What Home Improvements Add the Most Value?

Mar 28, 2024 6 min read

You’re ready to make some improvements to your home, but you know home improvement projects can be expensive. You want to get the most out of your upcoming renovation, but how do you know what home upgrades add value? These tips can help you make sure your renovation adds value to your home without blowing your budget.

Remember, when considering what upgrades increase home value, you typically won’t get back your entire investment with most home improvements. However, you’ll get to enjoy the improved function and experience of your new fixtures and features for as long as you live in your home. And you often make back a lot of the money when you sell, depending on the type of renovation, how long ago you made the upgrades and how the real estate market in your area is performing.

If you’re wondering how to increase the value of your home before you put it on the market, it’s a good idea to talk to a local real estate professional. They can walk through your house and identify places where your money might be well spent, as well as places where it might not be worth the expense and effort to make changes.

Home Improvements That Add Value

Kitchen Improvements

If adding value to your home is your goal, your kitchen is an excellent place to start. Kitchens are often at the top of the list of rooms that sell houses. How much will a new kitchen increase the value of your home? According to Zillow, kitchen renovations provide up to 80% return on investment. Depending on how you choose to renovate, you could get more or less back from this investment. 

Full-Scale Kitchen Remodel

A major, upscale kitchen remodel may cost more than $150,000 and return 41.8%, according to Remodeling, a blog about construction. This type of remodel includes new appliances, cabinets and countertops. Many home buyers will pay more for professional grade, energy-efficient, stainless-steel appliances, top-end cabinetry and marble or quartz countertops. 

Your dollars are best spent on things that improve the flow of the kitchen and make cooking easier and more enjoyable. When making improvements, make sure you maintain or add to the amount of storage or counter space. You don’t want to take away from these key areas. 

Budget Kitchen Makeover

According to Remodeling, a minor kitchen upgrade can cost almost $27,000 and return 85.7%. You can give your kitchen a facelift with updated backsplashes, sinks and fixtures. Consider adding touches with broader appeal, like subway tiles, to provide a clean, modern look. If your cabinets are functional, you can replace the fronts. Add a coat of paint and replace the hardware for a more cost-effective way to freshen their appearance. 

Whether you’re doing a complete overhaul or a streamlined refresh, keep the style, size and quality of your kitchen in line with the rest of the home. Many home buyers won’t pay more for a house with a deluxe kitchen if it seems out of place with the other rooms. 

Bathroom Improvements

Updated bathrooms are key for adding value to your home. When designing a bathroom, keep in mind how many people will use the space on a daily basis. Often, if your home only has one bathroom and multiple bedrooms, adding an additional bathroom to the layout can add value to your home and provide a 51% return on investment, according to This Old House

Adding another bathroom to your home can cost from $6,000 to $76,000 or more. An upgrade like adding a half-bath to an area that already has plumbing, like a laundry room, can be relatively inexpensive. Including an upscale full bath as part of an addition can cost a lot more.

Full-Scale Bathroom Remodel

According to Remodeling, an upscale bathroom overhaul returns 36.7% on the investment. If you have the space (and the budget), many home buyers prefer a design with a separate tub and shower. Walk-in showers are a nice upgrade if your home has the space to accommodate both. 

Most buyers appreciate a consistent design between the kitchen and bathrooms — using the same materials for countertops, flooring and fixtures can help create a cohesive feel. Installing heated floors in the bathroom is an unexpected luxury buyers appreciate.

Budget Bathroom Makeover

You can expect around 66.7% ROI on a midrange bathroom remodel, according to Remodeling. That might include new fixtures, faucets and medicine cabinet and a solid-surface countertop with an integrated sink.

If you want to make a big impact, consider incorporating tiles for a clean, timeless and cost-effective design. You can save a lot of money on fixtures by carefully shopping big box home improvement retailers. 

Many buyers like clean lines and shaker-style cabinets in bathroom spaces. Choosing granite and quartz countertops can also help add value to your home, and higher-end countertops like these can be affordable if you don’t need a lot of square feet. Skip darker paint colors in favor of something lighter. If you’re not replacing the cabinets, consider painting them white or off-white to complete the transformation. 

Lighting Improvements

Windows and light fixtures often last a long time, and it’s easy to get used to their appearance, even if they’re dated. However, buyers see them with fresh eyes. They may be looking for modern finishes throughout a home and pay special attention to light fixtures and lighting. Buyers want homes that are bright with natural light. 

Window Replacement

When thinking about lighting, many buyers will tell you that natural light is best. They’re looking for high-quality, energy-efficient windows that let a lot of light in. You can expect a return of 61.2% to 68.5% on replacement windows.

If you are installing new windows, look for those with double-paned glass, ideally with Low-E coatings that reflect heat into the room in the winter and outdoors in the summer. Make sure you understand Energy Performance Ratings before investing in new windows. 

Light Fixture Updates

If new windows aren’t in the budget, you can create the appearance of a lighter, brighter room with the help of new light fixtures. Updated fixtures can have a low cost but provide a big impact. Something as simple as light bulbs can make a difference, too. Bright white or daylight bulbs are much brighter, whereas soft white or warm white-emitting bulbs have a more subtle, muted tone. 

Of course, if you’re preparing your home for sale, be sure to replace any light bulbs that are burned out, and make sure to match all of the bulbs in a set, like those over a bathroom vanity or in an overhead light fixture. That helps your home look bright and feel well-maintained, even if you aren’t upgrading fixtures.

Energy Efficiency Improvements

From insulation to electricity, some of the biggest home improvements that add value are not always visible. Improving your home’s energy efficiency is important to buyers and can save you money. 

According to Realtor.com, these energy-saving improvements give you the best ROI:

  • Attic insulation
  • Energy-efficient windows
  • New doors
  • Solar panels
  • Programmable thermostat

Keep in mind there are a lot of materials on the market that claim to be “green” or promote energy efficiency. But buyers beware — many green products don’t meet minimum energy efficiency standards. 

Look for the ENERGY STAR logo, read about the product’s sustainability ratings when purchasing and search for rebates on qualifying purchases. In addition, the Inflation Reduction Act has provisions that could provide rebates on energy-efficient home improvements. If you’re hiring a contractor to help with your home improvement projects, consider working with a LEED-certified contractor to ensure they follow green building standards. 

Major Efficiency Updates

When looking to add value to your home, invest in the essentials, like updated HVAC systems, insulation and updated electric panels. Incorporating renewable energy elements like geothermal heating, solar panels and wind energy may appeal to energy-conscious buyers. 

Small Efficiency Improvements

Water heaters are expected to last eight to 12 years. When you prepare to update, consider a tankless water heater, as they add greater value to your home. Adding insulation is another great use of renovation money. Energy companies may provide rebates and incentives for making your home more energy efficient. 

Curb Appeal Improvements

Your home’s exterior is the first thing potential buyers will see. Fortunately, you don’t need to spend a fortune on the outside to make a good impression. Consider where your home is located and how buyers can use the space. Does your neighborhood have lush, green lawns as far as the eye can see? Do drought-tolerant plants make sense? Do you have a spot for the barbecue grill? Yes, it is possible to improve curb appeal on a budget.

Elevated Outdoor Living

Decks and outdoor living spaces can have a big impact on home values. Your outdoor living space is an extension of your home and provides a lot of room for creativity. Consider adding fire pits, bar areas, gathering spaces and weather-resistant seating options to make the space more inviting and usable. Keep it consistent with the design of the inside of your house. 

Are you thinking about adding a pool? If it’s something you and your family will enjoy, go right ahead. But don’t expect it to add value to your home. In most locations, adding a pool doesn’t make financial sense. Buyers are often turned off by the maintenance and insurance risks associated with having a pool in their yard.

Tidy Outdoor Spaces

Improving outdoor spaces doesn’t mean you have to add an expensive deck or patio. Planting weather-tolerant plants at strategic places around the yard and regularly mowing your lawn will give a clean and well-kept appearance. Take care of the beds with regular weeding. If you have exterior lights, keep them in good working order, and stay ahead of snow shoveling in the winter. 

Make Sure Your Coverage Keeps Up With Your Property Value

If you are renovating your home, making a few improvements can go a long way in adding to its value. Be sure to contact your Farm Bureau agent to ensure you’re covered for the value of the new renovations.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.