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How to Earn a Positive ROI on Home Improvements

  • 4 min read

When it comes to considering home improvements there are different types of improvements you can do. We will dive into each and then get into the data that will help you determine the return on investment (ROI) of each that will be helpful in your analysis.

There are home improvements that need to be done simply because it is deferred-maintenance-related or age-related. This would be things like siding, roof, HVAC system, or water heater.  It would depend on the type of market when you decide to sell. Most buyers would expect these things to be maintained or at a price that they would be willing to do it themselves at a later time.

There are other things you should do because it would make your time in the home so much better. Often we will go to list a home and a homeowner states “we’ve always wanted to do x/y/z to this home”.  They end up doing it for the sale and love it but only get to enjoy it for a short period of time.  Sometimes there is also a concern that you’ll wear it down and it won’t keep its value for a future sale.

It is important to think through what makes sense for you and your situation.

Would it increase your quality of living in the home? Is it trendy? If so, you’ll want to consider if the value spent is worth it to change later, if needed. Is it necessary because it is worn or broken? All things to consider but it may be worth doing it now and enjoy it.  It does often make you love your time in the home that much more.  

So let’s get down to the nitty-gritty…the numbers.  You may have seen this research before for the return on investment or cost vs value with home improvements.  The information tends to be nationwide data so check if there is something more region or city-based.

Check out the image below for a great visualization of the cost vs value on various home improvement projects.
2020 remodel roi home improvement

If you like things like this, we suggest websites like Fixr or Remodeling.HW for more data and trends.

Local market trends will drive certain improvement values.  For example, a pool, tile throughout, or fireplaces. No need for a fireplace in Florida but a pool or tile throughout would be worthy upgrades and often expected.  Screened in porches add great value where there are many bugs.  Look at the National data and use it as a guide. We can help provide you with local data.

As a seller in any market, you can decide how much or little you want to do to a home in order to sell it but timing is a critical factor. Check out the trends below and see how the ROI has changed over the past few years.

home improvement roi trend

There are few home improvement projects that give a positive ROI (we do have one locally, can you guess it?). We would argue that the speed of the sale or the quality of your time in the home provides tremendous value that may not translate directly into numbers. If you do it right, appreciation in the home over time with the new improvements should create the positive ROI you desire.

Check out these Kitchen Improvements under $100 (or close)