return is dependent upon several factors, but a mid-range bathroom remodel could result in an ROI of 73.7% on average.7
7. Upgrade Your Roof
Replacing your roof is another improvement that could increase your home’s value: typically a new roof helps ensure homebuyers will experience reduced maintenance costs (or at least avoid emergency repairs) for years to come. However, this is another renovation that may be best for homeowners who don’t plan on selling soon given the high investment cost.
The average cost of a new roof comes to $30,680. After installation, you may see a return on investment of about 57%.8 You may be able to increase this return if you’re replacing a severely damaged roof or upgrading to a long-lasting metal roof.9
8. Ditch Old Carpet for Hardwood Floors
Old carpet could make your home look dated. Replacing the old carpet with hardwood floors may be a renovation you want to prioritize to achieve a more modern look.
Hardwood flooring is frequently high on a homebuyer’s wish list, which could make this upgrade worthwhile if you’re thinking of selling soon.
While the quality and cost of hardwood may vary, homeowners may see up to a 150% return on investment after installing hardwood floors.10
9. Invest in Landscaping
Adding landscaping could also increase your home’s value. The exact amount of ROI you see depends on where you live and the types of landscaping installed. Professionally installed landscaping could increase curb appeal, which may make it easier to attract prospective buyers when selling.
Typically, you could expect to see an ROI of between 20% and 30% when you work with a professional landscaper.11
Final Thoughts
The right home improvement projects can transform your space while also increasing your home’s value for years to come. These projects could be a great place to start if you’re ready to breathe new life into your space or increase your home’s value before placing it on the market.
Not sure which improvement to tackle first? Check out our guide to learn how to prioritize home improvements.
Ready to start remodeling but don’t have funds on hand? Learn how a personal loan could help you cover the costs.