Small Projects, Big Returns: Home Improvements That Add Value

Most homeowners have considered tackling a home improvement project at some point. According to a report from the Joint Center for Housing Studies at Harvard University, 24.5 million homeowners took on home improvement projects in 2021, spending an average of $3,300 to $4,000 per owner. 

Investing in home improvement projects can increase your home's resale value or allow you to save money on energy costs. Still, not all things that increase value have the same return on investment (ROI).

If it’s time to sell, start by targeting small home improvements that can yield a higher sale price. These updates could also pay off if you refinance to take advantage of a lower interest rate or take out a home equity line of credit (HELOC).

“A kitchen renovation is the first place I recommend my clients spend their money if they’re thinking about doing a remodel,” says Christopher Brown, principal/broker at Next New Homes Group in California. “The ROI is massive.”

Based on findings from the National Association of Realtors (NAR) most recent Remodeling Impact Report, a kitchen upgrade costs an estimated $45,000 with a potential 67% ROI.

Replacing your old kitchen countertops can help increase your home’s value, and you could see a considerable return on your original investment. According to home improvement marketplace Angi, the average cost to install kitchen countertops is $1,870 to $4,400. Still, some homeowners may pay up to $10,000 for certain materials.

Not all countertop materials are created equal. The National Kitchen & Bath Association (NKBA) named quartz the top countertop material of 2023. According to Angi, quartz costs about $15 to $70 per square foot. Granite is another popular countertop choice that potential buyers look for, but it is among the most expensive. Homeowners can expect to pay $10 to $140 per square foot for a granite kitchen countertop.

High-quality laminate is more affordable, costing between $8 and $35, but the ROI may be lower than natural stone countertops.

Installing a kitchen backsplash is a more budget-friendly option than countertops. The project costs between $500 and $1,700, but Angi estimates that savvy DIYers can cut costs by up to half if they do it themselves. 

Tile, stainless steel and glass are common backsplash materials, costing $25, $20 and $30 per square foot, respectively. Another option is to extend the countertop into the backsplash, which NKBA noted will be an emerging trend in 2024.

“A lot of people think you have to completely remove and replace all cabinets to do an upgrade or a renovation,” says Aaron Luttrull, president at Schuler Bauer Real Estate Services in Indiana.

If you have good, solid cabinets, Luttrull recommends painting and changing out hardware for a nice return on value. “Making sure that they have some modern touches is going to be one of the best things you can do in a kitchen,” Luttrull adds.

Based on Angi's data, kitchen cabinet replacement can make up 40% or more of the cost of a kitchen remodel. However, painting costs between $3 and $10 per square foot, or an average of $919 for the entire project. Another costly option is refacing the cabinets, which is about $7,225 on average.

Swapping out the hardware is the most budget-friendly option. According to Remodeling Magazine’s 2024 Cost vs. Value Report, a minor kitchen remodel with new hardware has an ROI of 96.1%.

“Matching appliances is always a bonus for a lot of buyers,” Luttrull says. This is especially true for energy-efficient models.

Although energy-efficient appliances may seem more expensive than standard appliances, the energy savings and potential rebates help reduce the costs significantly. For example, according to Energy Star, replacing an old refrigerator with an energy-efficient model can save you more than $300 per year to run it.

“A bath remodel is my number two remodel suggestion for my clients,” Brown says. This includes updating the bathroom with modern fixtures, tiles and efficient lighting. “If you’re handy, a bath remodel is also one of the most rewarding DIY projects you can do,” Brown adds.

According to NAR, a complete bathroom remodel costs $35,000 on average, with an ROI of 71%. 

A midrange bathroom remodel was listed on Remodeling Magazine’s Cost vs. Value Report as a project with an ROI of 73.7%.

Replacing an old vanity with high-quality materials has a high ROI, and the average cost to install is $2,300 with materials and labor, according to Angi. Luttrell recommends swapping out the old vanity and sink for something with more modern touches. 

You can also custom-build a vanity with a modern finish, such as granite. Angi says homeowners can expect an ROI of just under 60%.

Upgrading your bathroom’s fixtures, including faucets, showerheads and lighting, is a quick and affordable way to boost your home’s value. Consider modern fixtures that match the bathroom finish. 

According to Angi, replacing a bathroom faucet and showerhead costs between $260 and $270, on average, while a light fixture installation costs $585. Opt for bright vanity lighting and soft ambient lighting overhead.

Replace outdated tile with a fresh look. The average cost to retile a bathroom is $2,000, and homeowners can expect an ROI of 100% in some cases, according to Angi. 

Consider replacing dated tile with ceramic or porcelain for a waterproof finish. For colder regions, Angi recommends installing heated floors to boost your home’s value even more.

Install a low-flow toilet with a modern design to save money on your water bill and increase your home's value. According to Home Depot, the average cost of toilet installation and replacement varies from $185 to $400. 

“If you have two homes that are priced relatively similarly and are in similar condition, the homes with more energy efficiency are going to be a lot more appealing to most buyers,” Luttrull says. This is because buyers will typically see more significant savings with lower energy bills and maintenance costs.

Brown says installing energy-efficient windows, doors, and appliances can increase a home’s value by 5% to 10%. State or local utilities may also offer rebates to pay for or offset the cost of these upgrades.

Replace old, drafty windows and doors with modern, energy-efficient alternatives. NAR data indicates that the return on investment for replacing vinyl and wood windows is 63% and 67%, respectively.

The Department of Energy also estimates that homeowners can save 7% to 15% on annual household energy bills by replacing old windows with Energy Star qualified models, or about $71 to $501 per year.

Older homes often have less insulation than newer homes today. Insulation keeps a home warm in the winter and cool in the summer by slowing the movement of heat from inside and outside the house. 

According to the U.S. Department of Energy, improving the insulation in your walls, ceilings, and floors will make your home more comfortable and will pay for itself in energy savings within a few years. Plus, there are federal tax credits available for certain types of insulation, 

Insulation costs between $498 and $4,500, depending on the material, area size and location in the home, per Angi’s data. 

NAR reports that an insulation upgrade has a 100% ROI.

There are state and federal tax credits and rebates available to homeowners who upgrade to energy-efficient heating and cooling systems. You can save up to $1,200 on energy-efficient improvements or up to $2,000 on upgrading to electric heat pump technology. 

“Also, you know, if you have older HVAC components or things of that nature, those are upcoming maintenance costs that a lot of home buyers are going to take into consideration before making an offer on a home,” Luttrull explains.

According to Angi, a new HVAC system can raise your home’s value by 5% to 7%, and costs anywhere between $5,000 and $10,000.

Consider installing solar panels for long-term savings. By installing a solar panel system, homeowners can expect to save an average of $1,530 on annual energy bills, per MarketWatch research. This means it will take nine years to recoup the cost of the system.

A study from the University of Texas at Arlington found that curb appeal accounts for 7% of your home’s value. The way your home looks on the outside is also responsible for the first impression it makes on prospective buyers. 

“This is a lower value item than some of the other items on the list, but when people are searching for a home on the internet, they typically don’t see your stunning remodeled kitchen and bathroom picture first,” Brown says. “They see a picture of the front of your home. If you don’t spend a few dollars on paint and landscaping, all the money you spent inside was wasted, because everyone kept scrolling by your home.”

Maintain a well-manicured lawn and garden. Among exterior projects, standard lawn care service has the most significant ROI at 217%, per NAR’s 2023 Remodeling Impact Report: Outdoor Features. Outdoor lighting also has a high ROI of 59%.

“The biggest thing is making sure that your home is clean, clear of debris and that your landscaping is not overgrown,” Luttrull says.

Freshen up the exterior with a fresh coat of paint to increase curb appeal. You can expect to pay between $1,810 and $4,524 for this project, according to Angi. The best paint color depends on your home’s style, exposure to the sun and exterior materials.

Replace or refinish the front door to boost your home’s curb appeal. Remodeling Magazine ranked steel entry door replacement second on its list of home improvement projects with the highest percentage of cost recouped: about 188% ROI with a $2,355 investment.

A garage door replacement also has a high ROI. Replacing the garage door costs around $4,500, but Remodeling Magazine reports an ROI of nearly 194%. “One of the biggest return on investments that people have looked at for boosting curb appeal and home value is replacing the garage door,” Luttrull says. “It's one of those things that people often overlook, but it has a massive impact.”

Repair damage to your driveway and walkway to make a good impression with little investment. Angi’s data shows that an asphalt driveway repair costs $2,454 on average. Meanwhile, a concrete driveway repair costs $1,782. Repairing a sidewalk costs about $1,593 on average.

You don’t need to make expensive home improvements to see a significant return on investment. Small home renovations can help improve your living space and boost your home’s value. 

If you’re selling your home, your real estate agent can help you identify which projects to focus on. “The ultimate determination of if a renovation adds value is if the home sells quicker and at a higher price compared to unimproved homes in the neighborhood,” Brown says. “Leaning into your real estate professional and their local expertise is where the art and science of selling a home come together.”