What Are the Best Home Improvements to Boost Value?

Before you knock down a wall or drop five figures on solar power thinking it’ll add to your home’s resale value, make sure you know which projects are actually worth it.

Most home-improvement projects will add some value to your home. But not all remodeling will increase the value of your home enough to recoup the entire cost of the improvement. In some cases, even though your upgrade may not increase the value of your home very much, you and your family will enjoy it while you live there—and that’s worth it.

To help you decide which home improvements could add the most value to your home, we’ve categorized them into six types:

• Improvements to make if you plan to stay in your home
• Best-value home improvements for sellers
• Improvements to avoid if you plan to sell your home
• Invisible improvements
• Boosting value in specific rooms
• No-demo improvements

So let’s go through these home-improvement types one at a time.

Improvements to Make if You Plan to Stay in Your Home

If you’re not planning to move any time soon, the best improvements are the ones that make daily life better, even if they never fully pay you back at resale.

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Four kids, two adults . . . and one bathroom. That’s the kind of math that might make you consider adding another bathroom to your home. No more waiting in line for the shower and you’ll add tons of value to your house, right?

Sort of. You’ll definitely get in the shower quicker, but that extra bathroom doesn’t add as much value as you’d think. You’ll only get back about 50% on your investment when you sell. That might be fine with you if you’re planning on staying in your house for a while—because the convenience outweighs the cost. So, if you know you’re staying put, make improvements that make sense for you. Just know you might not see a good return on investment (ROI) on those.

In general, projects that add square footage are a good investment in your family’s enjoyment of your home, but that doesn’t always translate to a strong ROI. You’ll do a little better with the ROI if you remodel unused areas like your attic or basement into living spaces.

If you’re planning to stay in your home a few more years and need the extra space to keep family members from tripping over each other, by all means, add the space! Your family will have plenty of time to appreciate the addition, and once you’re ready to sell, the boost in square footage will also boost your asking price—just maybe not enough to cover the full cost of the addition.

Best-Value Home Improvements for Sellers

If you’re getting ready to sell your house—or flip one—the best-value improvements are cheap exterior updates that boost curb appeal.

For the last several years, simply replacing your garage door has had the best ROI—adding more than double its cost to your home’s value.¹ The other top performers are just as surprising. Here’s how the most popular projects stack up nationwide:

Cost vs. Value of Popular Home Improvements

Improvements to Avoid if You Plan to Sell Your Home

The improvements to avoid before selling are the big, pricey remodels. They deliver the lowest return of any project on the list, often only about half what you put in.

If you’re planning to sell, these home improvements just aren’t worth it:

• Upscale primary bedroom suite addition (18% ROI)
• Upscale major kitchen remodel (36% ROI)
• Upscale bathroom addition (36% ROI)³

Those improvements aren’t bad choices. They just aren’t the best home improvements for adding value to your house before selling it. If you’ll be living in your home a while and would enjoy doing some super swanky updates to your bathroom, go for it! But think twice before you take on any of these projects—like adding a pool—just to increase the sales value of your home.

Invisible Home Improvements

Invisible improvements like a new HVAC unit, water heater or roof aren’t really improvements at all—they’re maintenance. They protect the value your home already has instead of adding to it.

You can drop a huge chunk of cash on home maintenance projects. Unfortunately, even when these features are brand-new, most buyers aren’t willing to pay more for them. Buyers expect functional features like these to simply . . . function. And they don’t feel like they should pay for wear and tear that happened while you owned it.

On the other hand, if any of these invisible parts of your home aren’t in working order, it will detract big time from your home’s value. (Would you want a house with a nonfunctioning septic system? Eww.) Even if you plan to sell soon, you can’t avoid these problems since they will certainly turn up in a home inspection. Go ahead and tackle them, just realize that you’re maintaining your home’s value—not adding to it.

If anything, the selling point on these types of improvements is that they reduce long-term home maintenance costs for you and a potential buyer (which, with the price of things like energy these days, could be a big selling point). Other “invisible” improvements that reduce home maintenance costs include:

• Insulating your hot water pipes
• Patching up leaky windows and doors
• Using long-lasting LED lightbulbs
• Staining and sealing wood decks
• Converting climate-appropriate landscaping (lawn to desert if you live in the Southwest, for example)

The best home improvement for reducing maintenance costs is window replacement. New vinyl window frames aren’t a showpiece like a top-to-bottom kitchen renovation, but they can save a ton on the costs to heat and cool your home.

Plus, new windows can also boost your home’s value. On average, homeowners nationwide can expect to recoup 76% of the $22,073 price tag of a window replacement project.⁴

Boosting Value in Specific Rooms

Different rooms in your home serve different purposes, and with a few specific upgrades, they all can add some value to your home overall. Here are just a few ideas for improving each room in your home—ranging from small, cosmetic changes to serious renovations. Keep in mind that all of these home-improvement projects have different ROIs depending on where you live:

• Foyer/Entry: Upgrade stairs/banisters or replace/refinish flooring.
• Living Room: Replace/refinish flooring, add a fireplace, or deep-clean fireplace rockwork.
• Kitchen: Repaint/refinish cabinets, add an island, replace old appliances, upgrade countertops, replace sink hardware and garbage disposal, or update backsplash.
• Bedrooms: Upgrade closets (install shelving, make better use of the space, etc.) or replace/refinish flooring.
• Bathrooms: Replace flooring, add storage cabinets, change showerheads and other hardware, upgrade vanity, or recaulk/reglaze bathtub.
• Garage: Replace garage door, install shelves, or add storage areas.
• Basement: Finish the space with insulation, drywall, windows, closets, flooring, HVAC connection, etc.

No-Demo Renovations

No-demo renovations like fresh paint, updated light fixtures, and new cabinet hardware give you the most bang for your buck. They’re affordable, fast and low-hassle (no demolition or dust), and they make a dated home feel current.

Paint: Whether you’re adding accents of color or switching to trendy greige (gray and beige . . . it’s a thing) in every room, paint definitely adds value. Paint also conveniently covers up the battle scars of everyday family life, like scuff marks and your five-year-old’s marker-fueled masterpiece. It’s amazing what a little paint can do to freshen up any room. Remember, lighter, neutral colors are best, especially in small spaces like bathrooms, because they make rooms look larger and brighter.

Lighting: Have your lighting fixtures been around since the Reagan administration? Then it’s time to tear down those lights (but seriously . . . just unscrew them, no tearing necessary). New light fixtures don’t have to be super fancy—just get a more modern-looking chandelier for your dining room or a nice hanging light for your kitchen. This not only makes your house more appealing but could also potentially save a buyer money in energy costs. It’s time to illuminate the possibilities!

Front door: Replacing a wood front door with a steel one has lots of benefits. Besides added curb appeal, steel doors last much longer than conventional wood doors and don’t run the risk of cracking or splintering over time. They also help insulate your house, which saves on heating and cooling costs.

Smart home upgrades: Adding value to your home can be as easy as making some of your home features smarter. Try upgrading your thermostat so you (or the new owner) can regulate your home’s temperature from your phone. Smart upgrades don’t have to cost a lot of money. Depending on how old your system is and the type of thermostat you buy, a smart thermostat may simply connect to your existing heating and cooling system.

Home office: Lots more people are working from home these days. So that means buyers are looking for a place to set up shop in a potential home. If you’re an empty nester, setting up that extra bedroom with a desk and computer will give buyers the right ideas. You can go further and ensure that your home’s internet connection is strong enough for those long Zoom calls by upgrading your home’s internet infrastructure. An in-wall ethernet system can be installed to give your home office (and other rooms) a direct line to the internet instead of relying solely on Wi-Fi.

Landscaping: When it comes to home value, curb appeal is definitely a thing. If a buyer walks up to your house and sees a dead lawn and dying rose bushes, they may be inclined to do a double take at your asking price. And even if you’re not selling, who wants to live in a plant graveyard anyway? It doesn’t take much effort to clean up the yard, add some live plants, and reseed (or resod) your lawn. You can add other features that will pretty up the place even more, like paver stones. And as we said earlier, you can even replace your lawn with something less maintenance-heavy (depending on where you live).

How Should You Pay for Home Improvements?

Pay for home improvements with cash you’ve saved for the project—never with a home equity line of credit (HELOC), a credit card, or any other kind of debt.

This is where Ramsey and the home-improvement magazines part ways. A renovation only pays off when you sell—if your local market rewards it. If you borrow money to do the project, you’ll pay extra in interest for a payback that might never show up. That’s backward.

In What Order Should Home Improvements Be Done?

Here’s the order that keeps you out of trouble:

1. Safety and structural repairs first. A leaking roof or a dead furnace can’t wait. If it’s urgent and you don’t have the cash, that’s exactly what your emergency fund is for (we’ll cover more on that later).
2. Maintenance next. Protect your home’s value by staying on top of the boring stuff—like your HVAC, water heater and gutters.
3. Cosmetic upgrades. Paint, lighting and curb appeal are fun, but they come after the needs are covered, and only when you can pay cash.
4. Major remodels last. They usually deliver the lowest return, so take your time and save up to pay with cash.

If you’re following the Baby Steps, cosmetic and major projects come after you’ve paid off your debt (Baby Step 2) and set aside a fully funded emergency fund (Baby Step 3). Never steal from that emergency fund for something like a kitchen update—cosmetic projects and wish-list items are not emergencies.

So how do you actually save up? Use a sinking fund. A sinking fund is money you set aside a little at a time for one specific expense. Instead of financing a $12,000 stone veneer project, you save $1,000 a month for a year and pay for it outright. Set a realistic renovation budget, then build a line for it in your EveryDollar budgeting app, give every dollar a job, and put any extra money toward your sinking fund.

Research Before You Renovate

Making improvements to your home can definitely boost its value, which is a great thing whether you’re selling your home or not. Your home is your biggest investment, after all. The tricky part to all of this is that we’re looking at national averages. Individual markets place different values on different home improvements.

The best way to gauge what you can expect in terms of resale value on home improvements—especially if you’re planning to sell soon—is to talk to a real estate agent who is an expert in your market. They’re sure to know the local trends, and they can show you how other homes with the features you want to add are selling. That way, you can make an educated decision before you start ordering lumber and knocking down walls.

To find a real estate agent in your area who’ll genuinely serve you and your needs, use our RamseyTrusted^® program. The pros in our network are professional real estate agents with a track record of success and excellent customer service. That’s why they carry the RamseyTrusted seal of approval.