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Best and worst home improvements for resale value

What we'll cover

  • Return on investment of common home upgrades

  • Which upgrades boost your home's worth

  • Some renovations that may hurt resale value

Itching for a home upgrade like new paint, flooring or even an entire remodel?

Whether you want an updated look, to fix what no longer works or an opportunity to flex your DIY skills, you hope to see your renovation pay off down the line — especially if you take out a loan to cover the costs.

Before you jump into your renovation and knock down the kitchen wall or add a backyard patio, it's important to consider whether the related costs are going to boost your home's resale value later on.

Graphic with the heading, "Maximize resale value." Text underneath reads: The value renovation projects add to your home can vary. We ranked these common upgrades by the average return on investment. 1. Update kitchen finishings. 2. Refinish or install hardwood floors. 3. Add a wooden deck. 4. Upgrade a bathroom. 5. Add a second bathroom.

Key kitchen renovations

In general, a kitchen remodel can be a great way to boost the value of your home. Giving the space a facelift — like painting the walls and kitchen cabinets, updating countertops, and/or replacing the flooring — has the highest potential out of any room in your home to recoup the renovation cost when you go to sell.

That being said, more extensive kitchen renovations may not yield as high of a return on investment (ROI). Chances are an upscale major kitchen remodel will be more costly than a simple facelift, and you'll be much less likely to get all of that money back when you sell your home. Before splurging on luxury appliances, hardwood floors and granite countertops (and maybe an interior designer to help it all come together), get a feel for what other, similar homes nearby offer.

More extensive kitchen renovations may not yield as high of a return.

Maximize bathroom appeal

Behind kitchens, bathroom remodels are the most popular interior renovation project for homeowners. Smaller improvements, such as replacing fixtures and revamping tile, are more likely to pay off than upscale renovations. Avoid changes to the plumbing, excessive tiling and inadequate lighting to keep up the aesthetics and functionality.

If you're thinking about a bathroom addition, know the average seller only makes back about a third of the money they spend on this major project. Even so, the return on investment for a bathroom renovation or a bathroom addition can vary depending on your market and on what your home already offers. For example, if your house has one bathroom and others in your area have at least two, creating an additional bathroom could be a smart move.

Elevate your home's exterior

If you want to increase your home's value, adding some outside square footage might be the way to go. The addition of a wood deck can recoup more of the costs than other types of additions to your home.

To get the biggest bang for your buck from your home's exterior, focus on projects like upgrading an old garage door, swapping out the front door or replacing aging vinyl siding.

Not all outdoor features are created equal. While a backyard pool might make you a popular neighbor, it can go both ways when it comes to resale value. It's largely dependent on your market. Some buyers aren't interested in the upkeep and costs involved with maintaining a pool, and some also view it as a safety hazard. A pool is more likely to be seen as an asset in hot and humid climates and in high-end neighborhoods.

Increasing living space

Adding an entirely new space to your home can be an expensive project. Even with the new square footage, there is no guarantee you will earn back the money you spend.

If you're thinking about adding a sunroom rather than going all in on a full-room addition, keep in mind sunrooms are not usually included in a home's square footage, which is what appraisers use to determine a home's value.

If possible, you might consider finishing your attic or basement. And the more versatile you can make the space, the more future buyers could be attracted to it. An area that can act as a playroom, office, guestroom or even an in-law suite ? Score.

DIY vs. hiring professionals

Before deciding whether to DIY or hire a contractor, consider the scope of your project, including the costs, timeline and difficulty of the work. A small job like repainting a bedroom may be a good fit for you to tackle on your own while a more extensive renovation like a full kitchen remodel is likely best left to professionals.

Renovate the right way

Home upgrades can make your living space more beautiful, functional and enjoyable. Whether you DIY, hire professionals or choose a combination of both, be sure to consider which projects are worth the time, effort and money to you.

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