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Renovation ROI

I have had more conversations about renovating vs buying or selling recently than ever before. However, it’s very important to think about the return on investment of any renovation unless you are doing it for self-satisfaction. Having been in the building industry, I have a real understanding of costs and the plus/minuses with remodeling. Below is an article that I copied entirely because it was pretty good and captured a lot of information. Read on to help better understand the return of specific project types. Not all have a high return, but might simply make you happy and your home more livable while you still own it. These numbers do not translate perfectly for California since everything is a bit more expensive, but the return average is comparable.

Home renovations that add the most value

The home renovations that add the most value in the current market include refreshing the exterior and landscaping, updating kitchens and baths, and improving home energy efficiency. The best home renovations strike a balance between improving comfort, appealing to future buyers, and providing the highest return on investment (ROI).

Tara Farmer, HomeGuide 2025

Renovations that increase home value

Exterior Renovations that Add Value

Enhancing your home's exterior is one of the most impactful and cost-effective ways to boost its value. Curb appeal projects often yield impressive returns on investment (ROI), sometimes more than 100 percent.

New landscaping

Thoughtful landscaping has the power to increase perceived home value by up to 15% in some cases. A professionally designed outdoor oasis with features that best fit your property and neighborhood often pays for itself with a 95% to 100%+ return on investment.

  • A new or upgraded landscaping installation costs $3,000 to $16,000 or $4 to $12 per square foot, depending on the size and features.
  • A landscape designer near you can advise on the current and timeless outdoor trends and help plan the details of your exterior renovation project.

Stylish Cape-style house with professional landscaping

Garage door replacement

While it may seem unimportant, a new garage door can transform your home's façade while recouping all or nearly all the project costs through increased property value. In 2023, garage door replacement had the number two spot for home improvement projects with the highest ROI.

A new garage door costs $1,000 to $3,500 on average for a 2-car garage door and installation.

Replacing a garage door requires specialized tools and skills. Hire a qualified garage door installer near you to ensure your new door is installed correctly.

Front door replacement

The front entry is one of the first things potential buyers notice. Installing a stylish new front door signals a well-maintained home and can yield returns up to 100%+ of project costs. Steel front doors tend to have the highest ROI in today's market.

Bigger isn't always better. Renovating your front entry to include high-end double doors and sidelights also adds to your home value, but you'll likely only recoup about half the cost.

New siding

Old, worn siding can detract from your home's appearance and value. Installing new siding in a contemporary material like vinyl or fiber cement can breathe new life into your property and offer the best ROI.

  • New siding installation costs $10,000 to $32,500 total on average for a 2,500-square-foot home.
  • Updating just the front of your house with manufactured stone veneer costs $2,000 to $9,000 with installation and may increase your home value by more than the project cost.

Contact an experienced siding contractor near you to determine the best siding for your home and location.

New roof

An aging, worn roof can be an eyesore that deters buyers. A new roof enhances protection from the elements while elevating curb appeal—a smart investment that recoups a significant portion of costs.

  • An asphalt shingle roof costs $5,700 to $12,000 to replace and typically offers the best ROI.
  • A new metal roof costs $7,500 to $40,000 for the materials and labor. Although the ROI tends to be lower, a metal roof lasts decades longer than an asphalt shingle roof and usually adds more to your home value.

Schedule an in-person estimate with a reputable roof replacement contractor near you to discuss your options and costs.

Interior renovations that add value

While interior renovations often come with higher upfront costs, they can have a substantial impact on a home's resale value. Working with a local real estate agent can help you determine which interior updates are most likely to appeal to buyers in your market.

Kitchen renovation

A newly renovated kitchen can significantly increase your property's resale value. Minor kitchen remodels, which typically include updating countertops, cabinets, flooring, appliances, and finishes, offer some of the highest ROIs, often exceeding 85%.

Most minor kitchen renovations cost $4,000 to $18,000 for labor and materials. A major kitchen remodel can often reach $70,000+, and while your home value may increase more than with a minor update, the potential return on investment decreases.

If you're thinking of renovating the kitchen to sell your home at a higher price in the near future, consult a local realtor first to confirm the best upgrades for your local market. Then hire a qualified kitchen remodeling company near you to get started.

Bathroom renovation

Like kitchens, refreshed bathrooms are a huge selling feature. A midrange bathroom renovation that updates the surfaces and fixtures while leaving the structural layout the same can return over 65% of project costs through increased home value. An upscale remodel may give the home's value a bigger boost but with a lower ROI.

Midrange bathroom renovation cost by size

Bathroom size

Average cost

Small bathroom renovation cost

$2,500 – $10,000

Standard-sized bathroom renovation

$5,500 – $15,000

Primary bathroom renovation cost

$10,000 – $30,000

Reach out to a reputable bathroom remodeler near you to discuss which updates are likely to have the most positive impact on your space and budget.

Bathroom remodel with a new soaking tub, tiled walk-in shower, and glass shower wall panels

Energy-efficiency improvements that add value

As eco-consciousness grows, energy-efficient upgrades are in high demand and can make your property more valuable. Some renovations that lower energy costs, make the home more comfortable, and have the best return on investment include:

HVAC conversion

Replacing old fossil fuel systems with new electric heat pumps can slash utility costs and attract environmentally-minded buyers. Converting to a ductless mini-split heat pump costs $2,500 to $15,000+ total or $2,500 to $6,000 per zone. Many electrification projects like this yielded over 100% ROI in 2023.

The best and most efficient heating and cooling system for your home depends on many variables. Talk to an experienced HVAC professional near you about your options, costs, and potential ROIs.

Window replacement

New energy-efficient windows insulate better, reduce drafts, and boost aesthetics—returning over 60% of costs through higher home resale value. Window replacement costs $200 to $1,500 per window installed for vinyl. Wood windows cost $800 to $3,800 per window with installation.

Replacing windows requires a skilled professional. Hire a reputable window installer near you to ensure the job is done correctly and results in a more energy-efficient home.

Solar panels

Solar panels boost home value by 1% to 2% in most cases and let you advertise low utility bills. In some areas, homes with solar panels sell up to 15% faster than homes without them. However, with a 6- to 10-year average payback period, going solar is best if you plan to stay in your home for a while.

Review our detailed guide on tax credits for energy-efficient home improvements to ensure you're maximizing your potential savings.

Cheap home renovations that add value

Cleaning and minor cosmetic updates can give your home a new, refreshed feel on a budget and still increase its perceived value. Consider these affordable home improvements to freshen up your space:

  • Cleaning up the yard
  • Pressure-washing or painting the exterior
  • Painting the home's interior
  • Refinishing cabinets and floors
  • Replacing cabinet hardware
  • Replacing old appliances one at a time

A living room with a painted accent wall.

Home renovation FAQs

Are home renovations tax-deductible?

In most cases, the cost of home improvements is not tax-deductible. However, certain energy efficiency projects, like solar panel installation, may qualify for tax credits. Check for federal, state, and local incentives before starting your renovation project.

Which renovations add the most value to a home?

Exterior projects that enhance curb appeal, such as new siding, doors, and landscaping, offer some of the best returns on investment. Interior renovations to the kitchen and bathrooms, energy-efficient upgrades, and renovations that increase the living space can also make a home more comfortable and add significant value.

What adds more value – renovating or adding square footage?

Home additions usually cost more than renovations up front, so the added value may be higher, but the return on the investment is typically lower than the ROI on a renovation.

  • A remodel that finishes an existing space, like a basement or garage, adds to your home's livable square footage and typically has a better ROI than a full addition.
  • Consider installing a closet in a bonus room so the room can be considered another bedroom. A 3-bedroom house is more desirable than a 2-bedroom in most markets, and that extra demand often translates to a higher sale price.

How do I choose renovations with the best resale value?

For the best resale value, focus on renovations that address common buyer must-haves. While every market varies, most potential home buyers prefer updated kitchens and bathrooms, an attractive exterior, and energy-efficient homes.

Knowing your home's current value and the typical price range for comparably sized homes in your neighborhood can also help to create a realistic budget for home improvements.

Getting estimates from home renovation companies

Before hiring a home renovation contractor near you, be sure to:

  • Research your local market to find out which renovation projects address common buyer demands.
  • Obtain at least three quotes and vet contractors thoroughly.
  • Read renovation company reviews on HomeGuide and Google.
  • Hire contractors who specialize in the type of renovation you're considering.
  • Ask about warranties and if they guarantee their work.
  • Get a written contract with an itemized breakdown before the work starts.
  • Don't pay in full until the job is complete and the project has passed any required inspections.

Questions to ask a renovation contractor

Ask the following questions to help you select the best renovation contractor for your vision and budget:

  • Are you licensed, insured, and bonded for this type of project?
  • How many projects like this have you completed in this area?
  • Can you provide references from recent clients?
  • Do you have a portfolio of previous projects I can review?
  • What materials and timeline would you anticipate for my project?
  • How do you handle any unexpected repairs that arise during the work?
  • What warranty do you provide on workmanship and materials?

Work With Susan

I empower buyers and sellers to understand the value and potential of a property and position them to realize the best return on their investment.
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