Ask any homeowner what they want 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from various motivations, like preparing your home to put on the market, adding space for a growing family, addressing outdated features or aesthetics, or fixing structural/functional issues with the house.
However, when it comes to home remodeling projects, too many assume their project will proportionally increase the value of their home. Few actually consider the complete scope of return on investment (ROI), considering the potential impact on resale value and 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 your home's equity, or try 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 Remodeling Projects with the Highest ROI
Before diving into specific projects, it’s essential 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 real estate and construction research firm. 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 actual returns.
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 boost your home’s curb appeal dramatically—and it happens to deliver the highest ROI of any remodeling project. The impact is primarily due to a garage door's prominent visual space 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 enhance the home’s exterior aesthetics and 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 your home's look and energy efficiency. Steel doors cost less than wood ones, giving you a cost-effective way to make a big impact on a home's curb appeal 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 more challenging 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 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 significant impact with less expense if you keep your current cabinet boxes but upgrade the doors and hardware. However, you can recoup much of your investment if you strike that balance. 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: You can keep costs manageable while still delivering a fresh look by focusing on midrange materials like quartz countertops, midrange appliances, and refaced cabinets.
By keeping the existing layout and avoiding costly structural changes, you can modernize your kitchen while decreasing costs.
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 very clear: Boosting your home's curb appeal cost-effectively will give you the best ROI if you’re thinking about selling this year.
Looking at the current housing market, you can 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 few 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 homes they buy.
You can see these trends play out in the “Top Agent Insights End of Year 2024 Report” conducted by HomeLight:
Given these trends, it’s no wonder that the remodeling projects with the best ROI make the home stand out from other homes in the area and leave a strong impression on 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.
How to Get Started on a Remodeling Project
Starting a remodeling project can feel overwhelming. Here’s how to set yourself up for success:
1. Outline Your Project Goals:
Before diving into the nitty-gritty of remodeling, step back and clarify what you hope to achieve.
Are you remodeling to improve aesthetics? To improve functionality or comfort for your family? To prepare your home for the market or boost your resale value? Is it an essential repair? After you decide on why you’re doing it, you can take a step back and decide what is worth the cost to you.
2. Get inspired:
Take time to gather ideas and give shape to your vision. Whether you’re updating a single room or tackling a whole-house remodel, these resources can inspire you:
Houzz
– A go-to platform for home remodeling ideas, with photos, product links, and even local contractor recommendations.
Pinterest
– Create mood boards for different rooms by pinning your favorite designs and layouts. You can also add ‘-Pinterest’ to Google searches to find more targeted boards and collections of remodeling ideas on Pinterest.
This Old House
– Packed with articles, videos, and guides on home renovation projects, from DIY fixes to large-scale remodels.
YouTube Channels: Follow popular home renovation YouTubers who share real-life projects, product reviews, and practical tips.
Visit Local Showrooms: You can visit the showrooms or warehouses of local manufacturers for ideas on fixtures, cabinetry, and countertops.
Open Houses – Stop by open houses in your area to get a feel for what’s popular and what other homeowners have done.
Local Remodeling / Contractor Websites: Many will post galleries and before/after images of their renovations, and these galleries can be a goldmine for practical remodeling ideas!
3. Prioritize your wants vs. needs:
Once you’ve gathered ideas, it’s time to separate the essentials from the extras.
Must-Haves: These are the non-negotiable items—structural fixes, code-compliance upgrades, or critical repairs.
Nice-to-Haves: These are aesthetic choices or features you’d like to include if your budget allows.A prioritized list will help you make tough decisions if costs start to climb or timelines get tight.
4. Create a scope and timeline:
Clearly defining what’s included (and excluded) in your remodel is critical for staying on schedule and within budget.
What’s Included: Are you only updating finishes and fixtures, changing the layout, and moving walls?
Project Phases: If remodeling multiple areas, consider breaking the project into phases to manage timelines more effectively.
Expected Timelines: Be realistic about the project's length, especially if you’re working around major life events or seasonal weather.
5. Set a realistic budget:
Start by researching the typical costs for your specific type of remodeling project in your area. Resources like Remodeling Magazine’s Cost vs. Value Report, HomeAdvisor, and NAHB provide national and regional averages for popular renovations like kitchens, bathrooms, and additions.
6. Include a Contingency Fund:
Even with thorough planning, unexpected costs seem to always arise. Many experts recommend setting aside 15% – 30% of your contingency budget.
7. Research contractors & Get Multiple Quotes:
If you’re hiring contractors, request at least three detailed quotes to compare prices and scope of work. Make sure to clarify what’s included in each quote to avoid misunderstandings. And use your checklist below for some tips on hiring a contractor!
Checklist for Hiring a Contractor
Finding the right contractor is crucial for a successful remodeling project. Here’s a quick checklist to help you hire the right professional:
Get recommendations from friends, family, neighbors, and real estate agents. Word of mouth is one of the most reliable ways to find a trusted contractor. Ask people you trust about their experiences and if they would hire the contractor again. After you have a recommendation, you can also search for reviews online.
Check credentials, licensing, and insurance. Verify that the contractor is licensed to work in your state. Most states have an online database for checking contractor licenses. You can also look for contractors certified by reputable organizations, such as the National Association of the Remodeling Industry (NARI).
Review past projects and ask for client references. Ask to see a portfolio of previous projects similar to yours. Please pay attention to the quality of work and whether their style aligns with your vision.
Request detailed bids from multiple contractors. Ask for written estimates that break down costs into labor, materials, permits, and any additional fees. Compare bids carefully to ensure all contractors are quoting on the same scope of work.
Ensure the contract includes a clear scope of work, timeline, and payment terms.
Check references – A reputable contractor should have no issue providing references. Contact past clients and ask about their experience.
Avoid red flags
Unusually Low Bids: A bid significantly lower than others could indicate corner-cutting or hidden costs.
Pressure to Pay Upfront: A small deposit is regular, but you never pay the full amount before work begins.
Lack of Written Contract: Never agree to verbal agreements only.
Poor Communication: If a contractor is difficult to reach or dismissive during the bidding process, this may continue during the project.
Conclusion
Whether you’re updating your home to sell or 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 your home’s value and appeal.
Are you curious about what features are prevalent in your neighborhood? Thinking of moving and wondering what remodeling projects, if any, you should do before listing? Do you want recommendations on contractors? I’m happy to help!