Home renovations are a great way to make your house feel like new and homeowners often make upgrades that they hope will increase their home’s value. But not all projects do. Highly personal renovations can actually decrease a home’s value if they don’t appeal to a wide range of buyers.
Unlike the fickle trends that affect music, clothing and cell phones, home renovation styles don’t change as rapidly. Luckily, there are still plenty of home improvement projects that will add value. In the current real estate market, the best return on home improvements comes from smaller remodels and energy-efficient upgrades.
Home Renovations That Add Value in 2024
Kitchen Remodels
A kitchen remodel is a significant project that adds value to your home. Typically, these projects include changing the layout and refacing or replacing cabinets. These projects can have a significant impact on your ROI and should be done with careful consideration.
Major Kitchen Remodels
A major kitchen remodel is an extensive renovation that involves changing almost all aspects of the room, including the layout, flooring, and appliances. These projects typically offer a decent ROI but can also be the most expensive. A midrange kitchen remodel costs an average of $77,939, with an estimated resale value increase of $32,574, offering an ROI of 41.8%. This represents a relatively moderate return compared to other home renovations.
Mid-Range Kitchen Remodels
Mid-range kitchen remodels are slightly more affordable than a major project and can still deliver a solid return on investment. They usually include replacing the cabinets and upgrading the countertops, but they may not involve removing walls or making other structural changes. A minor kitchen remodel typically costs around $26,790 and the added resale value is approximately $22,963, resulting in an ROI of 85.7%.
Bathroom Renovation
A sleek, updated bathroom is one of the best ways to increase home value. According to Remodeling Magazine’s Cost vs Value Report, bathroom renovations have an average return on investment of 66.7 percent.
Full bathrooms typically feature a toilet, sink, and shower or tub. The space may have a window and a linen or supply closet. If your space needs extra storage, consider installing a built-in cabinet or shelving. Installing a vanity is another option for creating more storage and increasing counter space.
You can also add more natural light to a bathroom by adding a skylight or replacing the existing window. Replacing the window will also allow you to upgrade energy efficiency and change the frame size, if desired.
If you live in a co-op or condo, completing a bathroom remodel may require additional planning and time to secure permits. Sweeten can help you find vetted general contractors and navigate building board approvals, if necessary.
The above-mentioned renovations cost an average of $24,606, and increase an estimated resale value of $16,413, offering an ROI of 66.7%.
Energy Efficient Upgrades
Homebuyers nowadays are willing to pay a premium for homes that have energy-efficient features. This makes it important for homeowners to consider energy efficiency upgrades when making renovations, as they can increase the value of their home and lower energy bills.
Some of the best energy efficient upgrades include LED lighting, new doors and windows and insulation. LED lights use 75% less electricity than traditional incandescent bulbs and last 25 times longer. Replacing old, single pane windows with new Energy Star certified windows can reduce heating and cooling costs by up to $500 per year. Insulation and air sealing help prevent conditioned air from escaping the home during the winter and unconditioned air from entering during the summer, thus increasing energy efficiency and decreasing utility bills.
Many of these energy-efficient upgrades also offer significant tax savings. However, sorting out which tax credits you qualify for can be complex, so it’s best to consult with a tax professional.
Enhance Crub Appeal
Whether you’re planning to sell or simply want to improve the look of your property, enhancing curb appeal is an inexpensive and effective way to increase your home value. Eye-catching features such as well-maintained landscaping, a new front door and a charming porch swing are sure to draw the attention of potential buyers.
Curb appeal is the first thing that homebuyers see and evaluate when deciding on whether or not to purchase a property. Investing in curb appeal will make your property stand out from the competition and attract the right kind of buyers. Basic landscaping enhancements (like adding shrubs, trees, or fresh mulch) typically cost between $3,500 and $5,500, depending on the size and scope of the project. These improvements can add up to $5,000 to $15,000 in resale value, offering an ROI of 100% or more in some cases.
Similarly replacing the front door is one of the most cost-effective upgrades. In 2023, a steel door replacement cost around $2,214, with a resale value of about $2,235, delivering a 100.9% ROI
To maximize the ROI on your curb appeal investment, ensure that you’re following local trends. For example, if modern landscaping styles are popular in your area, consider upgrading to a sleek design. Keep in mind, however, that not every buyer is looking for the same features, so incorporating elements that aren’t in line with current market demands could deter buyers from expressing interest in your property.
HVAC Cooling and Heating Systems (Depends on Location)
Upgrading to a modern HVAC system will boost your property value, and also save you money on energy costs for years to come. Buyers will likely request a home inspection, so having a new and efficient system is an important asset in a competitive market.
In addition to increasing resale value, an energy-efficient HVAC system helps reduce the carbon footprint of your home, which appeals to eco-conscious buyers. In fact, some states and utilities offer rebates or tax credits to encourage homeowners to upgrade to more energy-efficient equipment.
In recent years, installing an electric heat pump typically costs between $10,000 and $20,000, depending on the system’s complexity, location, and labor costs and homeowners can expect an average ROI of about 50% to 70%, with resale value additions ranging between $5,000 and $15,000 depending on the region and market demand for energy-efficient homes.
Depending on your geographic location, upgrading to a new HVAC system may or may not add value to your home. Generally speaking, however, it is considered a sound investment because most potential buyers will want to purchase homes that have a functioning and efficient HVAC system.
Remodel Attic or Basement
While we all love customizing our homes, it’s important to stay in line with the needs of buyers if we want to add value. Not all improvements will increase resale value, and some might even detract from it. This is particularly true if they are too personalized or go beyond the tastes of most homebuyers.
Remodeling the attic or basement is an excellent way to create extra living space and add value to your home. In many cases, this project can provide a return on investment of up to 100%. This is especially true if you run ductwork so that the spaces can be used as bedrooms or offices, and if the rooms are insulated and properly heated.
Basements are often unfinished, making them ideal for turning into a home entertainment area or a bedroom. However, they are also prone to moisture and require extensive plumbing work. Finished attics are more affordable and offer better insulation, which can make them a great alternative to basement renovations. They also give you a blank canvas to design a unique, beautiful space. For example, you could add a skylight to maximize natural light and bring an airy feel to the room.
Deck Addition
If you’re a homeowner who loves entertaining and enjoying the outdoors, a deck addition may be the perfect home improvement project for you. In fact, a recent study shows that a new deck can add up to 50% of the cost of the addition to your home’s value at the time of sale.
Not only does a well-designed deck add a focal point to your yard, but it can also provide a great spot for entertaining guests and relaxing with a good book or some warm summer sun. Additionally, you can make your deck even more functional and enjoyable by adding built-in seating, a pergola, or an outdoor kitchen.
The average cost of a wood deck addition was around $17,051 and the resale value added is approximately $8,553, offering an ROI of around 50%. While a composite deck addition was higher, averaging $23,430 with a resale value of $9,325, resulting in an ROI of 40%. The cost can vary based on the size of the deck, materials used, and location.
Another benefit of a deck addition is that it can replace some of your lawn, so you’ll spend less time mowing the grass or dealing with weeds. For these reasons, it’s no wonder that deck additions have one of the highest returns on investment out of any home improvement.
Conclusion
Many landlords invest in renovations to increase a property’s value and rental income. Landlords can maximize ROI by focusing on projects that address tenant concerns such as eco-friendly upgrades and attractive living spaces. Landlords also need to be aware of market fluctuations that may affect ROI.
For example, renovating a kitchen to reflect a farmhouse or all-white design trend might boost your home’s value in a hot market – but this aesthetic will likely be outdated within 20 years and may deter prospective buyers. A more practical option for increasing home value is to convert unused space, such as attics or basements, into living areas.
The estimates provided here are meant to give you an at-a-glance view of which projects have a high probability of boosting your home’s resale value, while offering you benefits while you live in the home. But remember, every project has a different return on investment, based on local markets, home size and features, and other factors.