[READ A BIT BLOG] Increase Your Home's Equity | Home Improvement Projects with the Highest ROI
Ask any homeowner about what they would like to change about their home, and most will say, “How much time do you have?
Home improvements (cue Tim Allen) or home remodeling projects can stem from a variety of motivations, like preparing your home to put on the market, adding space for a growing family, addressing outdated features or aesthetics, or fixing structural/functional issues with the home.
However, when it comes to home remodeling projects, too many people assume their project will proportionally increase the value of their home. Few actually consider the complete scope of return on investment (ROI), taking into account not only potential impact on resale value but also the total costs of time, labor, and materials. Some renovations may provide more “quality of life” ROI by improving comfort and aesthetics without significantly impacting resale value, while others can deliver notable financial returns.
Whether you’re looking to upgrade your living space, increase the equity of your home, or trying to make some quick changes to improve your resale price, here are four remodeling projects with the highest ROI and some tips on how to get them done.
Top 4 Home Improvement Projects with the Highest ROI
NOTE: ROI figures are based on National averages.
Our Local Costs may lead to variations in actual Returns.
Before diving into specific projects, it’s important to understand how the data supporting these ROI estimates was gathered. This article references findings from the 2024 Cost vs. Value Report conducted by Zonda Media, a reputable research firm in the real estate and construction industries. The report’s ROI figures are based on national averages for both the cost of materials and labor, which means that regional differences may lead to variations in ROI in your home improvement project.
1. Garage Door Replacement
- Job Cost: $4,513
- Resale Value: $8,751
- ROI: 193.9%
Replacing an old garage door is one of the simplest ways to dramatically boost your home’s curb appeal—and it happens to deliver the highest ROI of any remodeling project. The impact is largely due to the prominent visual space a garage door occupies on a home’s exterior. A sleek, modern garage door can make your entire facade look fresher and more attractive to buyers.
Garage doors with the highest ROI include insulated steel doors with modern paneling, custom carriage-style doors, and those featuring windows or decorative hardware. These options not only enhance the home’s exterior aesthetics but also improve functionality and energy efficiency.
2. Steel Entry Door Replacement
- Job Cost: $2,355
- Resale Value: $4,430
- ROI: 188.1%
Upgrading to a steel entry door is a simple yet impactful change that can drastically improve both the look and energy efficiency of your home. Steel doors cost less than wood ones, giving you a cost effective way to make a big impact on the curb appeal of a home, without sacrificing performance, life span, or durability.
Why It Works:
- Cost-Effective Curb Appeal: Steel doors are less expensive than wood but provide a similar aesthetic boost. This makes them a budget-friendly way to enhance a home’s exterior.
- Energy Efficiency: Many steel doors come with insulating cores, which can help keep your home comfortable year-round and lower energy bills.
- Increased Security: Steel doors are harder to break into, providing an added layer of safety that appeals to security-conscious buyers.
3. Manufactured Stone Veneer
- Job Cost: $11,287
- Resale Value: $17,291
- ROI: 153.2%
Manufactured stone veneer (MSV) is a high-ROI project because it delivers a striking visual upgrade at a relatively moderate cost. MSV is an artificial cladding material designed to mimic the look of natural stone, making it a cost-effective way to add texture and sophistication to your home’s exterior.
Why It Works:
- Strong Visual Impact: Stone veneers add depth and elegance, creating an upscale appearance that can significantly boost curb appeal.
- Durability and Low Maintenance: Unlike natural stone, MSV is lightweight, easier to install, and resistant to wear and tear.
- Perceived Value: Even though it’s a faux material, MSV adds an air of luxury and craftsmanship that can make your home more appealing to buyers.
Pro Tip: Use manufactured stone veneer to accentuate specific areas, such as around the entryway or along the lower portion of the facade, for maximum visual impact without overspending.
4. Minor Kitchen Remodel (Midrange)
- Job Cost: $27,492
- Resale Value: $26,406
- ROI: 96.1%
According to Homelight’s “Top Agent Insights End of Year 2024 Report”, “88% of agents say that upgraded kitchens and appliances are one of the best selling points for homes”–a significant increase from the previous year. https://homelightblog.wpengine.com/wp-content/uploads/2024/12/homelight-top-agent-insights-end-of-year-2024-report.pdf
The trick to ROI with a kitchen remodel is the budget, and how you decide to balance what to upgrade, the quality of materials, and how much to work within the existing layout. For example, you can make a big impact with less expense if you keep your current cabinet boxes but upgrade the doors and hardware. However, if you strike that balance, you can recoup much of your investment. If you’re looking to sell, an updated kitchen will appeal to buyers, which can also help your home stand out and sell faster.
Why It Works:
- High Buyer Interest: Kitchens are a focal point for most buyers, so even modest improvements can make a significant impact.
- Affordable Upgrades: By focusing on midrange materials—such as quartz countertops, midrange appliances, and refaced cabinets—you can keep costs manageable while still delivering a fresh look.
- By keeping the existing layout and avoiding costly structural changes, you can modernize your kitchen while keeping costs down.
Key Takeaways for Homeowners
7 out of the 10 best ROI projects all have to do with improvements to the exterior of your home, which makes one thing very clear: Boosting the curb appeal of your home in a cost-effective manner will give you the best ROI if you’re thinking about selling this year.
If you look at the current housing market, you can start to see why that is. In the post-pandemic frenzy, buyers had to accept whatever they could find. However, housing inventory has increased over the last couple of years, giving buyers more options. Additionally, due to high-interest rates and affordability issues, the current market favors older, move-up home buyers who are sitting on equity, and these buyers can afford to be pickier about the home they buy.
You can see these trends play out in the “Top Agent Insights End of Year 2024 Report” conducted by HomeLight:
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Given these trends, it’s no wonder that the remodeling projects with the best ROI are those that make the home stand out from other homes in the area and leave a strong impression with potential buyers.
Conversely, the projects with the lowest ROI involve major remodels or upscale materials. Anytime you alter the footprint of a home—such as by moving walls or adding square footage—you’ll incur higher costs and lower returns. Unless you’re a general contractor or a skilled DIYer, these high-end renovations typically aren’t worth it from a purely financial perspective. The one caveat is if you’re in a market where high-end appliances and materials are the rule not the exception.
Conclusion
Whether you’re updating your home to sell or simply want to enjoy a more modern space, focusing on high-ROI projects is a smart strategy. From replacing your garage door to enhancing your home’s exterior with stone veneer, these upgrades can boost both your home’s value and appeal.
Curious about what features are popular in your neighborhood? Thinking of moving and wondering what remodeling projects, if any, you should do before listing? Want recommendations on contractors? I’m happy to help!
Contact Bernice (Berni) Halaas
REALTOR® | CEO | Designer
320-492-3420 or Berni@NewCenturyMN.com
New Century Real Estate
Our team helps you fully understand the process of purchasing and/or selling a home. We work with homebuyers, home sellers, and investors in Sauk Rapids, Sartell, St Cloud and the surrounding area.
