Home Renovation Guide: What Adds Value and What Doesn't?

Thursday, April 8, 2021   /   by Randy Durham

Home Renovation Guide: What Adds Value and What Doesn't?

While renovation shows have gained popularity, think twice before you decide to do any major structural changes or invest in high-end upgrades. There are several ways to improve your return on investment. Surprisingly, it is often the simple updates that pay off when you list your home, while larger and more expensive projects run the risk of you not recouping your expenses.  

Upgrades that Add More Space: It is important to check local zoning laws and building codes when you are adding extra space. Another factor to consider is your neighborhood and the average home size in your area. This can throw off market value and hurt the resale value if you add too much square footage.

Finishing the basement: This improvement adds more square footage that is climate controlled and can move your house into the next price bracket, and you can recoup up to 70% of the total cost. The cost varies widely depending on your home’s existing square footage.  Popular options are adding in-law suites and family rooms. Click here for more detailed information on costs.

Converting the Attic: If you have one, consider finishing out the attic to be an extra room. This is a great way to increase the market value of your home, and you can recoup up to 93% of the initial conversion cost.

Open Floor Plan: Knocking out a wall that is not load-bearing creates an open layout in the main living area that is attractive to many buyers.


Remodels that Add Resale Value: Kitchens and bathrooms are the two main rooms that are often under scrutiny from potential buyers because they are the most expensive to remodel. While going overboard with high-end upgrades can hurt resale value, doing minor remodels often pays off in resale value.

Minor Bathroom Remodel: There is no need to gut the bathroom down to the studs and do a complete remodel. Average returns are 102% for minor updates, and you can see lower returns of up to 93% for major remodels.  First, consider what needs to be replaced. This project can be versatile and depends uniquely on the age and condition of your home.

Minor Kitchen Remodel: This remodel can boost the appeal to buyers without the hassle of taking on a huge project. Upgrading appliances, refinishing cabinets, and replacing hardware can transform this space and you can recoup from 80% to 98% of the costs.  

Basement Remodel: This project can increase selling power and transform an unattractive space. While costs for finishing out a basement vary and net lower returns, homeowners doing a remodel of a finished basement can recoup up to 90% of their costs.


Enhancing Curb Appeal: A home’s exterior that is well kept with attractive landscaping signals to buyers and the public that your home is well maintained. Keeping up with basic landscaping has a 100% return on investment. In addition to landscaping, here are other ways to make your home stand out:

·      Steel Door: Replacing an exterior door with a steel one results in lower maintenance and homeowners will enjoy its increased energy efficient qualities.

·      Garage Door Replacement: This can reward you a 95% return on investment if you reuse the existing motor opener.

·      Exterior Paint: You can repaint the whole exterior or touch up areas that need it if you are on a budget. Painting the front door and trim also make an impact.

·      Adding a wooden deck: The return on investment for adding a wooden deck varies, but you can expect to recoup up to 75.6% of the building costs.

Reducing Maintenance Hassles: When it’s time to list your home, many buyers and inspectors will focus on structural issues that can be flagged once you’re under contract. Like minor remodels, these maintenance issues vary widely depending on the age and condition of the home. Despite the high costs of these projects, these upgrades often pay off when receiving offers and help the closing process go more smoothly.

Redo the roof: If it’s time to replace the roof, you can recover up to 107% of the costs despite taking on this big and costly project. This improvement can be very attractive to buyers that are using financing, as inspectors can flag any structural issues.

Fix siding issues: If your siding is in bad shape, it may benefit you to replace the siding before listing your house. Do your research on which brands can be problematic

Replacing the HVAC system: The age of the HVAC system is a big selling point for first-time buyers, particularly if they are using a government-backed loan. If it’s time to replace the HVAC, you can recoup up to 85% of the cost at resale. 

On a budget?

Replace bathroom and kitchen fixtures: Swapping out faucets, knobs, and drawer pulls is a cheap upgrade that goes a long way in sprucing up the home’s interior.

Install hardwood floors: Adding new hardwoods will recoup 106% of the costs after resale and is a very attractive feature to buyers. This project is very beneficial if you have a carpet that needs to be replaced.

Neutral paint colors: Bright wall colors deter buyers and can make spaces look smaller. Light wall colors like beiges, grays, and putty colors are always a safe option. 


Upgrades that Don’t Pay Off: Many of these updates boil down to taste issues. If you are preparing your home to sell, the updates need to appeal to the widest range of buyers possible. These updates are great if you plan to keep living in the home for an extended period of time, but do not impact resale value.


1.     Gourmet kitchens: While kitchens can net you anywhere from 60% to 120% return on your investment, going overboard can hurt your resale value and you can only expect to recoup about half of your remodeling costs. While adding a dream kitchen is great if you plan to keep the home and make good use of the space, adding custom cabinets, stone countertops, and tile backsplashes pushes limits on resale value. Adding things like commercial-grade cooktops, marble countertops, and built-in appliances can turn off some buyers and decrease your returns.

2.     Upscale Bathrooms: If you do a major remodel by adding high-end fixtures and flooring, expect to recoup up to 58% of your initial costs. Stick to minor remodels for the best return on your investment and to attract a larger pool of buyers.

3.     Upscale landscaping: The two main issues with extensive landscaping are taste and maintenance. Exotic perennials do not appeal to everyone because of the cost and time required for upkeep, so stick to low-maintenance native plants that thrive in the area if you are considering adding any landscaping. Popular native plants for Tennessee and Northwest Georgia are hostas, monkey grass, bee balm, and blooms that thrive in clay soil like daylilies.

4.     Solar Panels: Even though installing energy-efficient appliances makes your home more attractive to buyers for its cost-saving properties, solar panels generally will not impact your resale value. This investment will lower your energy costs if you keep the home, but you risk losing money as it can take years to see the returns on this project.

5.     Swimming Pools: In places like Tennessee and Northwest Georgia, the swimming pool can only be used for a few months out of the year can deter some buyers simply of the maintenance costs and safety hazards for young children.

6.     Garage Conversions: Other room conversions like turning a bedroom into a walk-in closet and combining bedrooms fall into this category, too. Even though adding more finished square footage can potentially increase your return on investment, sacrificing garage space is a potential turn-off to buyers.

7.     Wine Cellars: Even higher-priced homes with a wine cellar can be a potential turn-off to buyers, particularly if they have no desire to use the space and have to spend money to convert it.

8.  Carpeting: Most buyers don’t like carpets, especially if they have allergies or pets. A safer choice is hardwood flooring, which is more popular with buyers and results in higher returns.

Remember that every home is unique, and many of these updates discussed need to be carefully weighed before you decide to list your home. A good place to start is to get a free market analysis to see what your home is currently worth. What projects are you considering before listing your house?

  seller tips

Real Estate Partners Chattanooga LLC
Randy Durham
525 W Main Street
Chattanooga, TN 37402

Information is provided exclusively for consumers’ personal use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS.
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