It’s not unusual to debate giving your home a refresh before you sell it. However, the spectrum of renovation projects and home improvements is vast. Some people might upgrade their kitchen appliances with standard new ones and call it a day, while others might embark on a full kitchen remodel with luxury everything. So that bears the question: Which of those projects is a better idea than the other? We asked a home renovation expert to help us to determine which improvements truly boost property value. Read on to see some popular home upgrades and how they rank by return on investment.
The Nitty Gritty: “Basements are, at the end of the day, still a hole in the ground,” says Kate Ziegler, a realtor with Coldwell Banker Lifestyles in New London, New Hampshire, and Arborview Realty in Boston. “The cost of a basement remodel will depend greatly on the type.” For instance, is it a stone foundation or poured concrete? Will waterproofing it be hard? If you’re just updating a ’70s-era basement with a shag rug, the cost will be less and the ROI higher, Ziegler says. But if you’re finishing it for the first time—one of those serious renovation projects—that will seriously cut into your ROI.
The Bottom Line: Basements are best left as basements, says Ziegler, who estimates that in most cases finishing a basement returns less than 50 cents on the dollar.
The Nitty Gritty: When it comes to kitchen renovations, sometimes the best bets are the most universal ones. Splurging on fancy kitchen features can sometimes be a risk due to the constant change in trends. “Even the most neutral, functional bathroom or kitchen renovation will show its age in the style of fixtures and appliances, let alone tile,” Ziegler notes. If you’re renovating for yourself, feel free to make it your own. But if you’re more focused on ROI, stick to a more modest, neutral renovation. “You will be more likely to get a bit more value than you spent on the work.”
The Bottom Line: “Splurging here, if you’re not going to enjoy the kitchen for yourself, is a risk because prospective buyers might not find your choices to their tastes,” Ziegler says.
The Nitty Gritty: Windows are expensive. In fact, the cost of windows has increased significantly in the last three years, Ziegler says. That said, it’s a project that can definitely pay off. “Home inspectors look closely at window function, and prospective buyers will value knowing they don’t need to worry about this major system for some time,” Ziegler explains. If you’re replacing existing windows, the cost might come down a bit; but if you’re replacing original wood windows, the cost can increase due to carpentry work needed. That said, your ROI will also increase, since most buyers worry about energy efficiency and maintenance of historic windows.
The Bottom Line: Give yourself $1,000 per window for a mid-range, brand-name window, Ziegler suggests. If you’re going more upscale, that price will increase. That said, assume you’ll get your money back.
The Nitty Gritty: In addition to the finishing of the new space itself, any exterior work will involve changes to everything from the roof and siding to the foundation, potentially. Also, your ROI will depend on the houses around you. “Is your square footage smaller than average currently? Adding space can have a higher ROI if you’re bringing your home in line with the neighborhood comps,” Ziegler says. If you’re already on the larger end of typical size for your area, adding more space might have value in terms of function for your family, but not in direct ROI.
The Bottom Line: Homes with a larger-than-average size tend to command a below-average price per square foot, Ziegler explains. “More space does not result in a directly correlated value increase, but that doesn’t mean it might not be worthwhile for your priorities!” she adds.
The Nitty Gritty: If you’re looking for a budget-friendly renovation, consider removing carpeting. “It’s relatively low cost—or DIY!—and if you know that hardwood exists under the carpet, it can be a terrific choice for high ROI,” Ziegler says. Even without hardwood floors underneath, a luxury vinyl tile can take you a long way in comparison to dingy old carpets.
The Bottom Line: Since most buyers replace carpets prior to moving in, taking care of the floors (e.g. removing carpet AND refinishing the wood or replacing carpet and advertising it as brand new) can be a weight off of buyers who want to move in quickly, Ziegler says.
The Nitty Gritty: A fresh coat of paint may seem like a small endeavor, but the payoffs are big. “If you have time, buyers might not love the colors, but they’ll appreciate a fresh coat of paint—that means they don’t have to paint before moving in,” Ziegler says.
The Bottom Line: Sometimes lower-cost improvements have an outsized impact as buyers evaluate their bottom line. “If your budget is tight and sale seems imminent, focus on repairs and maintenance over upgrades,” Ziegler says. Simply put, a property that is well-maintained might sell for less, but your ROI will be stronger too.
