What Home Renovations Give You The Best ROI When Selling

Not all home renovations deliver equal returns. Understanding which improvements generate the highest return on investment (ROI) can mean the difference between building substantial equity and wasting thousands of dollars. Whether you are preparing to sell or simply want to make smart improvements, knowing where to invest your renovation budget is essential for maximizing your home's value.

Home Value Increase Simulator

Use this interactive tool to estimate how different renovation projects could affect your home's value. Select your current home value, choose the improvements you are considering, and see the potential return on your investment.

Highest ROI Home Improvements

According to the 2025 Cost vs. Value Report published by Zonda and the Journal of Light Construction, exterior home improvements continue to dominate the highest-ROI rankings. For the second consecutive year, eight of the top ten highest-return projects are exterior replacements, emphasizing that curb appeal carries significant weight in today's housing market.

Source: 2025 Cost vs. Value Report, Zonda/JLC

Why Exterior Projects Outperform Interior Renovations

The dominance of exterior projects in ROI rankings stems from several factors. First, curb appeal creates immediate emotional impact. Buyers form opinions about a home within seconds of seeing it, and an attractive exterior signals that the property has been well-maintained. Second, exterior replacement projects typically require less specialized labor than complex interior remodels, keeping costs lower. Third, these improvements have broad appeal, unlike interior design choices that may not match every buyer's taste.

Real estate professionals consistently emphasize that buyers will not appreciate a stunning kitchen if the roof is leaking or the exterior looks neglected. Basic maintenance and curb appeal form the foundation upon which all other value is built.

Curb Appeal: The Foundation of Home Value

Landscaping and Outdoor Spaces

Beyond structural improvements, professional landscaping can deliver extraordinary returns. According to the National Association of Realtors, professional lawn care with weed control and fertilizer can provide up to 300% ROI while helping homes sell faster. Fresh mulch, seasonal flowers, pathway lighting, and well-maintained shrubs create an inviting atmosphere that resonates with buyers.

Deck additions have also become increasingly valuable. A wood deck offers approximately 95% ROI at an average cost of $18,200, while composite decking returns about 89% of its $25,100 average cost. These outdoor living spaces extend a home's functional square footage and appeal strongly to buyers prioritizing outdoor entertainment areas.

Kitchen and Bathroom Renovations

While exterior projects dominate ROI charts, kitchens and bathrooms remain the rooms that most strongly influence buyer decisions. These spaces receive the most scrutiny during showings and can make or break a sale. However, the scope of your renovation matters significantly.

Minor Kitchen Remodels: The Sweet Spot

Minor kitchen remodels stand as the sole interior project to consistently deliver over 100% ROI. At an average cost of approximately $27,500, these projects return about 113% of investment. A minor remodel typically includes refacing cabinets or replacing cabinet fronts, installing new countertops, updating appliances, adding a tile backsplash, replacing flooring, and installing new fixtures and hardware.

The key is avoiding the temptation to over-customize. Buyers prefer kitchens that are move-in ready but offer opportunity for personalization. Neutral cabinet colors, stainless steel appliances, and solid surface countertops have broad appeal. Exotic finishes or highly personalized designs may not resonate with the next owner.

Major Kitchen Remodels: Proceed with Caution

Major kitchen renovations involving layout changes, custom cabinetry, and high-end appliances typically cost $85,000 to $150,000 or more. These projects usually return only 38-50% of their cost at resale. This does not mean major renovations are unwise, but they should be undertaken primarily for personal enjoyment rather than investment purposes. If you plan to stay in your home for many years, the daily benefit of a dream kitchen may justify the cost.

Bathroom Updates

Bathroom remodels typically return 70-74% of their cost. Mid-range bathroom renovations averaging $25,000 to $30,000 can significantly improve a home's appeal. Modern buyers prioritize spacious showers over whirlpool tubs, double vanities with ample storage, updated fixtures and lighting, and tile work with clean lines. Adding a second bathroom to a home with only one can increase sale price by nearly 9%, making it one of the most valuable additions for homes lacking adequate bathroom count.

Interior Improvements That Add Value

Flooring Upgrades

Flooring sets the foundation for a home's interior aesthetic. Refinishing existing hardwood floors offers exceptional value, with some estimates showing returns up to 147% on refinishing costs. The character and warmth of restored hardwood appeals to nearly all buyer segments.

For homes without hardwood, luxury vinyl plank (LVP) flooring has emerged as a popular choice. It mimics the appearance of hardwood while offering durability, water resistance, and easier maintenance. LVP typically returns 70-80% of its cost and appeals to buyers who want attractive flooring without hardwood maintenance requirements.

Finished Basements and Added Square Footage

Converting unused basement space into livable area can significantly increase home value. Basement remodels show approximately 71% ROI according to recent data. Popular conversions include home offices, recreation rooms, guest suites, and fitness areas. The key is creating space that feels intentionally designed rather than afterthought construction.

Adding usable square footage through room additions generally returns 70-86% of costs, with bathroom additions typically performing best. However, additions require careful consideration of neighborhood values. Adding 1,000 square feet to become the largest home on the block may not recoup its cost.

Energy Efficiency and Smart Home Features

Energy-efficient upgrades appeal increasingly to environmentally conscious buyers and those seeking lower utility bills. Backup power generators have emerged as a high-value addition, particularly in regions prone to severe weather or grid reliability issues. These systems show approximately 95% ROI nationally, with returns exceeding 139% in hurricane-prone regions.

Smart thermostats offer modest direct ROI but can save approximately $50 annually on energy bills while appealing to tech-savvy buyers. Energy-efficient windows typically return 67% of their cost while improving comfort and reducing utility expenses during ownership.

Renovations to Approach Carefully

Not every popular renovation delivers strong returns. Understanding which projects typically underperform helps avoid costly mistakes.

Solar Panels

Despite environmental benefits and potential utility savings, solar panel installations show some of the lowest ROI in recent Cost vs. Value reports. National averages show returns around 30-40%, varying significantly by region. Solar makes most sense when utility rates are high, incentives are available, and you plan extended ownership to benefit from energy savings.

Major Kitchen and Bath Overhauls

As noted earlier, extensive kitchen and bathroom renovations rarely recoup their full cost. A $150,000 kitchen renovation may add only $60,000-$75,000 to home value. These projects should be undertaken for lifestyle improvement rather than investment purposes.

Swimming Pools

Pools typically add only 7% to home value while costing $30,000-$80,000 or more to install. In cooler climates or family-oriented neighborhoods where pools present safety concerns, they may actually detract from value. Pools make sense in warm climates where they are neighborhood-standard features.

Highly Personalized Improvements

Custom home theaters, elaborate wine cellars, or specialized hobby rooms appeal to narrow buyer segments. While personally rewarding, these spaces rarely return their investment cost. The more specialized and customized a renovation, the less likely it will appeal to future buyers.

When to Renovate: Timing Your Improvements

The timing of renovations affects both cost and ROI. If selling within one year, focus on cosmetic improvements with immediate visual impact: fresh paint, landscaping, updated fixtures, and professional cleaning. These low-cost changes create strong impressions without major investment.

For two to five year timelines, strategic improvements like door replacements, bathroom updates, and kitchen refreshes can add significant value while providing years of personal enjoyment. Major renovations make most sense when you plan to remain in the home long enough to benefit from daily use.

Seasonal timing also matters. Spring is ideal for exterior work like painting and roofing. Summer accommodates major renovations. Fall works well for interior projects. Winter typically offers the best contractor availability and potentially lower rates for indoor work.

The Role of Real Estate Agents in Renovation Decisions

Before committing to significant renovations, consulting with a knowledgeable local real estate agent provides invaluable perspective. Top-performing agents understand what buyers in your specific market prioritize and can identify improvements that will actually move the needle on your sale price.

An experienced agent can provide a comparative market analysis showing how your home compares to recent sales, identify specific improvements that would address buyer objections, advise on appropriate renovation budget relative to neighborhood values, and help time your sale to maximize returns on completed improvements.

EffectiveAgents connects homeowners with top-performing agents who have demonstrated track records of securing higher sale prices. These agents average $55,000-$65,000 more on home sales than average agents, partly through their expertise in advising on pre-sale improvements.

Frequently Asked Questions