Home improvements with the most ROI

Home improvements with the most ROI

Want to increase your home’s value while improving your day-to-day quality of life? According to the Journal of Light Construction’s Remodeling 2025 Cost vs Value Report, minor kitchen remodels can recoup up to 83% of their cost, making them one of the most strategic investments for homeowners.

Renovations can enhance your lifestyle now while supporting long-term financial value, especially when funded with built-up equity. In this guide, Splitero breaks down the top home improvement projects for 2026 and explains how to plan and fund your projects to get the highest possible return on investment (ROI).

Key Takeaways

• Renovations should generally follow the 30% rule, keeping costs below about 30% of the home’s value to avoid overspending.
• Minor kitchen and bathroom updates deliver top ROI.
• Exterior projects like entry doors and siding improve curb appeal and resale potential.
• Multiple funding options, including HEIs, HELOCs, or home equity loans, and government incentives, offer flexibility in financing renovations and managing cash flow.

How to increase home value through smart renovations

Homeowners often consider renovations for two main reasons: immediate lifestyle improvements and long-term resale value. While upgrading your home can make it more enjoyable to live in, selecting projects strategically ensures that the investment adds a measurable financial benefit. Renovations that improve functionality, curb appeal, and energy efficiency are most likely to deliver the strongest possible return, according to the JLC 2025 Cost vs Value Report.

When you’re considering home improvement projects, it’s important to balance aesthetic upgrades with practical improvements. Minor kitchen and bathroom remodels, carefully chosen exterior enhancements, and energy-efficient updates appeal to the broadest range of buyers if you plan to sell in the future. Even if you are not selling soon, thoughtful renovations can increase your equity while also improving your day-to-day comfort.

It’s also important to stay within the 30% rule, which advises against spending more than 30% of your home’s value on renovations. Following this guideline helps avoid overinvesting and preserves capital for high-return improvements.

Lisa Patterson, a top-1% nationally ranked realtor at Daniel Ravenel Sotheby’s International Realty with over 30 years of experience in the Charleston market, notes that high spend doesn’t always translate into high returns. "The best returns don’t come from spending the most—they come from making the right decisions,” says Patterson. “If I had to give one piece of advice I repeat constantly, it’s this: don’t renovate in a vacuum. Renovate with your future buyer in mind, even if that buyer is years away.”

Top home improvement projects for 2026

Not all renovations deliver the same value, and in 2026, projects that improve daily living, energy efficiency, and curb appeal are the ones that offer the strongest ROI. Some lower-cost versions of these projects, including DIY-friendly updates, can still deliver measurable value while keeping expenses manageable.

For example, painting kitchen cabinets instead of replacing them entirely or installing new light fixtures instead of completing a full electrical overhaul can improve appearance and functionality without breaking the bank.

Selecting the right projects also depends on your goals. Are you renovating primarily for personal enjoyment, resale, or a combination of both? Understanding the purpose behind each project helps prioritize improvements that provide the largest return per dollar spent, ensuring you stay within the 30% rule and maximize your equity growth.

Exterior Improvements

First impressions matter. Entry doors, garage doors, and siding replacements offer over 200% ROI, while smaller projects like trim, paint, or landscaping can be low-cost additions that elevate curb appeal. Additionally, simple landscaping projects or painting shutters can often be DIY touches that still contribute meaningfully to your home’s overall value.

Even small exterior improvements can dramatically enhance your home’s perceived value and make it more appealing to a wide range of buyers.

Kitchen Remodels

The kitchen is the most visible space in a home for high-impact home improvements, with returns ranging from 36% to 113%. Minor remodels focusing on cabinets, countertops, flooring, and lighting often provide higher ROI than major overhauls. Homeowners can achieve a modern look with cost-effective options like refacing cabinets, installing quartz or butcher block countertops, or updating hardware and lighting.

John Gluch, founder of the Gluch Group at eXp Realty in Arizona, notes that “kitchen updates, not full gut renovations, but cabinet repaints, hardware swaps, and countertop upgrades, reliably return more than they cost in this market.”

Prioritizing functional, widely appealing upgrades over high-end customization can help you maximize both usability and resale value. Gluch also adds that renovations in kitchens and other high-use spaces make for good long-term investments on value: “Kitchens and primary bathrooms hold value better than anything else over time because they’re the rooms buyers emotionally connect with.”

Bathroom Remodels

Bathrooms are functional spaces that benefit from even small updates, yielding returns of up to 80%. Updating fixtures, finishes, and lighting can boost value, and adding aging-in-place features such as walk-in showers or grab bars broadens the appeal. Affordable upgrades like replacing faucets, resurfacing tubs, or painting cabinets can yield strong ROI while being DIY-friendly.

Thoughtful bathroom upgrades can turn a routine space into one that feels modern and inviting, giving buyers and homeowners alike a noticeable boost in satisfaction and value.

Decks, Patios, and Outdoor Living Spaces

Outdoor living areas expand usable space and provide an added attraction to prospective buyers. A basic deck or patio can be installed without extensive customizations and still deliver high returns (up to 95% ROI). Using sustainable materials or simple modular designs can minimize costs while increasing appeal.

Not all outdoor projects carry the same return, though, and some can actively work against a sale. Gluch has seen this play out specifically with pools. “In Arizona, you’d think a pool is automatic value, but a significant portion of buyers with young kids or dogs see liability, not luxury,” says Gluch. “I’ve watched sellers lose buyers specifically because of a pool.”

Focusing on versatile, low-maintenance designs ensures that outdoor spaces are enjoyable now and attractive to future buyers.

Energy-efficient Upgrades

Upgrades like high-efficiency windows, insulation, or HVAC systems reduce costs and appeal to eco-conscious homeowners, with returns of 60%–75% of their value, depending on the project. Even smaller interventions, such as sealing leaks or adding smart thermostats, can improve efficiency and offer tax incentives.

Josh Qian, COO and cofounder of LINQ Kitchen in City of Industry, California, notes that these “invisible” improvements can outperform their flashier counterparts. “Instead of spending money on aesthetic interior finishing materials, spend it on energy-efficient window replacements and attic insulation,” says Qian. “Both of these ‘invisible’ improvements will help significantly lower operating expenses by reducing heating and cooling bills and creating a better insulating barrier around your home.”

Energy-efficient improvements often provide long-term savings through lower utility costs and can be a part of an overall green remodeling approach to increasing your home’s value. “A new backsplash may look nice, but a home that maintains its own temperature and runs efficiently offers an actual, measurable return on investment that will appeal to savvy buyers and their inspectors during the negotiation process,” says Qian.

Strategic ways to fund your home renovation

Renovations don’t have to create burdensome monthly debt. Homeowners with equity in their home have multiple funding options, each with different implications for cash flow, taxes, and long-term financial planning. Starting with a home appraisal can help you understand how much equity is available and how much your renovations could increase your home’s value.

Here are some common ways to fund renovations, along with what to consider for each:

• Home equity investments (HEI): Access equity upfront without monthly payments, allowing you to complete larger improvements or multiple high-ROI projects while preserving cash flow.
• HELOCs or home equity loans: These options allow for flexible access to funds with potential tax-deductible interest if used for qualifying renovations. They require repayment planning and careful monitoring of interest rates.
• Cash reserves: Using savings avoids monthly payments but may limit the scope of projects and affect liquidity.
• Government incentives or tax credits: This route can reduce the upfront or overall cost of qualifying renovations, especially those that improve energy efficiency. These programs typically don’t require repayment, but eligibility rules, timelines, and savings vary, so it’s important to confirm what applies to your specific project.

Knowing how these funding options fit your financial situation and renovation goals helps you choose the approach that makes the most sense for both your home and your long-term plans.

“The advice I give constantly right now: stop overimproving for your neighborhood ceiling,” says Gluch. “I’ve seen people drop $80,000 in renovations on a home in a $400,000 neighborhood. The market won’t give it back.”

Accessing home equity can provide flexibility and liquidity, but it can also impact long-term housing costs, repayment obligations, and your equity position. Carefully evaluating each option’s structure and consulting a financial expert can help you determine the approach that best supports your renovation goals and broader financial plan.

Leveraging your home equity doesn’t have to mean replacing your mortgage or giving up your low rate. An HEI lets you fund high-ROI renovations or updates while keeping your current mortgage and avoiding added monthly payments.

Frequently Asked Questions

What adds value to a home most in 2026?

Minor kitchen and bathroom remodels, energy-efficient upgrades, and exterior enhancements like siding or entry doors offer the strongest ROI. Projects that improve functionality and curb appeal often outperform luxury features.

Is a major kitchen remodel worth it for resale?

Major remodels can increase value, but minor updates typically return a higher percentage of investment. Focus on cost-effective improvements first.

What is the 30% rule for renovations?

The 30% rule advises spending no more than 30% of your home’s current value on renovations. Overspending can reduce overall ROI, even for high-value projects.

What devalues a house the most?

Overcustomization, neglecting maintenance, or adding low-demand features can lower resale value. Choose updates that appeal broadly and integrate features that support long-term functionality and sustainability.

This story was produced by Splitero and reviewed and distributed by Stacker.