When homeowners think about upgrading their property, one big question often comes to mind: “Does remodeling actually increase home value?” The answer isn’t as simple as yes or no. Some remodeling projects can give you a significant return on investment (ROI) when it’s time to sell, while others may cost more than they add in value.
Now, we’ll break down the connection between remodeling and property value, highlight the best projects to consider, and share expert insights to help you decide if remodeling is the right move for your home.
What Does Remodeling Mean in Real Estate?
Before diving into numbers, it’s important to understand what “remodeling” actually means in real estate.
- Remodeling vs. Renovation: Remodeling usually involves changing the structure, layout, or functionality of a space—for example, turning a closed kitchen into an open-concept layout. Renovation, on the other hand, focuses on restoring or repairing what already exists (like repainting walls or fixing floors).
- Why it matters: Buyers and appraisers typically view remodeling as an upgrade that adds value, while simple renovations may only preserve existing value.
- Common remodeling projects homeowners consider before selling include kitchen updates, bathroom upgrades, basement finishing, or exterior improvements for curb appeal.
The Link Between Remodeling and Home Value
So, does remodeling always lead to higher resale value? The short answer: It depends.
Several factors determine how much value your remodel will add:
Location: A remodeled kitchen in a high-demand city like New York may boost value significantly, while the same remodel in a rural town may not yield the same return.
Type of project: Practical and universally appealing upgrades tend to deliver higher ROI than luxury or personalized remodels.
Quality of work: Professional remodeling usually adds more value than DIY jobs.
Market trends: When buyer demand is high, remodeled homes sell faster and for higher prices.
According to Remodeling Magazine’s Cost vs. Value Report (2023), the average ROI for remodeling projects ranges from 50% to 85%, depending on the project type.
High-ROI Remodeling Projects That Boost Home Value
Not all remodels are created equal. Here are the projects that typically provide the highest returns when selling:
1. Kitchen Remodels
- Minor remodels (new countertops, cabinet refacing, upgraded appliances) can yield up to 81% ROI.
- Major remodels (full layout changes, luxury finishes) usually bring less ROI, around 50–60%, but they can help sell the home faster.
2. Bathroom Upgrades
Modern bathrooms are a top priority for buyers.
- Adding energy-efficient fixtures, walk-in showers, or double vanities can add significant value.
- Average ROI: 60–70%.
3. Adding Living Space
- Finished basements, attic conversions, or home additions create functional square footage that buyers love.
- ROI can range from 55% to 75%, depending on the type of space added.
4. Curb Appeal & Exterior Remodeling
- First impressions matter. Projects like new siding, stone veneer, garage doors, and landscaping often return 70–80% of the cost.
- Buyers often decide within seconds if a home “feels right.”
5. Energy-Efficient Upgrades
- Solar panels, insulation, and smart home systems are increasingly popular.
- Not only do they lower energy bills, but they also appeal to eco-conscious buyers.
- ROI varies by region but can reach 60–80%.
Remodeling Projects That Don’t Always Pay Off
While some remodels boost value, others may actually hurt resale potential if done wrong.
- Over-Customized Remodels: A home theater with luxury seating may suit you but could turn away buyers.
- Luxury Upgrades in Low-Demand Areas: Installing a $100,000 kitchen in a neighborhood where homes average $250,000 won’t deliver ROI.
- High-Cost Additions: Swimming pools, spas, or wine cellars rarely provide strong returns.
- DIY Remodel Mistakes: Poor workmanship can reduce value and scare off buyers.
Cost vs. Value: What Homeowners Need to Know
Remodeling is an investment—but not every dollar you spend comes back at resale.
- Example: If you spend $20,000 on a kitchen remodel, you may recoup $16,000–$17,000 at resale, depending on your market.
- Set realistic expectations: Remodeling improves both livability and marketability, but few projects deliver a 100% return.
- Timing matters: Remodeling right before listing may maximize ROI, while remodeling years in advance means you get to enjoy the updates personally before selling.
Expert Insights: Realtor & Appraiser Perspectives
Real estate professionals consistently emphasize:
- Remodeling adds value when it aligns with buyer expectations in your market.
- Case Study Example: A minor kitchen remodel in Dallas helped a home sell for $35,000 above asking price, compared to similar non-remodeled homes.
- Appraisers also consider remodeling in property valuation but focus on functionality, quality, and comparable sales in the neighborhood.
How to Decide If Remodeling Is Worth It for You
Before starting, ask yourself:
- Am I remodeling for personal enjoyment or resale value?
- Does the project fit with the value range of my neighborhood?
- Will buyers in my area pay extra for this remodel?
- Do I have the budget to do it professionally?
Alternative approaches: Sometimes small updates like painting, deep cleaning, and home staging can improve resale value without major remodeling costs.
Tips for Maximizing Remodeling ROI
If you’re remodeling with resale in mind, keep these strategies in mind:
- Focus on function over flash. Buyers want kitchens, bathrooms, and storage—not luxury extras.
- Hire licensed professionals. Poor workmanship lowers value.
- Keep remodels in line with neighborhood standards. Avoid over-improving compared to surrounding homes.
- Document your remodel. Keep receipts, permits, and warranties—buyers value proof of quality work.
Conclusion
So, does remodeling increase home value?
Yes—but with conditions. The type of project, your local market, and how well the remodel is executed all play a role in determining ROI.
- High-value remodels like kitchens, bathrooms, and curb appeal improvements can yield strong returns.
- Luxury, over-personalized remodels may not pay off.
- Strategic remodeling not only boosts resale value but also improves your comfort while living in the home.
If you’re planning to sell, focus on cost-effective upgrades that align with buyer demand in your area.
FAQs About Remodeling Increase Home Value
Does remodeling always increase resale value?
Not always. Only certain projects consistently boost value, while others may not deliver a return.
What remodel adds the most value to a home?
Kitchen and bathroom remodels, curb appeal upgrades, and energy-efficient improvements usually rank highest.
Is it better to renovate or sell as-is?
If your home is outdated or has maintenance issues, remodeling key areas can make it more appealing. Otherwise, small fixes and staging might be enough.
How much should I spend on remodeling before selling?
Experts suggest spending no more than 10–15% of your home’s value on remodels if your goal is resale.
Do small remodels like painting or flooring increase home value?
Yes, cosmetic updates like painting, flooring, and lighting can make a big difference in buyer perception, even if they don’t drastically raise appraisal value.