Get the best ROI with these top home improvements

As a homeowner, you have a lot on your plate. As if staying on top of home maintenance and repairs wasn’t enough, you also need to periodically reinvest in your home and remodel. Yet, while these projects can have a high upfront cost, they also generally have a strong return on investment (ROI), meaning you get your money back when you eventually sell your home, refinance, or discharge private mortgage insurance. In this article, we’ll review why your home’s value matters and some of the top home improvements for boosting that value.

Why does home value matter?

If you have no plans to sell your home in the immediate future, you might be thinking: why should I care about my home’s value? It’s a fair question. After all, in a tight household budget, the case for spending any money—let alone thousands of dollars on a remodel or upgrade—needs to be strong. However, even if you’re not thinking about moving at the moment, there are still benefits to increasing your home’s value:

Higher listing price

Ok, we already established that you’re not planning on moving. But, life happens fast. What if you or your spouse get a once-in-a-lifetime job offer in another city? What if you decide to move elsewhere to be closer to your parents or adult children? Or, what if you decide it’s time to upgrade from your current home to something larger or—inversely—downsize to a smaller place?

If any of these things could happen in the next five years, then it makes sense to work today to maximize your home’s value. Remodeling your kitchen or bathroom doesn’t just add value to your home: it also makes it more attractive to prospective buyers, and therefore easier and faster to sell.

Get rid of private mortgage insurance

Many mortgages today have something called “private mortgage insurance.” When you put a downpayment of less than 20%, your lender will typically add a private mortgage insurance policy onto the loan. You pay for the PMI every month when you pay your mortgage. However, unlike most of your mortgage payment which goes toward the interest or principal of your loan, PMI just goes to a private company. If your mortgage has PMI, you should make it a priority to get rid of it as soon as possible—doing so early could save you thousands of dollars.

Every lender and private mortgage insurance provider has different terms, but the way PMI generally works is this: once you have paid enough of the principal to hit the 20% of the home’s current value, you can write and ask that the policy be canceled. However, there’s an important caveat here: most PMI providers want you to prove that you’ve done something “material” to increase your home’s value, in contrast to just riding a rising housing market. This is where a remodeling project comes in: by replacing your HVAC system or renovating your kitchen, you can boost your home’s value and meet the terms needed to discharge PMI.


If you’re thinking about refinancing to a lower interest rate and taking a home equity loan, a high-ROI, value-boosting project might be a good idea for your home.

What home improvements have the highest ROIs?

If you’re ready to invest back into your home, you want to get the most bang-for-your-buck. That’s what return-on-investment (ROI) measures. It’s how much return you get relative to what you invested. Here are three high-ROI home improvement projects you should strongly consider:

Kitchen Remodels

The kitchen is arguably the center of life in the modern American home. That’s why homeowners value kitchen upgrades so highly. On average, a kitchen remodel has a 80.5% ROI. To get the most out of your kitchen renovation, make sure you have new countertops, cabinets, and floors installed.

Bathroom Remodels

Once you’ve completed your kitchen remodel, it’s time to move onto the master bathroom. On average, homeowners who renovate their master bathroom with a new shower, vanity, and flooring see an average ROI of 70.1%. If you’re planning on moving the sinks, shower, tub, or toilet, make sure you hire an experienced plumber to help you.

HVAC Replacement

If your home is relying on an aging air conditioner to get you through the coming summer, or a dying furnace to heat it this winter, you’re going to feel that impact on your home’s value and attractiveness to buyers. In other words, very few homebuyers want to purchase a home with an HVAC system that needs to be replaced the day after they get the keys. Replace your HVAC system ahead of listing, and you’ll see a 50% ROI and get a big boost to your home’s curb appeal and buyer interest.