Home improvement is a wide-ranging term. Literally speaking, it can (and does) refer to virtually any action you take to improve the quality of your home –– whether that means a paint job in the bathroom under the stairs, or the installation of a whole new roof.

Ultimately, home improvement can serve a handful of different purposes. If you’re a DIY type, you might appreciate home improvements simply as projects –– satisfying and productive tasks to complete at home. Naturally, you’ll also appreciate that a finished improvement can also make your home easier or more pleasant to live in. Above all else, however, is consideration for how home improvements add value to your property. While different changes impact the property in different ways, the bottom line is that they are all designed to improve appearance, boost functionality, add space, and/or address repair needs. Through these efforts, it is generally the case that a successful project can in fact increase resale value –– sometimes by thousands of dollars at a time. 

Below, we’ll look at how home improvements impact your property, which ones are most worth focusing on, and how you can effectively prioritize your spending on projects.

How Home Improvements Add Value To Your Property

As stated, different changes to your home will impact its value in different ways. However, there are a few primary purposes of the majority of home improvement projects that all stand to improve the property’s worth:

Improving Appearance – While visual appeal is somewhat subjective, an improvement that decidedly improves upon a home’s image can add value. Indeed it is for this reason that HGTV lists painting and kitchen revival (“take down the rooster wallpaper and paint it a neutral color,” the article recommends) as some of the most valuable improvements. The following are a few additional examples:

• Exterior paint job
• Planting trees/landscaping
• Clean or replace carpets or rugs
• Power washing

Boosting Functionality – This is another broad category, but it essentially refers to anything that makes your home more functional or efficient. Some changes in this category can be aimed at convenience and comfortable living; others may seek to address energy efficiency and sustainability. These examples can all add value to your home:

• Installing a kitchen island
• Investing in solar panels
• Installing energy-efficient windows
• Updating old appliances (such as refrigerators, water heaters, etc.)

Adding/Converting Space – Alongside the idea that home improvements add value to your property, consider also that home additions can significantly improve value. Exploring this very topic just a few years ago, Opendoor estimated that adding living space can add 5.3% to the average median home value. This can be done both via full additions, or by way of turning an unfinished space into a livable one. Here are a few examples:

• Finishing a basement
• Adding a bedroom/bathroom
• Constructing a guest house
• Converting a spare garage

Conducting Repairs and/or Updates – You can also add value to your home by addressing any updates that may be due, or repairs that may be required. Here, there is some overlap with the aforementioned notion of investing in new appliances. But there are also other jobs to consider, such as these:

• Replacing siding
• Filling or replacing cracks in wooden exteriors and/or driveways
• Replacing the roof
• Repairing wear and tear (small holes in walls, scratches from pets, etc.)

Home Improvements That Add The Most Value To Your Property

It’s easy –– and even somewhat exciting –– to think about how home improvements add value to your property and simply get to work. You may be tempted to throw money and effort at every project that occurs to you (within reason), acting on the notion that it’s all boosting value. This is an understandable impulse, but unfortunately not a very productive one. Because focusing on the wrong improvements –– those that are less efficient or add less value –– constitutes a bad investment.

Once you recognize this, the natural priority becomes figuring out how to identify the right improvements –– those that you can manage, and which will add sufficient value to your home to be worthwhile. To this end, here are some of the most commonly cited examples of improvements that add the most value to your property:

• Kitchen Remodeling – Remodeling your kitchen can involve anything from replacing old appliances, to building an island, to altering designs and cosmetics. Broadly speaking though, Credit Karma has estimated that a “midrange minor” remodel can offer a 72% ROI on an average investment of about $26,000. A “midrange major” remodel, meanwhile, offers about a 57% ROI on an average investment of about $75,000.
• Energy Updates – An energy update might mean replacing windows, modernizing your HVAC system, or these days even adding solar panels. These jobs range significantly in cost, but across the board they can add value. As an added bonus, they can also save you 10% or more on your energy bills while you’re still in the home. 
• Finishing Unfinished Spaces – Finishing unfinished spaces amounts to adding on to your property. The most common example involves finishing a basement (adding insulation, drywall, appliances, etc.). However, this concept can also apply to a bonus room, or even a large shed converted to a guest house.
• Roof Replacement – A new roof is considered very valuable on a home. Installation can easily cost more than $20,000, but the ROI on home value can come out to as much as 65% or more.

These are not the only examples. Some smaller options in particular (like replacing a garage door) can add small amounts of value at high ROI. But the four updates listed above are some of those that can add the most raw value to your property.

The Effect Of Roof Replacement On Property Value

Expanding on the final example listed above, roof replacement is considered to be a key investment in home improvement. This is because while a given kitchen upgrade or energy update may be more or less impactful than another, a new roof is regarded as a surefire way to increase property value. This is the case for four main reasons.

First, roof replacement will increase the curb appeal of your property. While it sounds simplistic to say so, the roof is one of the first things prospective buyers will see when they look at your home. A newly renovated roof will “pop,” so to speak, making the home look newer and more appealing.

Second, a new roof improves the structural integrity of your property. A brand new roof will be free of leaks or damage, and will also ensure that there are not pest-related issues compromising the home’s structure. It’s also important to note that these are not just functional benefits, but active selling points. The roof is generally included in the inspection process when someone seeks to buy a new home, and if there are structural issues, the home’s value will decrease (on the ground that the buyer will need to repair the roof). 

Third, replacing your roof will also make the property safer. This isn’t always the first thing that comes to mind, but the bottom line is that a new roof will stand up to damaging and potentially harmful elements (such as hail, falling trees, or fire from a lightning strike).

The fourth and final reason that this particular home improvement adds value to your property is that it improves long-term appeal. As stated, buyers will need to address repairs if you haven’t. On the other hand, if they see that the roof is new –– and documentation and warranties are passed along to them upon sale –– they will know that they won’t have to worry about the roof, potentially for a decade or more.

For all of these reasons, studies have indicated that roof replacement can yield 63% ROI on the property’s value, whereas some other popular projects (like bathroom remodeling) can return 50% of the initial investment or less.

What Home Improvements Don’t Add Value To Properties?

Despite all the positive examples discussed above, it’s important not to get carried away. That is to say, you shouldn’t confuse the idea that home improvements add value to your property with the notion that all home improvements add value to your property. As alluded to previously, there are some projects that –– while they can improve the home environment in one way or another –– do not offer enough ROI to be worth the investment (nor the time or effort involved).

The key is figuring out which projects are worthwhile and which ones aren’t, so that you can prioritize your time and investment accordingly. So, which home improvements don’t add value to your property, and why don’t they? Here are some important examples to keep in mind:

• Swimming Pools – While installing a pool can boost value, a thorough write-up at Bankrate stresses that it won’t necessarily. A pool is expensive to install, maintain, and insure, meaning that it’s difficult to recoup the value at sale.
• DIY Projects – This is a broad category. But it’s sometimes said that if you do too many DIY projects in your home, prospective buyers will be able to tell, and will wonder if your home has actually been properly, professionally maintained. A small DIY patch-up here and there is fine. But larger projects should be left to professionals.
• High-End Appliances – As stated previously, updating appliances (say, as part of a kitchen remodel) can help to add value to your property. However, splurging on extremely high-end appliances is not necessary. Buyers want to know that appliances are modern, in working order, and won’t need replacing; they don’t necessarily need the newest and best models, which will cost a great deal to install.
• Attic Conversion – An attic conversion can certainly add to the appeal and value of your home. However, it also tends to cost a great deal in the first place, which lowers the ROI. Fixing up an attic can cost $40,000 or more, and will seldom add that much to the resale value.
• Wine Cellar – A wine cellar is a popular idea as a home improvement, particularly in certain markets. Wine Guardian notes that buyers making $150,000 a year almost expect cellars in homes valued at $800,000 or more –– and will pay between $15,000 and $60,000 for the amenity. However, installation can cost even more (up to $80,000 in some cases). Furthermore, for buyers who don’t fit the parameters just mentioned, the value add is less.

Is Renovating Your Home The Best Way To Add Property Value?

Amongst all of the ideas and projects discussed above, many represent isolated repairs or upgrades. Others, however, come closer to being full renovations. But what exactly is a full renovation? How can it be done, and does it effectively add value to your home? These are important questions to ask yourself as you go about considering your options and prioritizing your investments.

While there is not a universal definition of a full renovation, the phrase typically describes a more comprehensive remodeling and redesign job. To give an example, remodeling a kitchen may involve replacing cabinets and countertops; redesigning it might mean new wallpaper or lighting fixtures. A full renovation, however, would entail remodeling, redesign, and appliance upgrades. For all intents and purposes, it describes breaking down and rebuilding a space in its entirety, with improvements.  

As to how you can go about a full renovation, you will –– in almost all cases –– need to consult with professionals. While there may be some small aspects of the job you can do on your own, remember our caution above, that too much DIY work tends to show (and not in an appealing way). Instead of tackling too much on your own, you’ll want to contact contractors and subcontractors in order to go over the renovation, estimate the cost, and ultimately have the work done. If the project involves a home addition or a change to the floorplan or layout of your home, you may need to consult an architect as well.

Broadly speaking, these types of home improvements add value to your property. For instance, a write-up at Portico estimates that a full kitchen renovation can add 10% to resale value. That might mean $25,000 on a $250,000 home –– excellent ROI even if the full renovation costs $15,000. The same article highlights full renovations to bathrooms being able to add up to 5% to resale value.

The simple fact is that full renovations upgrade your home with new appliances, visual appeal, and a sense of newness –– all of which buyers will pay for. Because these renovations are expensive however, it’s important to approach them with care and focus on projected ROI.

Avoiding Home Improvements That Can Potentially Bring The Property Value Down

We’ve discussed that some home improvements add value to your property, and others don’t (or do so to a lesser extent). But there are also some home improvements that have the potential to bring property value down. Naturally, it’s important that you identify improvements that can have this effect, so that you can avoid them accordingly. Fortunately, Homelight has done a nice job of gathering relevant examples within a broader piece on things that can hurt home value. The following are some to remember:

• DIY improvements done poorly
• Improvements that ignore building codes
• Shoddy workmanship by unreliable contractors
• Poor landscaping
• Deferred repairs (Note: It is not sufficient to defer repairs in the hopes of larger renovations, nor to tell prospective buyers that you’re planning to address things.)

In general, the idea of a home “improvement” bringing down the value sounds almost illogical. However, as these examples show, it is always important to ensure that your well-intentioned efforts to maintain your home are carried out effectively. Doing repairs on your own can result in work that’s poor when viewed by a professional eye. Trusting un-vetted contractors can bring about iffy workmanship. Blindly trusting a landscaper can result in a yard that, while technically maintained, is not necessarily appealing.

Avoid these issues, and you’ll further ensure that you can maximize your home’s value.

In Conclusion

The bottom line is that home improvements add value to your property –– so long as you approach them in a strategic manner. There is a virtually endless list of projects you can undergo in order to repair, update, and change your home. To get the most value out of these projects however, you need to consider each one’s cost, appeal, and potential ROI.

First, it’s important to identify home improvements with high potential ROI –– such as renovating a kitchen, making energy improvements, or installing a new roof. In the process, you must also be careful to avoid those projects that may cost more than they’re worth. If you can accomplish these things though, you’ll be well on your way toward an outline for improving your property’s value over time.