In today’s market, remodels that are planned with a return on investment in mind is essential. Properties are selling quickly, so only those projects with the best opportunity to increase value are worth the investment. For investment properties, you can then rent your units for more income while planning to sell. Or, you can add value to your home while enjoying living in it.According to the 2018 Consumer Housing Trends report, nearly 80% of sellers made at least one improvement before selling with most sellers averaging 2.2 renovations or improvements before selling. Only 21% of the sellers in 2018 actually listed their home as-is. This article covers a range of the best improvements for return on investment across different budgets, plus those remodeling projects that do not pay off at resale.

Budgets for Renovations to Increase Home Value

Deciding how much you can afford to spend and how to come up with that amount is the first step before researching renovations. There are a few different ways to pay for your renovation.


Paying in cash is usually your best option, as you’ll avoid debt and interest payments. The downside of this is that the money you spend will be tied up until you can sell your home.


Financing is the more popular choice by home owners, especially if they are planning on selling quickly after finishing a remodel. There are a few different ways to finance a remodel but the usual requirement from lenders is that the amount you borrow added to your remaining mortgage amount equals less than 90% of the home’s pre-improvement value. Let us say you have a home you bought for $350,000 and still owe $270,000 on that; lenders would probably give you around $45,000 maximum of a loan (as 90% of 350,000 is $315,000 and $315,000 minus $270,000 leaves $45,000). Two common financing options include taking on a second mortgage and borrowing on home equity.

Since interest rates are extraordinarily low, this is a better than usual time to borrow using either of these options:

Second Mortgage

A second mortgage allows you to borrow a fixed amount of cash, in a lump sum that has a fixed interest rate similar to your first mortgage.

Home Equity Line of Credit (HELOC)

A HELOC acts like a revolving credit line with the equity in your home acting as the security backing. This allows you to borrow what you need as you go, but with a variable interest rate that can change for better or worse. Look for a product with a fixed initial term that will last until your target sell date.

Popular Home Improvements in 2020 that Give the Highest ROI

According to the 2020 Cost vs. Value report by Remodeling magazine, the following home improvement projects are the most profit returning nationwide.

  1. Manufactured Stone Veneer
  • Cost: $9,357
  • Resale: $8,943
  • Recoup: 96%
  1. Garage Door Replacement
  • Cost: $3,695
  • Resale: $3491
  • Recoup: 94%
  1. Siding Replacement (fiber cement)
  • Cost: $17,008
  • Resale: $13,195
  • Recoup: 78%
  1. Siding Replacement (vinyl)
  • Cost: $14,359
  • Resale: $10,731
  • Recoup: 75%
  1. Window Replacement (vinyl)
  • Cost: $17,461
  • Resale: $12,761
  • Recoup: 72%
  1. Deck Addition (wood)
  • Cost: $14,360
  • Resale: $10,355
  • Recoup: 72%
  1. Window Replacement (wood)
  • Cost: $21,495
  • Resale: $14,804
  • Recoup: 69%
  1. Entry Door Replacement (steel)
  • Cost: $1,881
  • Resale: $1,294
  • Recoup: 69%
  1. Deck Addition (composite)
  • Cost: $19,856
  • Resale: $13,257
  • Recoup: 67%
  1. Roofing Replacement (asphalt shingles)
  • Cost: $24,700
  • Resale: $16,287
  • Recoup: 66%

Popular Low-Cost Home Improvements

If the ten remodeling projects listed above are too expensive for you, consider these lower-cost projects that still offer a lot of bang for your buck.

Repainting the Interior

Natural wear and tear like dings, nail holes and fading can take a toll on walls. These imperfections are particularly noticeable in photos and videos needed for virtual marketing. A new coat of paint gives your home a fresh, appealing and updated look. Most sellers paint their home prior to selling.

  • Neutrals like gray, beige, or the funky new term “greige” which is a combo of both colors, on walls along with white trim are generally the better selling colors.
  • Over the years, Zillow’s Paint Color Analysis found that homes with light taupe living rooms sell for higher.
  • In regards to painting bathroom walls, homes with light blue or blue-grey colors tend to sell for higher.

Curb Appeal

It’s crucial that your home makes a good first impression. The first thing buyers see, both online and in person, is your home’s exterior.

  • The colors of your front door can have a big impact. Over the years, Paint Color Analysis found that homes with charcoal, smoky-black or jet-black front doors sell for higher.
  • Landscaping can also spruce up the pre-sale appeal.

Smart Home Technology

Most of the upcoming home buyers in today’s market rate smart home technology as highly important in their home search.

  • Smart thermostats are popular additions and easy to install.
  • Voice-assistant-controlled light bulbs are also an appealing feature that can help your home compete against newer homes which often come packed with smart home features.

New Lighting

In order to showcase your home’s features, it is important to have good lighting. Upgrading your lighting is easy, inexpensive and can make rooms feel larger than they are. Some upgrades include:

  • Adding pendants to your kitchen.
  • Enhancing decor with window treatments.

Small Bathroom Updates

Before you rip out tiles or change all the fixtures to give the bathroom a facelift, consider these simple fixes:

  • Replace the vanity lights to freshen it up.
  • Re-caulk or reglaze the tub to make it look newer.


Updating the flooring is another common task, taken on by sellers.

  • If you have wall-to-wall carpets, deep clean them.
  • If you have hardwoods, buff it to conceal any visible scratches or stains.

Renovations that Will Not Always Add Value

Some upgrades will not necessarily help your home to be more attractive to sellers. Be aware that these are some renovations to avoid if you plan to sell.

Swimming Pools

Not all buyers want a pool. Many see pools as a big safety issue or a tremendous maintenance burden.

Luxury Upgrades

Professional-grade appliances and marble countertops are indeed very high-end touches yet not all buyers are willing to pay extra for that, depending on which real estate market you are in.

High-End Landscaping

Similar to a luxury upgrade, investing in expensive landscaping and water features does not always appeal to buyers who might see them as a big responsibility or hassle.

Minimum Repairs to Fix Prior to Selling

Minor repairs and maintenance are often needed to show that you really put care into the home. When it comes to how much your home sells for, this can be the negotiating fact as your buyer won’t have to worry about such repairs in their inspection. Consider these smaller projects:

  • Replace appliances, HVAC system or any other broken mechanicals
  • Peel off wallpaper and repaint
  • Weed and groom an overgrown landscape
  • Fix all leaky or broken plumbing
  • Replace any cracked or loose tiles

If you need more direction on what are must-do repairs for your home, a pre-inspection can give you more specifics on what buyers will be looking for in regards to your home.

If You Cannot Afford Home Improvements Prior to Listing

If you don’t have enough of a budget to complete any repairs or improvements before listing, you have a couple of options:

Sell As-Is: This means you won’t be making any repairs before closing and your listing price accommodates for that fact. Be aware that buyers may try to negotiate the price even lower however, especially if the property is in poor shape.

One thing you can do that will only cost your time is to make sure every room is sparkling clean and remove, donate or dispose of clutter.

Offer a Credit-at-Closing: This means you offer a credit to the buyer after closing that will cover any repair-issues uncovered in your buyer’s inspection. Be aware, that the buyer often requests a higher bid than what the repairs would have cost you if you had completed it ahead of time.