What Specific Home Improvements Have the Best ROI?

Introduction

When most people think about home improvements, they imagine fresh paint, shiny new appliances, or a stylish bathroom. While those upgrades certainly make living more enjoyable, the best renovations are also smart financial moves. The truth is, every dollar you spend on your home is an investment and like any investment, you want to know what your return will be.

In real estate, this return is known as ROI (Return on Investment). The concept is simple: you calculate how much a particular renovation increases your home’s resale value compared to what it cost you. For example, if you spend $20,000 on a kitchen remodel and it increases your home’s value by $15,000, your ROI is 75%.

Some renovations give you a surprisingly high return, while others, despite looking beautiful, barely pay for themselves when you sell. The key is knowing which is which.

At LB Group, we’ve spent years helping homeowners strike the perfect balance between personal enjoyment and financial sense. We’ve seen projects that transformed a property’s market value and others that, while stunning, simply didn’t deliver financially. In this guide, we’ll walk you through the home improvements that typically offer the best ROI, why they matter, and how to avoid common pitfalls.

Why ROI Matters in Home Renovations

Understanding the Basics

ROI matters because renovations are rarely cheap. A single remodel can cost tens of thousands of dollars, so it’s important to know which projects are worth your time and money.

High-ROI improvements mean:

• You recover a large portion of your costs when you sell.
  
• Your home becomes more appealing to buyers, potentially selling faster.
  
• You improve your living space in a way that also boosts equity.
  

Low-ROI improvements, on the other hand, might be highly personal (like installing a luxury wine cellar) and may only appeal to a small segment of buyers.

Market-Driven vs. Personal Taste

There’s a big difference between renovations for yourself and renovations for the market. If you plan to stay in your home for decades, your preferences might take priority. But if you’re renovating with an eye on resale within 1–5 years, market-driven decisions will serve you better.

For example, painting your home in trendy, bold colors might feel exciting, but most buyers prefer neutral tones that make it easy to visualize their own décor.

High-ROI Renovations to Consider

A. Kitchen Remodels – The Heart of ROI

It’s no secret that kitchens sell homes. According to Remodeling Magazine’s Cost vs. Value report, a mid-range kitchen remodel can recoup around 70–80% of its cost on resale.

Why kitchens have high ROI:

• They’re the most frequently used space in the home.
  
• Buyers often judge a property by its kitchen first.
  
• Functional, updated kitchens make the rest of the home feel more modern.
  

Mid-Range vs. Luxury Remodels

• Mid-Range: Updating cabinets, replacing countertops, adding energy-efficient appliances, upgrading lighting. Cost: $15,000–$40,000. ROI: 70–80%.
  
• Luxury: High-end appliances, custom cabinetry, premium materials like marble. Cost: $50,000–$100,000+. ROI: Often lower (60–65%) because luxury finishes may not appeal to all buyers.
  

Pro Tip from LB Group:
We’ve found that a smart kitchen remodel isn’t about spending the most money, it’s about choosing upgrades with broad appeal. For example, quartz countertops are durable, attractive, and less expensive than marble, yet they often impress buyers just as much.

B. Bathroom Upgrades – Small Space, Big Impact

Bathrooms are another high-value area for improvements, with ROI often between 60–70%. Buyers are willing to pay more for a home with modern, clean, and stylish bathrooms.

Popular upgrades include:

• Installing a walk-in shower with glass doors.
  
• Upgrading to water-efficient fixtures.
  
• Adding better lighting and ventilation.
  
• Replacing outdated tiles with neutral, modern designs.
  

Even small changes, like swapping out old faucets or adding a new vanity mirror, can make a big difference.

LB Group Insight:
In many of our projects, simply improving the bathroom layout such as adding a double sink in the master bath has made the space feel far more functional and appealing to buyers.

C. Curb Appeal Enhancements – First Impressions Count

Real estate agents often say: “You only get one chance to make a first impression.” Curb appeal is that first impression. Enhancements here can yield an ROI of 60–70%, and in some cases, even higher because they can help sell the home faster.

Curb appeal upgrades include:

• Fresh exterior paint.
  
• Professional landscaping.
  
• New front door or updated hardware.
  
• Pressure washing driveways and pathways.
  

Why it works: Buyers make emotional decisions within seconds of seeing a home. If the exterior is inviting, they’re more likely to see the interior in a positive light.

Example:
One LB Group client saw immediate interest from buyers after we replaced their dated wooden door with a sleek, energy-efficient steel option and refreshed their landscaping with low-maintenance native plants.

D. Energy-Efficient Improvements – Green is Gold

Today’s buyers are increasingly conscious of energy efficiency, not only for environmental reasons but also for cost savings. Many energy-efficient upgrades come with an ROI of 60–80%, and they often help homes stand out in competitive markets.

High-ROI energy improvements include:

• Upgrading insulation.
  
• Installing double- or triple-pane windows.
  
• Adding solar panels.
  
• Replacing old HVAC systems with energy-efficient models.
  

Extra benefit: Some of these upgrades qualify for tax credits or rebates, further boosting their value.

LB Group Observation:
We’ve worked with homeowners who saw lower utility bills immediately after insulation and window upgrades, a strong selling point during showings.

E. Basement & Attic Conversions – Unlocking Hidden Space

If your home has unused attic or basement space, converting it into a livable area can yield an ROI of 65–75%. Buyers love extra square footage, especially if it can function as a bedroom, home office, or entertainment area.

Tips for maximizing ROI:

• Keep designs flexible so future owners can adapt the space.
  
• Ensure the area meets building codes (particularly for bedrooms).
  
• Focus on comfort, good lighting, insulation, and ventilation matter.
  

LB Group Tip:
We’ve found that basement conversions often appeal to multi-generational families looking for more living space without expanding the home’s footprint.

Avoiding Low-ROI Renovations

Not every improvement will pay off. Some upgrades are too personalized or too expensive relative to the home’s value.

Common low-ROI projects:

• Luxury pools in moderate climates.
  
• Specialty rooms (wine cellars, home theaters) that appeal to niche buyers.
  
• Overly customized designs that limit appeal.

Tips to Maximize ROI on Renovations

1. Work with Experienced Contractors
   
   • Skilled professionals ensure the job is done right the first time.
     
   • Poor workmanship can actually reduce value.
     
2. Stick to a Budget
   
   • Avoid overcapitalizing or spending more than you can recoup.
     
3. Choose Neutral Designs
   
   • Appeal to the widest range of buyers.
     
4. Prioritize Functional Upgrades First
   
   • Fix structural issues or outdated systems before cosmetic changes.
     
5. Time Your Renovations
   
   • Renovate well before selling so you can enjoy the improvements too.

Smart Technology Upgrades – Modern Comfort with Market Appeal

Technology in homes is no longer a luxury; for many buyers, it’s an expectation. Smart home features offer convenience, safety, and energy efficiency, which can all translate into higher perceived value and ROI.

Examples of high-ROI smart upgrades:

• Smart Thermostats: Help regulate energy use, save money, and appeal to eco-conscious buyers.
  
• Video Doorbells & Smart Locks: Security is a top priority, and these features are often at the top of buyers’ wish lists.
  
• Smart Lighting Systems: Adjustable lighting can set the right mood and save on electricity bills.
  

Why it works:
Buyers often see a smart-enabled home as “move-in ready” and modern, reducing the need for immediate upgrades after purchase.

LB Group Insight:
We’ve incorporated smart home systems into many renovations, and buyers frequently highlight them as a deciding factor in choosing one home over another. Even a relatively inexpensive smart thermostat installation can make a listing stand out online.

Also read: What Home Improvements End Up Paying for Themselves?

Flooring Improvements – The Foundation of First Impressions

Flooring is one of those elements that instantly communicates a home’s quality. Worn carpets, cracked tiles, or dated vinyl can make an otherwise beautiful home feel tired. Upgrading flooring can deliver an ROI of 50–80%, depending on the materials chosen.

Popular high-ROI flooring choices:

• Hardwood: Timeless, durable, and highly desirable. Refinished hardwood can often yield nearly as much ROI as installing new boards.
  
• Luxury Vinyl Plank (LVP): Offers the look of wood at a lower cost and with excellent durability.
  
• Porcelain Tile: Ideal for bathrooms and kitchens, adding elegance and easy maintenance.

Why it works:
Flooring covers a massive visual area in a home, so upgrading it can completely transform a space without changing its layout.

Conclusion – Making Every Upgrade Count

Renovations can be both exciting and profitable, if you choose wisely. Kitchens, bathrooms, curb appeal upgrades, energy efficiency, and space conversions consistently rank as high-ROI projects.

By focusing on these areas and avoiding overly niche or expensive upgrades, you can enjoy your home now while also boosting its future value.

At LB Group, we’ve guided countless homeowners through this process, helping them make improvements that deliver both beauty and financial return. The right renovation doesn’t just transform a property, it transforms the way you feel about your home and its potential.

Sunny Saini

Sunny Saini is a certified heating engineer with over 15 years of experience in maintaining and repairing boilers. He specializes in diagnosing complex boiler issues and providing reliable solutions to ensure homeowners stay warm and comfortable throughout the year.