If you conduct an online search for “high ROI renovation projects,” you’re likely to get a mixed bag of results. For someone trying to cut through to the facts about home renovations, consider this:
What Jane decides to do in St. Petersburg, Florida, has little to do with Joe’s project in Boise, Idaho. Buyers in different locations will value different projects and amenities. There isn’t a one-size-fits-all guide to increasing value, and someone who states that a new bathroom will return 86% ROI doesn’t know if that statistic will apply to you.
However, there are ways to identify the projects that bring value to your unique situation.
Here are the three steps to identify which projects best protect your investment:
1. Pinpoint what buyers are actively looking for.
2. Take into account national data on ROI for projects.
3. Determine which areas of your home need a makeover.
Using this comprehensive approach, we’ve created a list of five high-ROI home renovations that buyers are actively looking for, so you can compare them to the places in your home that need the most work. By employing all three steps, you might not be able to quantify the return immediately, but when you do decide to sell your home, you’ll have a much better chance to make some money off the renovation effort.
A Note for DIY Homeowners
As with all home improvement, labor can come at a considerable cost. If you decide to DIY, you’ll likely spend less and see higher returns on your investment. If you’re just getting started on a project, remember, preparation equals profit. The longer you prepare by conducting research or prepping surfaces correctly—the better the results.
1. Building a Wooden Deck
Depending on your location, wooden decks can be one of the most sought-after features in a home. People are thrilled over the chance to sit beneath the stars, have friends over for a barbeque, and enjoy pleasant weather in a comfortable setting. Building a deck can make your home feel more functional and larger with the added space. The cost of building a deck varies, depending on the size and material used, but you’ll recoup most of your investment when it’s time to sell your home.
If you already have a deck, refinishing it can provide a considerable boost. If you DIY, expect the job to take a weekend or two—depending on the size of the deck. Pick a beautiful stain that meshes well with your home’s color, and do plenty of prep before applying the first coat.
National ROI: 72.1%
Most Important Features for Buyers Rank: 1
DIY on a Budget: https://youtu.be/jz0qMAghSoQ
Average Cost: See the infographic below
2. Minor Kitchen Renovations
It’s not surprising that an updated kitchen is among the top features buyers want in a home. People are spending more time indoors and less time eating out. The kitchen is already important for homebuyers, and new trends like health-conscious eating only increase its appeal.
When you decide to give your kitchen a makeover, keep it minimalistic. If you’re shooting for high-ROI, think about aesthetics. You can stretch your dollar with projects like installing a new ceramic backsplash, wrapping your old Formica countertops, and slapping a fresh coat of paint on the cabinets. You don’t need all new appliances to enjoy your kitchen and get an excellent return on your investment!
National ROI: 77.6%
Most Important Features for Buyers Rank: 2
DIY on a Budget: https://youtu.be/ZozMSEYIRfI
Average Cost: It varies on the scope of the renovations and if you DIY. Some limited renovations are under 2k, but an extensive minor kitchen renovation (including appliances) averages about 23k based on 2020 data.
3. Adding Hardwood Floors
Pulling up that old smelly carpet and installing beautiful wooden flooring is an elegant solution on every buyer’s wish list. The overhaul of existing flooring can add instant value to your home.
You’ll have to choose between solid and engineered hardwood, then specify which species of wood you prefer. Reflooring your home is doable for most homeowners; however, it’s a tricky project to tackle. Consider using factory prefinished planks to greatly reduce the effort you’ll need to install a hardwood floor.
If your home already features hardwood floors, look into refinishing them. For roughly $200 and a weekend of your time, you can completely refresh existing hardwood—in some cases, to look as good as new.
National ROI: Between 70-80%
Most Important Features for Buyers Rank: 3
DIY on a Budget: https://youtu.be/UMEO2T7dv_8
Average Cost: On a price per square foot basis, it costs between $3-$7 for materials and $3- $5 for labor.
4. Completing the Basement
Nothing frightens potential buyers more than walking into a room with metal snags, pipes, concrete, and other unsightly materials hanging from the walls or ceiling. An unfinished basement wastes space in a home. Many homeowners choose to install new flooring, paint walls, and bring in furniture to liven up the place, extending the home’s functional footprint.
Others have more work ahead of them as some basements are unfinished shells that need drywall installation, electrical wiring, and structural work. The return indicates buyers are more than willing to pay for the hassle, with the ROI sitting at 70-75%.
If your basement is sad and dilapidated, a renovation could increase the value of your home for years to come. If you decide to DIY, ensure you understand the process or hire professionals to lend a hand.
National ROI: 70-75%
Most Important Features for Buyers Rank: 6
DIY on a Budget: https://youtu.be/RIzNQhfVFWA
Average Cost: Between $5,000-40,000
5. Minor Bathroom Remodel
Nothing screams, “I need a bathroom update!” like muted pink and yellow colors, mold, peeled caulking, and tiles that were popular in the ’70s. Buyers expect clean and functional bathrooms with decor that fits the rest of the home. One of the best returns you can get on your investment comes from a bathroom refresh.
Bathroom remodels are the perfect candidates for DIY. If your plumbing and electrical are in great shape, you can simply install tile and refinish your bathtub. Consider changing out your countertops as well, especially if they don’t require much physical material.
National ROI: 64%
Most Important Features for Buyers Rank: 8
DIY on a Budget: https://youtu.be/ZeewhIe2fns
Average Cost: $1,500-15,000
The Bottom Line
If you’re trying to upgrade your standard of living and maximize the return on your investment, these home renovation projects look great and don’t cost a fortune. Updating a home is all about enjoying the upgrades you’ve made, putting in features buyers are actively seeking, and keeping repairs cost-effective (so you can put money towards your future home).
Take inventory of your current home and install or modify features buyers want. If you’re not in a rush, try to learn some DIY and save a bit of money, too. When it comes time to finally sell your home, enlist the help of a professional real estate agent to ensure a smooth transaction.
