However, the ROI of a bathroom renovation often follows the same pattern as kitchen renovations. In terms of return on investment, exterior renovations are the ones that rule and have done so for the past 30 years, according to the Remodeling report. In fact, four of the top five jobs with an ROI greater than 100 percent are outdoor improvements. However, in 2024, these trends have changed.
Renovations have become more important for homeowners looking to improve their living conditions without the need to buy a new home and risk higher interest rates. In a HomeLight survey, 49% of leading agents say that homeowners who disagree are renovating key rooms, such as kitchen and bathroom remodels, while waiting for interest rates to fall. In 2024, the average return on the most common remodeling projects in the United States was about 75% nationally, according to the 2024 Cost and Value of Remodeling Report, an evaluation of typical home remodeling projects. Value Report found that you can often get the best ROI from the renovations that buyers see before they walk in the front door. Replacing the garage door, updating the siding or adding a terrace, for example, can lead to a higher ROI.
Karin Provencher, one of the leading real estate agencies in Manchester, New Hampshire, says that new coatings or moldings usually add between 5% and 10% of value because they change the look of the house. If you have an unfinished basement, adding flooring, drywall, and other details to turn it into a living space has a potential ROI of 86% when converting it into a living room or a “special room” that buyers will love. While outer space will not reach the same price in 2024 as it has in recent years, 31% of the agents surveyed told HomeLight that larger or improved outdoor or landscaped spaces will continue to be a great selling point for buyers this year. Homeowners in certain parts of the country can increase their home value by up to 7% if they add a pool, according to Bankrate.
Adding a pool can make financial sense if you live in an area with a warmer climate, such as Florida or California, or in a neighborhood where most other homes have pools. The renovation project with the highest potential ROI? Hardwood floor finish, according to ProFloors and Cabinets. You can recover between 70 and 150% of the costs of this project. When you're considering which home improvements add the most value, choose kitchen cabinets, countertops, and floors in classic or neutral colors and styles.
These can appeal to the largest number of potential buyers. For example, if you want the purple walls in your kitchen to match the purple grout in the chimney, it's okay if you plan to stay in the house for the rest of your life. But don't expect others to like your unique choices equally. Take a look at the top 10 national averages below.
To view the full report, click here, which also details ROIs by region (such as the Pacific or the Mountains). This is a relatively simple job for a contractor, can be completed in one day and significantly improves the curb appeal of your home. An improved home well above other nearby homes may still receive the same level of interest compared to others that are being marketed, but it's unlikely that you'll earn a much higher than average premium simply for additional improvements. The return on investment offered by home improvements can vary significantly, from more than 100 percent to just 20 percent, depending on the specific type of project you undertake. It's also a good idea to make sure that the improvements you make are consistent with those to the rest of your home.
The interest on a home equity loan may be tax deductible, but only if the improvements are substantial and meet IRS requirements. Paying for home improvements with savings is always an option, and in fact, most renovators do, according to 2024 U.One mistake homeowners often make is to improve their homes well above the average of neighboring homes. In general, you're less likely to fully recover your investment in a major kitchen or bathroom remodel than you are to recover what you spend on basic home infrastructure improvements, such as a roof, garage door, exterior siding, or new windows. In the case of home equity loans, the proceeds of the loan must be used to purchase, build, or substantially improve the home.
While some of the best home improvements (a renovated kitchen, a new deck, or a remodeled bathroom) can be expensive, they can also increase the value of your home when it comes to selling or refinancing it.
