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5 Home Improvement Projects That Give You the Best Return on Investment in 2018

By Matthew Frankel, CFP® – Mar 4, 2018 at 7:51AM

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Here are five great ways to add value to your home, and five more that generally don’t pay off as well.

Are you considering doing some home improvements this year? Doing a home remodel has a double benefit -- you not only get to enjoy a new kitchen, patio, or other improvement, but you can also add value to your home.

However, not all remodeling projects give you the same return on investment. The average home remodeling project added just 56.8% of its cost to the value of the home in 2017, according to Remodeling's 2018 Cost vs. Value report, which analyzed 20 common professional remodeling projects.

On the other hand, if you spend your home improvement dollars on one of these high-return projects, you could greatly improve the quality of your home while substantially increasing its value.

Couple looking at paint samples and other remodeling materials.

Image Source: Getty Images.

The top five cost-versus-value remodeling projects of 2018



Resale Value Added

Cost Recouped

Garage door replacement (upscale)




Manufactured stone veneer (midrange)




Deck addition -- wood (midrange)




Minor kitchen remodel (midrange)




Siding replacement (midrange)




Data source: Remodeling 2018 Cost vs. Value Report.

Don't expect a huge return from these five projects

On the other end of the spectrum, some projects generally don't add nearly as much value to your home:



Resale Value Added

Cost Recouped

Backyard patio (midrange)




Master suite addition (upscale)




Major kitchen remodel (upscale)




Bathroom addition (upscale)




Bathroom remodel (upscale)




Data source: Remodeling 2018 Cost vs. Value Report.

General trends to notice

There are two general trends to notice in these charts.

First, exterior projects that create "curb appeal" generally produce higher returns than interior projects. Of the highest-return projects, four of the five are exterior modifications. And of the lowest-return projects, all five are either interior projects, or projects hidden away from view, such as the backyard patio. This certainly makes sense -- curb appeal doesn't just add value to your home, but it can help it sell more quickly, too.

Second, if you want to add value, don't go too over the top. Midrange projects tend to add more value, in percentage terms, than upscale ones. All four interior projects on the low-return list are of the upscale variety, and notice the huge gap in returns between a minor mid-range kitchen remodel and a major upscale kitchen remodel.

Every project and location is different

As a final thought, keep in mind that these figures are just based on national averages, and that your particular project could have significantly different results. For example, a minor kitchen remodel is not likely to add much value if the existing kitchen is just fine. On the other hand, if the existing kitchen is falling apart, your return could be even more than the 76.7% indicated on the chart.

Geography can play a role as well. In warmer climates, outdoor spaces such as backyard patios and even swimming pools can add far more value than they do in markets where they're useful only a few months out of the year.

Also, in "hotter" real estate markets, remodeling projects tend to deliver more value. For example, of the 149 U.S. markets the report tracked, an upscale garage door replacement returned more than 100% of its value in 46 of them. In fact, of the 20 projects examined in the report, 18 of them delivered more value than their cost in at least one U.S. market. (Note that Remodeling's report contains an infographic that breaks down the data geographically.)

The bottom line is that while these trends can certainly be useful when planning your next remodeling project, be sure to consider the specifics of your own situation as well.

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