Seller's Guide: Home Improvements with the Best Return on Investment

By Alex Long

Posted on September 2nd, 2022
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Homeowners preparing to list their homes for sale often wonder which projects they should complete to either increase the value of their home or decrease the number of days on the market. By asking yourself a few simple questions about the circumstances surrounding your home sale, you can determine which projects will provide the highest return on your investment.

What’s the market like?

Determining whether it’s a buyer’s or seller’s market can guide your decision-making process as you decide which projects to tackle. If it’s a seller’s market, you may be able to realize the highest return by simply cleaning, decluttering, and staging appropriately.

If it’s a buyer’s market, you may have to go above and beyond to keep the days on the market low. In this case, your highest return on investment will come when you update your bathrooms, kitchen, and finishes throughout the home, such as light fixtures and cabinet pulls.

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Who is your target buyer?

If you have a home in the suburbs, your target market is likely young couples and families. In this case, investing in turning an office into a third bedroom by adding a closet will have a high return on investment, because it makes the home desirable to the larger number of buyers seeking a home in your neighborhood.

However, if you live in an upscale condo above a downtown bar, converting a second bedroom to an office or entertaining space might increase your return on investment by appealing to young, single buyers.


What do the comps look like?

Knowing your neighborhood is a simple way to determine where your highest ROI might be. If your house is the only one on the block that has a crumbling driveway and poor landscaping, how will you convince a potential buyer to step inside? In this case, you’ll realize a high return on investment if you tackle the curb appeal to meet the expectation of the those looking in your neighborhood.

On the other hand, if all the houses in your community are run-down starter homes, investing in upgrades can put your home in a limbo of sorts. You don't want to be in a position where those looking in the area can’t afford your house, and those who can afford it wouldn’t purchase in the neighborhood.

To summarize, 3 guiding principles to follow when determining which projects to tackle for the highest return are:

  • Be conservative in a seller’s market and ambitious in a buyer’s market; focus on kitchen and bathroom updates.
  • Create the ideal home for your target buyer; choose projects that are important to them.
  • Match the neighborhood; choose the projects necessary to match the comps.

With planning and a little research, you can recoup the funds you invested into home improvement projects.

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Posted in Home Improvement, Preparing to Sell Your Home