What are the best home improvements to increase value? Our honest list is short: curb appeal projects first (the garage door, the entry door, siding, landscaping), then a kitchen and bathrooms brought up to the standard of the neighborhood, then the unglamorous functional items, roof, plumbing, windows, whose absence scares buyers off. Above all of it sits one rule that sorts every project before you spend a dime: you almost never get a dollar back at resale for a dollar you put in. Improvements pay when they move a home from below its market to at its market. They lose money when they move a home from nice to nicer. Jeb has sold 450+ homes, a stretch of them bank-owned foreclosures in the downturn years, and Josh spent the years after the 2008 crash flipping neglected houses, so this list comes from resale results we have been paid on and been burned by, not from a renovation show.
The flipping years are the cleanest proof of where renovation profit actually lives: in buying the ugly house at a deep discount, the one that needed two bathrooms, a kitchen, flooring, doors, maybe stucco and a roof, and taking it from the worst home in the neighborhood to the best one. From subpar to market is where the return hides. Past market, every additional dollar is consumption, and consumption is fine as long as you call it what it is.
Two examples from our own houses. Jeb replaced his kitchen about five years after buying, and the return was low for a simple reason: the kitchen that came with the house was maybe seven to ten years old, functioned perfectly, and was merely not his taste. Had it been the original 1976 kitchen, dated appliances and all, the same remodel would have moved the home's value meaningfully, because it would have closed a real gap to the market. Josh's wife wants to redo their hall bath for the third time, a project that would land around $60,000, and the market would value the house not one dollar higher for it. They would enjoy it more. That is the entire return.
You will see industry studies assign precise recovery percentages to each project, a 91% return on a minor kitchen remodel and so on. Treat the decimal points with suspicion. Those are averages across homes that needed the work. We have both watched owners put a $125,000 kitchen into a house whose price range justified $50,000 to $60,000, and there is no world in which they see 90% of that back.
Pull up the industry's annual cost-versus-value rankings, the report we walked through on the episode, and read the top of the list: garage door replacement, manufactured stone veneer, entry door replacement, siding replacement, a minor kitchen remodel, window replacement, then bath remodels and roofing. Notice the pattern. Almost everything above the kitchen is curb appeal.
There is a mechanical reason for that. Exposure drives demand, and demand drives price. If the outside of a home is ugly, a share of buyers never stops the car, and the ones who do walk in already skeptical. People buy emotionally and justify logically: they pull up and either picture their kids in the front yard and the holiday decorations going up, or they picture a project. A seller wants the warm response from the sidewalk, because that emotional yes is what turns into a stronger offer. The same logic explains why a great kitchen and clean bathrooms carry the interior: that is where buyers imagine actually living, and where they spend when family comes over.
The right renovation budget is set by the home's price point, not by the catalog. A $2.5 million Newport Beach house probably does need a $125,000 kitchen. Put that same kitchen in a $750,000 Anaheim house and it will be a joy to cook in and a loss to sell, because buyers at that price point will not pay for it. Appropriate beats impressive.
Balance matters just as much as budget. A home should be well-rounded rather than spectacular in one room and dated everywhere else: the beautiful modern kitchen loses its power when the living room still has shag carpet and every door wears a brass-ball handle from 1978. Jeb walks into listings like this constantly, homes whose photos led with one stunning kitchen because the rest of the house could not carry a photo. Buyers average the whole house, so spread the improvement evenly instead of over-improving one corner of it.
On style, resist the urge to install every current trend at once. Hardware fashion alone has cycled from brushed nickel to matte black to bronze within recent memory, and each was briefly mandatory. A house that mashes five trends together reads as Franken-style within a few years. We are not telling you to sand everything down to beige; we are telling you to stay a step back from the bleeding edge, favor timeless choices on the expensive surfaces, and let the trendy pieces be the cheap, swappable ones.
Roofs, plumbing, heating and air, windows. Nobody falls in love with a new roof, but every buyer notices a tired one and prices their fear into the offer, because they see leaks and a five-figure bill coming. Plenty of 1950s and 1960s homes in our Southern California market still carry original galvanized plumbing, and buyers flinch at it. These purchases are the new tires of homeownership: real money, nothing looks different afterward, and you only regret skipping them. As of this episode, 4/25/2023, a roof in our market ran roughly $15,000 to $30,000 and a repipe roughly $5,000 to $15,000; project costs and the loan pricing later in this article drift over time, so treat those as snapshots. Single-pane aluminum windows are the same category with a comfort bonus, since even mild-winter buyers can feel a drafty house.
Paint and carpet is the one place we disagree a little, and the disagreement is useful. Josh files them under polish: inexpensive freshening that helps buyers see the bones of the house without changing the house. Jeb, after years of selling bank-owned homes where paint and carpet were the only improvements the bank would approve, has watched listings go from walk-out-the-door awful to genuinely competitive on those two items alone. Both are true, and the difference is the starting point: the worse the current condition, the more transformative the cheapest cosmetics become.
A few special cases from the episode. Removing a wall adds no square footage, yet it can change how a home flows and feels enough to change how buyers respond to it. Additions and ADUs can add real value, but run the cost per square foot honestly first: Jeb has priced a roughly 120-square-foot addition connecting his house to his detached garage at $75,000 to $100,000, a number that makes sense for how his family lives and almost certainly does not pencil as resale math. If an accessory unit is the version you are weighing, start with what an ADU really involves before you fall for the rental-income pitch. Solar adds value to exactly the buyers who want it: some do, some want no part of the maintenance, and a leased system that must transfer can complicate a sale, so think hard before signing. Smart-home touches, a modern thermostat, keyless locks, app-controlled lighting, are cheap and get noticed on tours far out of proportion to their cost.
Buyers comparing a fixer to a turnkey model match make the same mistake sellers make, in mirror image. The renovated model match closed at $1 million and the dated one needs $250,000 of work, so buyers expect the dated one to go for $750,000. It will not. Fixers sell at discounts smaller than the cost of the work, often much smaller: $200,000 of needed improvements might buy you $100,000 off, or $60,000 to $70,000 off in a tight market.
The reason is that most buyers arrive with just enough cash for the down payment and closing costs and nothing left for renovations, so demand piles onto the homes that need nothing. The turnkey top 10% to 20% of listings, priced correctly, sell fast and often with multiple offers even when the broader market is soft. Which points at the actual opportunity: the dated home sitting longer with a motivated seller can be where the value hides, if you have the cash, the vision, or the loan to close the gap. If you find one, negotiating a fixer's price is its own skill, and the leverage is real precisely because most buyers cannot touch the project.
Owners have four main tools, and the right one depends on the rate you already have. A cash-out refinance funded a huge share of remodels in 2020 and 2021, when it could lower the rate and pay for the kitchen in one move; it is a poor trade for an owner whose existing rate sits far below the market, because it reprices the entire loan to fund one project. A home equity line of credit keeps your first mortgage untouched and lets you borrow only what the project actually costs, at the price of a variable rate: after the string of Federal Reserve hikes leading into this episode, HELOC pricing was close to double digits even for strong borrowers. A fixed-rate second lands in between, with certainty on the rate but less flexibility on the amount. We compared the first two side by side in HELOC vs home equity loan, and the full mechanics of the refinance route live in how refinancing works.
Buyers get a fourth tool: renovation loans. The FHA 203(k) and Fannie Mae HomeStyle programs finance the purchase and the improvements in a single loan that ends as a normal 30-year fixed, which is how one of Josh's clients, a contractor priced out of the move-in-ready market, could pursue a roughly $450,000 distressed house needing about $300,000 of work without having $300,000 in the bank. Confirm current program requirements with a lender, since guidelines change. Sorting out which structure fits your equity, your existing rate, and your budget is exactly the kind of positioning we work through on a free Roadmap call: about 20 minutes, and you leave knowing the real cost of each option instead of guessing.
Everything above assumes a sale is coming. If it genuinely is not, return on investment loses its grip on the decision. Josh, looking at the next few decades in a house he may never leave, can justify projects the resale math would reject, and Jeb's expensive little addition follows the same logic: the value is space for the kids and years of daily use, not a line on a future appraisal. Time in the home is the variable that forgives almost any renovation, the same way it forgives an imperfect purchase price, which is the whole argument of the long-game case for real estate.
And if a sale is coming, sequence matters twice. First, ask a local agent what your specific market rewards before you spend: when inventory is scarce, buyers overlook missing upgrades because they have no options, and when inventory is heavy, the same upgrades are what separate your home from the one down the street. Second, steal the joke Jeb and his wife share about every pre-sale remodel: if you were willing to do it to sell the house, you should have done it two years ago and actually lived in it.
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Find my agent →Curb appeal leads the industry's cost-versus-value data year after year: garage door replacement, entry door, siding, stone veneer, and windows, followed by a modest kitchen remodel and bathroom updates. The mechanism is exposure, since more buyers stopping the car means more demand and a stronger price. Inside, kitchens and baths matter most because they are where buyers picture living. The catch is that recovery percentages are averages for homes that needed the work.
Anything that improves a home past what its price point supports. A luxury kitchen in a mid-priced neighborhood, a third remodel of an already-fine bathroom, or a small addition at a huge cost per square foot will be enjoyable and unprofitable. The market pays to bring a home up to standard, and pays very little extra beyond it. If you are staying for decades, that can still be money well spent, as enjoyment rather than as investment.
Ask a local agent what your market rewards first, because the answer changes with inventory. When listings are scarce, buyers overlook dated finishes and major pre-sale projects rarely pay; when buyers have many options, condition is what separates homes. Paint and carpet are the reliable exception, cheap enough to almost always make sense on a tired house. And if a project is worth doing to sell, it was probably worth doing years earlier so you could enjoy it.
Only for the buyers who want them, which makes solar one of the least predictable improvements. An owned system appeals to some buyers, while others want no part of the maintenance, and a leased system that has to transfer to the new owner can genuinely complicate a sale. If you are considering panels, weigh the energy savings on their own merits over your expected years in the home rather than counting on resale value to repay the install.
Owners typically choose among a HELOC (flexible, variable rate), a fixed-rate second mortgage, or a cash-out refinance, which only makes sense when it does not reprice a low existing first mortgage. Buyers can use renovation loans like FHA 203(k) or Fannie Mae HomeStyle to finance a fixer and its repairs in one 30-year mortgage; confirm current program requirements with a lender. The right tool depends on your current rate, your equity, and how certain the project budget is.