Top Five Home Improvements With Best Return on Investment

June 16, 2012 | Home Improvement and Renovation

Many people wonder which are the home improvements with best return on investment (ROI). These improvements can be in the context of when people are planning to sell their home, or just looking to invest wisely in a property they plan to keep living in. The top five improvements are different depending on which data you review.

Kitchen Renovation - One of the home improvements with best return on investmentBathroom Renovation - A Home Improvement that provides good return on investment







According to data from a Canadian mortgage company, renovations with a 75-100% ROI include:

  • Kitchen, Bathroom, and Basement Renovations
  • Window and Door Replacements
  • Interior and Exterior Painting (For information on 2012’s on-trend interior colours, click here)
  • Flooring
  • Upgrading or Replacing Heating Systems

Window Replacement - A Home Improvement that yields good ROI

Front Door Replacement - A Home Improvement that yields good ROI

The Appraisal Institute of Canada listed these Returns on Investment for the specified home improvements:

  • Bathroom Renovation (75% – 100%)
  • Kitchen Renovation (75% – 100%)
  • Exterior Paint (50% – 100%)
  • Interior Paint (50% – 100%)
  • Windows and Door replacement (50% – 75%)

This list matches up pretty closely with the first list.

For people who are looking for do it yourself projects that don’t require as much of an investment, yet increase the value of your home, here are the top five according to the 2011 HomeGain survey of about 600 realtors across the United States.  In many areas, these top five do-it-yourself projects are included under the umbrella of Home Staging.

  • Cleaning and De-cluttering the home takes the number one spot and has ranked at the top of the list since the survey began in 2003.  The ROI for this home improvement is 586%.  This is based on an average cost of $209 to do the job and an average benefit of $1990.   This improvement is recommended to home sellers by 99% of realtors.
  • Lighten and Brighten delivers the second best ROI at 313%.  For the past few years, it has played leap-frog with number 3, but regained the upper hand this year.  The average cost was $375 with a benefit of $1550.  The basic idea is to paint a room a lighter color or to update light fixtures so that the home feels light and open, which is much more welcoming to the buyer.
  • Home Staging follows right on the heels of Lighten and Brighten with an ROI of 299% in 2011.  The average cost for do it yourself home staging is listed $550 with a benefit of $2194.  Many things were included in the staging a home in this survey, such as grouping furniture properly, accenting artwork or re-hanging it in a more interesting way, painting walls, filling a vase with flowers and so forth.  For information on our home staging services, click here.
  • Landscaping may not be an improvement you had thought about, but with an ROI of 258%, it is definitely a winner on this survey.  The main goal is to improve curb appeal.  The average cost of landscaping was $540, with a benefit of $1932.
  • Electrical and Plumbing Repair comes in at number five with a 181% ROI.  With average costs of $535 and a $1505 benefit.

As you can see, while there are some differences in the relative ranking of the home improvements with best return (ie: the top ROI), they each deliver solid returns and can have a significant impact on home value.  Implementing some or all of these improvements can help a home to sell more quickly and likely support a higher asking price.  For the more significant projects such as kitchen and bathroom renovations, it may be wise to consult with a professional to be sure that you are making changes that reflect modern styles and will have a greater chance of increasing your return on investment.

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