The 4 Best Home Renovations for Long-Term Value (and the Worst)
Written by
Martin Dasko
Edited by
Amen Oyiboke
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Based on the most recent data from Realtor.com, the number of homes available for sale grew by 24.6%, with properties spending 73 days on the market, making it the slowest January since 2020. While the median price of homes available for sale in January was down 2.2% to $400,500, more small places are listed this year.
If you’re considering selling your home in the future or want to improve its listing price, there are a few renovations you’ll want to consider and a few upgrades you’ll want to avoid.
We will share the best home renovations for the long term and the worst for resale value.
The Best Home Renovations for Long-Term ROIs
Kitchen Renovations
“Minor upgrades, such as updating cabinets, countertops, and appliances, can yield some of the highest returns on your investment,” said Shaka Walker, a real estate advisor at Engel & Völkers Atlanta. “Buyers prioritize functionality, open layouts, and durable materials. Upscale renovations yield a lower return, so concentrate on midrange selections.”
The kitchen is a focal point for buyers if you plan on investing in your home to sell it for a much higher price in the future. Based on data compiled by HomeGuide, a basic kitchen upgrade can cost anywhere from $6,000 to $25,000, depending on what you’re looking for. The Journal of Light Construction found that 96% of the costs of a minor kitchen upgrade were recouped when it came time to sell.
Bathroom Renovation
Bathroom renovations can be an impactful upgrade to increase home value since potential buyers look out for this, and modernizing this space will enhance the visual appeal of your property. Walker suggested that you focus on replacing bathtubs and showers, retiling, upgrading vanities, and improving lighting. The good news is that even minor changes like painting or updating fixtures can increase your home’s appeal for minimum costs.
A report from Clever Real Estate found that 33% of buyers considered a remodeled bathroom one of the most desirable home improvements. Angi estimates that a bathroom remodeling project costs $12,116, depending on the materials and layout.
Finishing Basements
Walked pointed out that a finished basement can increase livable space and functionality. This investment could also help buyers looking for separate guest quarters since a finished basement could be turned into a rental income property. Based on the 2022 Remodeling Impact Report from the National Association of Realtors (NAR), a basement conversion to a living space was one of the top remodeling projects regarding return on investment, with 86% of the costs recovering when it was time to sell.
Upgrading Flooring and Baseboards
Andrew Fortune, realtor and brokerage owner at Great Colorado Homes shared that you can take the dated look out of your home by replacing a few key items. Fortune added, “Old baseboards tend to have a lot of grooves in them to look fancy, but they usually just collect dust and look dirty after a few years. New baseboards tend to have simple designs and make the home look cleaner. ” If the homes around you look older, this simple upgrade can significantly impact the value of your property.
You may also want to consider new flooring to enhance the aesthetics of your home. Walker mentioned buyers favor modern, low-maintenance options like hardwood and luxury vinyl. Hardwood appeals to many buyers as it can be refinished over time. Luxury vinyl tile can last up to 20-30 years, thanks to being very durable and water resistant. The NAR remodeling report found that a hardwood flooring refinish was the best project, with a 147% cost recovery rate when it came time to sell.
The Four Worst Home Renovations for Long-Term ROI
Unnecessary Conversions
Walker noted that unnecessary conversions can hurt a home’s value in the long run because transforming bedrooms into gyms or another space reduces a home’s appeal, as buyers prioritize the number of bedrooms. Another conversion that could hurt your long-term value is turning a garage into any other type of space since buyers may want this for security.
Over Personalization
“Highly specific or niche designs and customized features can create visual barriers for buyers who prefer neutral, versatile spaces,” said Walker. Personalized upgrades like bold wallpaper, custom built-in furniture, or high-end kitchen finishes can be a poor investment if you’re looking to maximize your returns in the future.
Fortune elaborated, “Exotic kitchen remodels can also be a waste of money. The ‘waterfall’ style islands are no longer a fad and are very expensive.” While certain kitchen upgrades can go a long way, you don’t want to get carried away with this space.
Swimming Pools
“With high maintenance costs and limited use in colder weather, swimming pools yield on the lower end of returns,” shared Walker. The harsh reality is that many buyers won’t even look at a home with a pool due to the expenses associated with maintaining it.
Solar Panels
“When we sell homes with solar panels, they do not add any value and can actually lower the value of the home if they’re old enough,” said Fortune. While some people have transitioned to solar energy, many homebuyers may not prefer this feature in a home.
As always, we recommend you speak with a local realtor or real estate expert to determine what types of renovations are in demand based on your location. You want to ensure that you’re not spending significant money on renovations that could hurt your home’s value.
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