Thinking about installing a new deck, replacing a front door, or even adding an extra bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value with some upgrades.
But as you probably guessed, not all remodeling projects provide the same return on investment (ROI).
Using Remodeling Magazine’s Cost vs. Value 2023 report, which compares the average cost of 23 remodeling projects in 150 housing markets, let’s look at some of the most popular home improvements based on estimated ROI, time commitment, and cost.
Things to Consider Before Starting a Home Improvement Project
It’s important to note that national averages only tell part of the story. Labor and supply costs, styles, and consumer preferences can vary by location. So before you dive into a project, you might want to consider hiring a contractor, real estate agent, or an appraiser to come to your house and give an opinion on which upgrades might provide the most value based on where you live.
You may also want to factor in any immediate needs that a remodeling project might help satisfy. Let’s say, for instance, you’d like to add an extra bathroom. While you may only recoup part of your expenses, having an additional washroom may be worth the cost of a renovation.
Top Home Improvement Projects to Help Increase Your Home Value
Looking to prioritize your wish list? These remodeling projects earned top spots on the Cost vs. Value report.
HVAC Conversion/Electrification
Average Cost: $17,747
Resale Value: $18,366
Costs Recouped: 103.5%
General Time Commitment: Anywhere from 1-2 days up to several days, depending on whether your home requires structural changes
Replacing a fossil fuel-burning HVAC system with one that runs on electricity isn’t cheap. Nor is it one to try to DIY. But according to the Cost vs. Value report, you could stand to get back what you put in — and maybe even a little extra. Homeowners who decide to make the conversion may also notice a savings in their heating and cooling bills. And there are environmental benefits to consider as well.
Unless you’re a licensed HVAC technician, this is a project best suited for the professionals. Consider speaking with a few different HVAC installation teams to compare potential systems and cost options.
Garage Door Replacement
Average Cost: $4,302
Resale Value: $4,418
Costs Recouped: 102.7%
General Time Commitment: A few days
Removing an old garage door and replacing it with an attractive, sturdy new one could return every dollar of your initial investment, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.
With an average cost of $4,302, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most homeowners would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend) over the course of a weekend.
If you hire someone to install the door for you, they will likely come to your home twice: first, to take measurements and give you a quote, and then again to install the door.
Manufactured Stone Veneer
Average Cost: $10,925
Resale Value: $11,177
Cost Recouped: 102.3%
General Time Commitment: One month
Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 102.3% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.
Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you choose to hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month or longer.
Entry Door Replacement (steel)
Average Cost: $2,214
Resale Value: $2,235
Cost Recouped: 100.9%
General Time Commitment: One week
A new, safe front door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.
Even better, you and a friend can probably handle installation on your own, though you can certainly hire an installation expert. If you decide to go the pro route, they’ll likely need to come to your home to take initial measurements and then return for the installation. Another option is to measure and order the door yourself and just get help with the installation.
Recommended: 32 Inexpensive Ways to Refresh Your Home
Minor Kitchen Remodel (Midrange)
Average Cost: $26,790
Resale Value: $22,963
Cost Recouped: 85.7%
General Time Commitment: Four to eight months
When it comes to kitchen remodels, less may be more, at least when it comes to ROI. According to the Cost vs. Value report, major kitchen remodels recoup anywhere from 31.7% to 41.8% of costs. Meanwhile, a smaller upgrade recoups nearly 86% of costs.
What does a minor remodel include? Think faster-turnaround jobs like installing a new sink and faucet or replacing items like cabinet fronts, cooktop, oven range, refrigerator with new models, countertops, or floors.
When creating your budget, you’ll probably want to factor in the cost of expert help, such as an electrician, plumber, and contractor. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a remodel.
Wood Deck Addition
Average Cost: $17,051
Resale Value: $8,553
Cost Recouped: 50.2%
General Time Commitment: Three to six months
Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup half of what you spend. And ideally, you’ll get the chance to enjoy the deck before you sell your home.
A deck installation is a pretty large project. It will likely need to pass an inspection and adhere to your city’s building codes, and it could increase your property taxes and home insurance costs. So it pays to get the job done right the first time, which may mean enlisting the help of a designer or architect. These pros can map out an initial plan, and a contractor can handle the building.
An online home renovation cost calculator can help provide you with a rough idea of how much a wooden deck — and any other home upgrade project — could cost.
Remodeling Projects With the Lowest Potential ROI
While these upgrades may not deliver the biggest returns, they could still be worth exploring if they fit your budget and lifestyle needs.
Primary Bedroom or Bathroom Addition
Average Cost: $157,855 for midrange; $325,504 for upscale
Resale Value: $47,343 for midrange; $73,875 for upscale
Cost Recouped: 30.0% for midrange; 22.7% for upscale
General Time Commitment: Four to eight months
Adding on a primary bedroom or bathroom may enhance your living experience, but it might not add much to your bottom line. Despite the project’s hefty financial and time commitment, it generally fails to deliver even one-third of the investment.
However, while not a great return, a home addition project of this size could change to the value of your home. For example, a $300,000 home that adds a primary suite for $157,855 could potentially return about $47,000 on the investment. A home that sells for $347,000 instead of $300,000 is a 15.6% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.
Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors.
Recommended: Homebuyer’s Guide
Bathroom Addition
Average Cost: $57,090 for midrange; $104,733 for upscale
Resale Value: $17,237 for midrange; $27,830 for upscale
Cost Recouped: 30.2% for midrange; 26.6% for upscale
General Time Commitment: Four to eight months
A bathroom remodel tends to be cheaper than a primary bathroom addition, and it generally sees a slightly better potential ROI. But again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it. And that’s a calculation that only you and your family can make.
Making it Happen
Home renovation shows make upgrades look quick and easy. And while sometimes they can be, in many cases, renovations can be costly and time-consuming. As you consider which ones to make, you will likely want to factor in your return on investment (ROI).
Not all remodeling projects provide the same level of ROI. Projects such as replacing a garage door or adding a stone veneer to your home’s façade tend to see better ROI than adding an extra primary bedroom or bathroom. But ROI is only one consideration. You should also need to consider what you want to get out of your home and whether the time and cost of taking on a big project are worth it.
If you decide you’re ready to roll up your sleeves and get some home repairs or renovations done, see what a SoFi personal loan can offer. With a SoFi Home Improvement Loan, you can borrow between $5k to $100K as an unsecured personal loan, meaning you don’t use your home as collateral and no appraisal is required. You can use the funding however you like, our rates are competitive, and the whole process is easy and speedy.
Turn your home into your dream house with a SoFi Home Improvement Loan.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPL0623003
