Property

The best ROI home improvements – get the biggest return on your investment

Want to make sure that renovation is worth it when selling? Real estate experts identify the home improvement areas that will give you substantial returns – and those that don't

A bright kitchen with garden view
(Image credit: David Lovatti/Future)

What are the best ROI home improvements, and will the home improvement you are planning give you a decent return on your investment? These are the questions every savvy home seller should be asking themselves, probably even more so than the more traditional question, 'will it add value'?

While the best ways to add value to a home include dozens of different ways to boost your home price, if you end up sinking substantially more capital than you will ever recoup through a sale, a home improvement will not be a good investment. 

Conversely, a simple improvement that is inexpensive and requires a minimum of effort but will give you back 100 per cent is definitely worth it. 

The best ROI home improvements

Seasoned real estate experts point out the best ROI home improvements, and explain how to avoid losing money.

1. A kitchen remodel

Kitchen layout ideas

(Image credit: Ginny Macdonald/Sara Tramp)

This probably will surprise no one, but remodeling a kitchen remains one of the home improvements with the highest levels of return on investment. Jennie Berger, who co-runs a residential redeveloper and house flipping duo Property People, has over 20 years' experience redesigning properties with the maximum ROI (return on investment) in mind. She estimates that a kitchen remodel, although costly, 'will return anywhere between 50-75% (or more).' 

If you're deciding between a kitchen and a bathroom remodel, go for the kitchen. The reason, Jennie explains, is that 'even if the bathrooms are older, a retail buyer perceives a full kitchen remodel as more valuable and convenient. Buying a house with a newer kitchen (and older bathrooms) means the new homeowner can tackle the bathrooms if/when they're ready, one bathroom at a time.'

Buyers simply do not want the hassle of a kitchen renovation – 'If you've ever lived through a kitchen renovation, setting up a makeshift kitchen and having to actually use it, can be a total (dusty) nightmare!'

And even if you don't want to completely remodel a kitchen, there are other ways to make a big difference when selling. Jennie especially recommends 'refacing your existing cabinets, swapping old countertops for new quartz or granite, changing out the hardware, and adding a fresh coat of paint, new stainless steel appliances, and more modern, trendy plumbing and electrical fixtures.'

2. Refinished hardwood floors

Colorful green country kitchen in 19th century Dorset barn conversion

(Image credit: Jonathan Bond/ Future)

This is another great home improvement that can give you a very high ROI – 70-80 percent in many cases. Jared Barnett, a Licensed Real Estate Salesperson and Co-Founder of The Barnett-Bittencourt Team at Compass in NYC, is confident that painting and refinishing hardwood floors 'can make an apartment feel new again, which will ultimately make a buyer willing to pay more money. A buyer‘s first impression is critical to how they perceive an apartment, and doing these projects will have a huge impact.'

You can learn how to refinish hardwood floors yourself, or hire a professional. Whatever you do, don't miss an opportunity by covering up an existing wood floor with carpet, which will almost certainly lose you money. 

3. The small details

kitchen with pendant lights and green wall tiles

(Image credit: deVOL)

If you really don't fancy a huge DIY project, don't worry – there are plenty of smaller changes you can make that, cumulatively, will give you a good return on investment when selling.

Real estate investor Deb Cleveland, Founder of Small Town Dynasty, has 32 years of real estate investment experience and has renovated more than 400 properties
in upstate New York. 

She recommends going through your entire home and making strategic replacements; for example, 'if your budget will afford it, picking light fixtures that all have the same sheen that goes with the look of your home.' Metallic accents catch the eye, so 'installing new doorknobs and kitchen cabinet pulls to match the sheen on your light fixtures ties your look together giving it a high-end decorator look on a budget.'

4. A fresh coat of paint

Coastal living room ideas with blue and yellow color scheme

(Image credit: Jake Curtis)

Exploring fresh paint ideas is one of the easiest and most impactful ways to prepare your home for a sale. According to a HomeGain 2012 Top DIY Home Improvements for Seller survey, if you get it right, just repainting the interior of your home could give you a 107 percent ROI. 

Glen Pizzolorusso, a Licensed Associate Real Estate Broker with Compass in Fairfield County, Connecticut, highly recommends a fresh coat of paint: 'I cannot tell you what a fresh coat of paint does to the interior of a house. If you are thinking of selling your home, paint the interior before listing it. A fresh coat of light (think whites, light grays and creams) paint to main living spaces can create the feeling of a larger, warmer space.'

5. Garden landscaping

A front garden with grass, a bench and wisteria climbing the house exterior

(Image credit: Polly Eltes)

Finally, don't forget your outdoor space and its huge potential to give you great returns for not very much investment and effort. Marina Vaamonde, Real Estate Investor and Founder at PropertyCashin, told us that in her experience, 'the best ROI for home improvements are modest backyard landscaping ideas. The average ROI for landscaping upgrades is 100 per cent.'

What is meant by modest? Simply landscaping updates that are easy to maintain and won't require your buyer to do lots of gardening. Think a general tidy-up, a few low-maintenance plants, and a neat driveway. Deb adds that as a minimum you can
'mow the lawn, pick up the twigs, trim the hedges, weed the flower beds and put down some fresh mulch.' 

Home improvements and ROI: what not to do

When is a home improvement not going to give you a good ROI? Glen recommends thinking sensibly about the ratio of your projected spend and the value of your home – 'If your house is worth $250,000, then doing a $200,000 kitchen remodel is a surefire way to lose money. A good rule of thumb is to spend 10 percent of your home’s value to remodel a kitchen, and 5 percent to remodel a master bathroom.'

Glen also cautions against adding swimming pools unless you are 'prepared to lose money. A concrete pool could cost $100-200k but it may add $10k to the value.'

Finally, what is considered desirable by buyers is always relative and depends on what the general expectations are in your neighborhood. Glen points out that 'adding luxury updates to a home in an area that isn’t considered a luxurious area is another way to lose money. Be mindful of recent sales in your neighborhood, and when in doubt, consult with a local realtor before starting your project.'

Donald Olhausen Jr, Owner of We Buy Houses in San Diego, also urges buyers to put any planned home improvements in context: 'It's easy to say, upgrade the kitchen and bathroom. Although ordinarily true, this will be utterly dependent on what condition your house is already in and what finishes are selling in your neighborhood.'

Do your research, figure out what sells well where you live, and go from there.

Anna Cottrell

Anna Cottrell is Consumer Editor across Future Plc Home titles. She has a background in academic research and is the author of London Writing of the 1930s. She writes about interior design, property, and gardening.