12 Home Improvements with High Return on Investment

Every home can benefit from some renovation, but knowing where to start can leave some homeowners scratching their heads.

One place to begin is with any project that seems most pleasing to the homeowner. Perhaps a better way is to look at the return on investment (ROI) of various improvements and choose the ones that are most likely to pay off financially.

Home improvements offer ROI in two primary ways. Some increase the resale value of the home, while others lower the operating costs, particularly the energy costs. The best ones do a bit of both while improving the owner's overall quality of life. If you're looking to increase resale value before getting a home appraisal, keep reading to learn about 12 home upgrades with a high ROI.

Home Improvements That Boost Resale Price

A few home improvements increase resale value by more than they cost, but most don't. Still, there are good arguments for making improvements with less than 100% ROI. Many of them boost the overall impression buyers have of the property and increase the chances of selling quickly. Furthermore, you never know exactly how much more the offer will be if there's a remodeled kitchen or bathroom. Finally, homeowners get to enjoy the improvement themselves, and the cost is subsidized by the increased contribution from the next owner.

Here are some of the top candidates:

Painting. For anyone who plans to sell, this is an easy choice. A quality paint job improves buyers' first impressions so much that it generally returns more than it costs. However, some wall colors should be avoided.

Landscaping. Pristine landscaping is another curb appeal improvement with a potential ROI of over 100%. This doesn't require a significant effort with new terraces and walls. Weeding, mulching, and adding showy flowers and shrubs will do the trick.

Partial kitchen remodel. Kitchens sell houses. They're usually the first things buyers look at after they walk through the door. Partial remodels have a higher ROI than total ones. Refacing cabinets, installing quartz or granite countertops, a new backsplash, updating the faucets, and adding new stainless steel appliances are the most productive upgrades.

Bathroom remodel. Bathrooms are the second-most essential rooms in a buyer's purchase decision. As with kitchens, minor remodels offer a higher ROI than major ones. Areas with the best cost to value ratio include tiling, granite vanity tops, upgraded fixtures, and improved lighting.

Front door replacement. Replacing the front door is inexpensive, and it can create a fantastic first impression. Steel doors are sturdy, attractive, and one of the best energy-efficient home upgrades. Garage door replacement offers the same advantages.

Home Improvements That Save Expenses

Here are energy-efficient home improvements that pay their way with reduced energy usage.

ENERGY STAR appliances. These energy-efficient products are EPA-tested to use the least energy. They're the way to go when replacing appliances, and sometimes it's even worth upgrading before the old appliances wear out.

Smart thermostats. Smart thermostats learn your habits to adjust heating and cooling levels for optimal comfort and the lowest costs.

Insulation. Upgrading insulation can save homeowners hundreds of dollars on heating and cooling expenses every year, especially in high-leakage areas like attics and crawlspaces.

Windows. As much as 30 percent of heat and cooling goes out the windows. Window technology is constantly improving, and the newest options will increase comfort and slash utility costs if current windows are drafty.

Efficient water heaters. Traditional water heaters warm up a tankful every time, and if the hot water isn't used, the energy is wasted. New tankless units heat only what's needed and typically reduce the energy cost by around a third.

Water-saving fixtures. Traditional showerheads, faucets, and toilets send more water down the drain than necessary. Low-flow replacements pay for themselves within months.

Duct sealing. In most homes, air ventilation ducts leak. Heating and cooling seep wastefully into attics and basements. This low-cost upgrade can pay for itself by lowering heating and cooling expenses.

Home Upgrades That Pay Their Way

Some high-ROI home improvements require a few hundred dollars and others cost tens of thousands. Even for the expensive ones, increased resale value and decreased energy costs pick up a portion of the bill. When homeowners choose the right home upgrades, they can lower their utility bills, boost their property values, and enhance their everyday home enjoyment.