Which Home Projects Have the Highest Return on Investment?

Dated: 05/10/2019

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Which home improvement projects reap the greatest reward given limited time and money? Your best bet – once the curb appeal projects are done, tackle the bathrooms.

The typical seller has 13 years' worth of wear and tear on their home, and that can make it tough to know where to start. Sellers average 2.2 renovations or improvements to prepare to sell their home, with 79 percent making at least onei. And for good reason -- nearly a quarter of sellers who make improvements sell above list price, compared with 16 percent of sellers who don't.

The key is making smart decisions about what to upgrade, 

A good rule of thumb: A smaller, inexpensive upgrade typically brings a bigger reward than a more involved and time-consuming one.

  • Dive into the "curb appeal" projects first, and do them smartly -- New paint inside and out and basic landscaping and yard care typically runs about $3,000, according to recent research by Zillow and Thumbtack, and are typically the most common and necessary improvements. And choosing the right eye-catching colors can increase a home's value far beyond just the appeal of new paint. A recent Zillow analysis found that yellow homes sell for nearly $3,500 less than expected, while the right color door can lead to an extra $6,000 in a seller's pocket.
  • Upgrade the bathrooms (but not too much) -- A mid-range bathroom remodel -- replacing the toilet, tub and light fixtures, adding a double sink, tiling the floor and hanging some wallpaper -- typically results in a $1.71 increase in home value for every dollar spent, if the bathroom is at least 25 years old. But an upscale bathroom remodel -- top-end features, full-body-wash shower wall, bidet -- will actually cost a seller, adding 87 cents of home value for every dollar spentii.
  • Install new windows -- New mid-range windows can return $1.15 for every dollar, but get too fancy and you'll end up breaking even.
  • Pay attention to current design trends -- Warm modernism and organic accents are in, bold colors and an overtly rustic feel are out. The right design can show buyers the potential in your home.

And some important "Don'ts":

  • Focus on the kitchen -- Kitchen renovations, at any level, are among the worst return on investment of the home improvements we studied, at about 50 cents on the dollar. Part of the reason is that the kitchen is one of the few rooms in a house where different people want different utility. You could spend $30,000 renovating a kitchen only to turn off some potential buyers who would have done it differently.
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Susy Thomas

Susy grew up in Detroit, graduated from Michigan State University. She has lived in San Diego for over 35 years. While working as a purchasing manager in the restaurant business she was offered the o....

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