If you’re buying a home that might not be completely up to date (or maybe it’s just not quite your style), then you might be wondering: of all the possible improvements imaginable, which are the updates that increase home value the most?
Here’s the thing — not all updates will actually show a high return on your investment (also known in the biz as ROI). So it’s good to know which updates to make and what small changes can make a big difference in your new home and in your future wallet. The good news is that it doesn’t take a fortune teller to decipher what are the most valuable updates that increase home value.
Together, let’s look at home improvement projects and chat with the experts about the best-kept secrets in the home improvement biz. We’ll cover updates that boost energy efficiency, interior projects, exterior projects, and smart home automation. We’ll also give you all the details on upfront project costs and how much cost you can recoup to help you make the smartest choices.
We’re off to see the wizard — the wonderful wizards of home improvement and renovations. Click those ruby-red slippers together, and away we’ll go!
Energy-efficient boosts
While going green may or may not be on the top of your priority list, energy-efficient boosts are both planet-friendly and wallet-friendly.
1. Improve insulation
Who doesn’t like feeling warm and cozy in the winter? Improving insulation with loose-fill attic insulation is an excellent way to lower your heating bills in the winter, and it comes with a great ROI.
The Environmental Protection Agency (EPA) estimates that the average homeowner can save 15% on heating and cooling costs by improving insulation. EnergySage reports that insulating an attic comes with an average ROI of 117%. The average cost for attic insulation, including installation, is approximately $1.30 to $2.15 per square foot for loose-fill attic insulation.
There are typically four different types of insulation used in homes: loose-fill insulation, roll insulation, foam spray insulation, and rigid insulation. Loose-fill is also called blown-in insulation and is the most popular type used in attics; it is what our experts recommend.
Top real estate agent David Renberg confirms: “Buyers are going to assume that the home has newer insulation. And if it doesn’t, it is actually going to be a drawback for buyers.”
Whether the buyers directly ask about the insulation or not, if they find out that a home has insulation from the 1980s, they may also begin to suspect that the home has bigger underlying renovation issues.
2. Replace old garage door with insulated model
According to 2021 national averages, replacing the door for a two-car garage will cost roughly $3,907 and increase your resale value by $3,663. That means that 93.8% of your cost will be recouped.
Replacing your old garage door also drastically improves your curb appeal, making it a very important home update to improve resale value. Moreover, if your garage is well-insulated, but you have an old, drafty garage door, then you’ll lose money throughout the year as your air conditioning or heating units will have to work overtime to make up for all that is lost.
An insulated garage door helps to keep the extreme heat and cold outside where it belongs! Learn more about the “R-Value” (used to rate the “effectiveness of insulation in stopping heat flow opposite of conductance) of different types of materials used in garage doors to make a decision that is right for you and your home.
3. Replace old windows with energy-efficient versions
There are two different types of window replacements to consider: vinyl and wood. The 2021 national average cost of vinyl window replacement is $19,385, and you can count on recouping 68.6% of your costs, whereas wood window replacement will cost on average $23,219, with 67.4% of costs being recouped.
Updating your windows will boost temperature regulation in your new home for each window you replace — and, in turn, save you money. Consider upgrading to Energy Star-rated windows which also qualify you for a green energy tax credit. In fact, Energy Star studies show that by replacing single-pane windows with double-pane windows, homeowners can save 21% and 31% of their heating and cooling annual costs.
When you are in the market to replace old windows, Johnny Tipton, division manager of Ascension General Contractors in Nashville, Tennessee, advises that you “compare apples to apples, and not apples to bananas.” Well, since we’re not looking to make a pie, what does Tipton mean?
Tipton says, “Make sure to do your due diligence and research the product and the vendors for the windows to make sure they’re valid manufacturers.”
Many window companies produce their own brands, and there are a lot of different warranties out there, so doing research is key to avoid horror stories such as incorrect insulation that results in leaks or drafts, or even simply not getting the quality of windows that you paid for.
Interior boosts
Since home is where the heart is, we hope you love each and every room of your home. While that might not be the case when you initially buy a house, these interior boosts can help add value and make your home feel homier. You can always tackle bigger home improvement projects, but even smaller projects can be a big step in the right direction.
In fact, Renberg states, “I’ve observed homes sell at silly prices just because they felt cute and trendy, even if the updates weren’t done professionally, even if the updates weren’t very expensive.”
It’s important to be objective, do your due diligence and complete home inspections to get as much information as you can about a home.
4. Kitchen remodels
When it comes to kitchen remodels, over-improving your kitchen could mean you won’t recover the costs of your upgrades. That being said, remember that your home isn’t just an investment; it’s your home. And as Dorothy knows all too well, “There’s no place like home.”
Let’s start with the bigger kitchen renovation projects, including new cabinets, countertops, lighting, floors, upgrading appliances, or adding seating, dining, storage, or cooking space. A midrange, minor kitchen remodel will cost approximately $26,214 according to 2021 national averages and will add $18,927 in resale value, a 72.2% recoup of your remodeling costs. If you’re looking to do an upscale, major kitchen remodel, the 2021 national average costs $149,079 and will add $80,284 to your resale value, which means you’d recoup 53.9% of what you spend.
To minimize the costs and to maximize the ROI for your kitchen updates that increase home value, let’s go over some of the advice we’ve culled from the experts. In a dated kitchen, consider leaving the cabinet boxes in place and simply replacing the fronts of cabinets and the fronts of drawers — including shiny, new hardware — to minimize your expenditure.
For countertops, Renberg notes that “there are treatments that you can do to Formica that seem to hold up pretty well over time, that can modernize the color of your countertops.”
How about the flooring? Consider gong with vinyl, as it is a great deal less expensive than real hardwood or slate floors, and it is also strong and resilient! You can even find vinyl styles that mimic high-end finishes for a sophisticated yet low-cost look. If you want to explore more flooring options, there are plenty to choose from.
Looking to start with even smaller kitchen remodels and projects? Smaller projects can include refinishing cabinets, getting new cabinet pulls, upgrading light fixtures, and upgrading faucets.
Another small change that can make a lot of difference is a fresh coat of paint. Tipton recommends focusing on an accent wall. “An easy, small change a seller can do is to paint accent walls. Accent walls in home offices or kitchen dining room areas are really popular right now,” he says. One wall? That doesn’t sound too bad at all!
Renberg affirms that small kitchen upgrades can have a big impact. “Fresh paint, hardware, light fixtures, door handles — those types of things modernize the space,” he says.
Adding or updating a backsplash is another small upgrade that can pack an aesthetic punch. Unsure what a backsplash is? Backsplashes are the panels that fill the gap on a kitchen wall between the countertop and the cabinets. This is a place you can have fun and let your creativity flow with a seemingly endless selection of textures, colors, and design patterns.
5. Bathroom upgrades
Once again, there is a range of bathroom updates you can take on. In 2021, the average mid-range bathroom remodel will cost approximately $24,423 and will add $14,671 to your resale value, totaling in 60.1% cost recouped.
For a major, upscale bathroom remodel, it will cost on average $75,692 and will add $41,473 to your resale value, coming in at 56.1% for cost recuperation. Bigger projects include upgrading to a new sink, tub, shower, or toilet as well as retiling your bathroom. Minor updates that increase home value include updating your vanity, mirror, or lights, as well as simply caulking or reglazing your tub. A fresh coat of paint never hurts!
According to USA Bath, the top two tips to decrease costs and increase your bath remodel ROI are prioritizing replacing things that are broken, and prioritizing the layout.
What counts as broken? Cracked or broken tiles, outdated paint jobs, peeling or mildewed caulk, stained grout, and so on. These things may even show up on your inspection report.
In terms of layout, consider a toilet placed right against a bathtub or a cabinet door that you constantly hit your head against. Pay attention to the layout of the bathrooms as you view homes so you can determine if it works for you, or if you might be signing up for a future project.
Renberg confirms, “The things that give you the biggest bang for your buck, while it may be cliche, are your kitchen and your bathroom. That’s what people tend to scrutinize; people really take note if those things aren’t updated.”
If you have antiquated wallpaper or a pastel pink toilet, upgrading those can make a huge difference. “Both big and small upgrades in the kitchen and bathroom are where you will help you get the most money for your home,” Renberg says.
Smart home automation
Remember Disney Channel’s 1999 movie Smart House? That house came with a robot virtual assistant, which we’re not necessarily advocating for, but there are some smart home automation options that won’t break the bank and can help put you and your family more at ease. Let’s continue down that yellow-brick road and examine smart home automation updates that increase home value.
6. Smart thermostats
Smart thermostats are a great place to start, as they help reduce energy costs. While different manufacturers tout different saving percentages, as of April 2021, Ecobee customers saved up to 26% on their heating and cooling, whereas Nest smart thermostat customers saved between 10% to 12% range.
With smart home thermostats, you’ll also be able to track your energy usage and make adjustments to your preferences to reduce energy costs even further. In terms of installing a smart thermostat, it’s fairly simple! The price of a smart thermostat varies, but most fall between $89 and $400.
7. Smart home security systems
Smart home security systems are highly customizable and are available as both DIY kits and as set-ups that include professional installation and professional monitoring. Monitoring costs, on average, $32 per month, with installation and activation costs ranging from free to $200. For reference, SimpliSafe, one of the most popular home smart security companies, charges 83 cents per day.
Of course, it depends on your needs, but it is more affordable to install an individual device yourself and to monitor your home from your phone or tablet from absolutely anywhere. These smart home security system kits can include outdoor and indoor security cameras, motion sensors, video doorbells, and smart locks. Amazon does have some great DIY kits ranging from $299 to $339.
8. Smart smoke, carbon monoxide, and radon detectors
Smart smoke, carbon monoxide, and radon detectors are some of the most helpful purchases for upgrades on the market. They send alerts to your phone if they detect anything out of the ordinary, which is especially useful for those who travel frequently or have second homes.
The alert sent to your phone also may “include helpful voice instructions instead of just a siren — your smartphone also tells you what the problem is (whether it’s smoke or CO, which alarm was activated, and sometimes even the severity of the smoke.” These smart detectors range from $34.99 to $173.99, and these updates don’t just increase home value, they also help keep your home safe and protected.
Exterior boosts
There are quite a few things you can do to the exterior of your home to increase its value — and elevate its curb appeal instantaneously. These exterior boosts help ensure that the minute someone drives up to your home, they’ll ooh and ahh. And fortunately, it doesn’t take millions to increase your curb appeal and add value to your home.
9. Landscaping
A well-landscaped home has a significant price benefit over a home with no landscaping. This advantage actually ranges from between 5.5% and 12.7%, with the key variables being the home’s original value and the type of landscaping.
If you’d like a little math to straighten things up, that means adding an extra $16,500 to $38,100 in value on a $300,000 home just by throwing landscaping updates into the mix.
If you’re looking for minor landscape upgrades that are low-cost but have high ROI, consider simply pruning or planting more bushes and adding some lighting. If you’re willing to step things up a little bit more, let’s cover power washing, replacing siding, and deck additions.
10. Power washing and siding replacement
Power washing your home and replacing the siding can go a long way toward improving its curb appeal. The average cost of power washing your home is $350, though it will generally fall between $130 and $650, depending on the size of your home and your location. Power washing helps your home look fresh and clean.
Replacing the siding of your home will cost $12 per square foot on average, although there are more budget-friendly options where the cost can be reduced to a mere $2 per square foot. The two least expensive options are vinyl or aluminum siding.
Fiber cement or engineered wood siding are other budget-friendly options, with natural siding, stucco, and stone veneer siding being the three most expensive siding options.
11. Deck addition
By far the priciest exterior boost to your home is adding a deck. While it’s a large project, it is one of the biggest updates that increase home value.
If you’re considering a wood deck addition, the 2021 national average cost was $16,766, and it increased the home resale value by $11,038, which is a 65.8% cost recoup. In terms of a composite deck addition, the average cost was $22,426, with an increased home resale value of $14,169 and a 63.2% cost recoup.
Which to choose? A wood deck will generally have a lifespan of 10 to 15 years, whereas a composite deck can last between 25 and 30 years. Because both deck additions have a similar ROI, it all depends on how long you want to stay in the home before you sell, and the upkeep you’re willing to handle.
If you’re curious about deck trends, Tipton highlights that “Adding or updating the sitting area or entertainment area to your deck or porch, and upgrading them to include full entertainment with sound, lights, and a fireplace, are real hot sellers right now.”
If you have some extra dough to spend and feel like riding the trend, go ahead and treat yourself to a fancy entertainment upgrade. If not, you can always set your Bluetooth speaker next to your laptop running a crackling fire video.
The bottom line
Why don’t we wrap this up with a little quote from the Tin Man? While he may have lamented, “If only I had a brain!” — with this article in hand, there’s no need to scratch your head or to rack your brain for home update solutions, as the wonderful wizards of home improvement have worked their magic once again!
Home improvement projects can be tricky to budget for or to prioritize, so it can be helpful to choose upgrades that come with the most benefits and the highest ROI. A HomeLight agent can help you navigate the needs of outdated homes and steer you in the right direction about which updates and renovations offer the best returns in your market.
Header Source: (Zac Gudakov/ Unsplash)