Personal Finance

The 8 Home Renovation Projects That Generate the Best ROI

Dana George

Published: March 13, 2025 2:41 pm

There are many reasons people renovate their homes. Quite often, it’s for personal enjoyment and comfort. Sometimes, a homeowner wants to increase the value of their property and chooses renovation projects accordingly. Regardless of your reasons for renovating, it’s a good idea to figure out where the biggest bang for your buck can be found – which projects are most likely to provide a decent return on investment (ROI).

It may not be the projects you expect

When you think of ROI, you might think about adding a family room or creating an upscale kitchen. While those are great projects, neither will likely offer an impressive ROI. You may be surprised to learn that the highest ROIs are typically associated with non-flashy, practical renovations.

Curb appeal is huge

The first impression of your home tends to stick with people. Most people gain that first impression upon driving up to your house. If the garage door is dented and dated, the paint on the front door is peeling, and your yard looks like it needs a professional crew to clean it up, that first impression is unlikely to be positive.

That may be why a project like siding replacement offers an average ROI of 75% to 85% in 2025. When someone pulls into your driveway and sees a home that appears tidy and well cared for, it’s easy for them to assume you’ve been a maintenance champ and the interior of your home will be just as impressive.

Interior projects with a healthy ROI

Prepare financially

Whether you’re renovating because you want to or have an eye on the future value of your home, coming up with a plan to pay for the reno project is critical. These steps should help you get started:

• Make a list: List the changes you’d like to make, from minor cosmetic upgrades to major structural work. 
• Set a budget: Decide on the maximum amount you are willing (and can afford) to spend. This budget may ultimately help you narrow your to-do list to the projects that are most important to you. 
• Expect the unexpected: Account for unforeseen expenses by holding back 10% to 15% of your total budget. Let’s say your budget is $30,000.  That means you want to set aside $3,000 to $4,500 for emergencies. For example, if your contractor finds a problem with the plumbing while renovating a bathroom, you’ll have money available to address the issue. 
• Take another look at the budget: Now that you’ve set money aside for the unexpected, don’t forget to subtract that amount from your total renovation budget. Using the scenario above, you’d subtract $3,000 to $4,500 from $30,000 to arrive at your true budget. 
• Get quotes: The costs associated with renovations involve many factors, including materials, labor, and permits. Obtain quotes from multiple contractors to ensure you’re getting the fairest price. A contractor can also help you determine if your budget will realistically cover the cost of your renovation(s).
• Decide what matters most: Once quotes come in, homeowners often learn that they must pare down the list of projects they’d like to complete. Determine which projects you want to undertake now and which can wait for later. 
• Investigate ways to save money: Look into how much you can save by buying materials during sales or opting for more affordable materials. If you’re handy with a paintbrush or a hammer, find out how much money you can save by taking on some of the smaller projects yourself. 

There’s no place like home, and it’s easy to get carried away when renovating. If you’re primarily looking out for potential ROI, keep this in mind: As lovely as flashy upgrades may be, practical changes tend to add the most value.