Home Improvement and the ROI When You Sell Your Home

Home improvement

Home improvement can include any renovation, repair or upgrade to a dwelling or the land on which it is located. It can also refer to the remodeling of rooms within a dwelling, such as kitchens or bathrooms, or to the construction of additions on a house. It can also refer to outdoor projects, such as landscaping or building a deck. Home improvements can be expensive, but they can also provide a good return on investment when you sell the house.

Homeowners spent an average of $7,746 in home improvement projects over the past two years, according to the NerdWallet 2022 Remodeling Impact Report. This reflects a significant increase from the previous decade, when homeowners sank an average of $3,338 per project.

However, the COVID-19 pandemic did not entirely fuel this boom in spending. NerdWallet’s 2022 survey revealed that most homeowners who took on home improvement projects during the pandemic were doing so to make their homes more comfortable and livable, rather than to boost their home’s value.

What’s more, homeowners who take on major home improvement projects often don’t expect to recover all of their costs when they eventually sell the house. For this reason, real estate experts recommend that you prioritize your own comfort and needs when deciding which home improvement projects to undertake. It is also important to consider how long you plan on living in your current home, which can help you determine which projects will be worth the investment and which might be better left as DIY projects.

In NerdWallet’s 2022 survey, nearly all (95%) homeowners said they are considering one or more home improvement projects in the next two years. Of these, 42% say they’re thinking of painting a room and 24% are considering updating light fixtures. Other popular plans are to build a deck or put up a fence.

These projects can be costly, but they also might provide the highest returns on your investment when you sell your home. In fact, according to a NerdWallet study on the best home improvements, these projects typically deliver an ROI of at least 70%.

The projects surging the most during the recent economic downturn were more modest in scope and more oriented toward home’s exterior, with people renovating their driveways, adding garden beds and fixing fencing, landscaping and roof repairs. Rock-bottom interest rates have made these types of projects even more attractive.

While the majority of planned improvements are geared toward making a house more comfortable and functional, 20% of those planning projects say they’re doing it to improve their home’s value before selling. While this is a common reason to improve a house, it’s worth keeping in mind that many potential buyers will have their own priorities when choosing which home to buy. If your improvements are too personalized, don’t fit the taste of the neighborhood or are out-of-character with the overall style of your area, they might not add much value. The best way to avoid this is by choosing projects that will appeal to most buyers in your area.