3 Levels Of Renovations: What Remodel Projects Will Have the Highest ROI

A common point of confusion for homeowners regarding my Remodel To Sell® service is the term “remodel,” which often suggests expensive, time-consuming renovations. However, the tiers we encounter frequently, especially with homeowners and investors, vary in scale and cost.

For homeowners who bought their homes within the last 10 years, the house might be slightly outdated but doesn’t need major work like countertop or backsplash replacements. Often, a broken decorative light or a faucet is replaced with a mismatched one from Home Depot. These smaller, targeted remodel projects can offer high ROI without the need for extensive renovations.

Tier 1: Cosmetic Updates – High Impact, Low Cost

This tier focuses on cost-effective cosmetic enhancements to refresh your home and attract buyers without needing permits.

  • Painting: Only repaint rooms with bold or personalized colors. Neutral walls that can be cleaned often suffice, fading into the background when staged.
  • New Plumbing Fixtures and Lighting: Replacing old fixtures and adding contemporary lighting modernizes your space.
  • Update Cabinet Hardware: Optional but impactful, especially with white cabinets where hardware stands out more.
  • Kitchen and Bathroom Backsplashes: These can date quickly. Replacing outdated backsplashes with modern styles is a simple, quick fix.
  • Switches and Outlets: Replacing discolored light switches and outlets is inexpensive. Avoid expensive options like WiFi smart switches unless necessary.
consist style when remodeling helps the ROI

A cohesive lighting, fixture and hardware style will attract more buyers

Tier 2: Substantial Updates – Targeted Investment

This tier targets homeowners who have lived in their homes for decades. The style is outdated, but the home’s structure is solid. These “cosmetic fixers” are popular with investors due to their relatively low renovation costs and minimal issues. Often, these homes are inherited by family members who prefer to sell rather than live in them.

Cosmetic fixers will sell but tend to stay on the market longer than updated homes, often requiring renegotiations for outdated repairs before closing.

This level involves more significant updates to maximize return on investment:

  • Flooring: Updating old or worn flooring transforms the house. Use a consistent style—preferably hardwood or laminate throughout, with carpet in the bedrooms.
  • Countertops and Backsplashes: Modernizing these areas in the kitchen and bathrooms significantly boosts perceived value.
  • Painting Cabinets: If kitchen cabinets and bathroom vanities are in good condition, painting them is a cost-effective update.
  • Interior and Exterior Paint: Repainting the entire house is likely necessary to refresh and modernize its appearance.
before and after kitchen remodel

Save money by painting cabinets, instead of replacing them

This tier includes a wide range of homes that are most at risk of “overdoing it” with updates. We carefully evaluate which changes will yield the highest return, focusing on improvements that resonate most with buyers in your market.

The last tier typically involves homes from investors, often suffering from extensive neglect. Issues like water damage, bad foundations, and termites are common. Major fixers are easier to plan since the renovation involves comprehensive updates—replacing the kitchen and bathrooms, painting the entire house, and installing new flooring. In these cases, you replace everything, and profit is often realized at the time of purchase due to the lower initial investment.

Tier 3: Major Remodels – Significant Transformations

The final tier is reserved for larger, more comprehensive remodels. Major remodels will require building permits, architectural and structural engineering drawings, and multiple crews that specialize in different types of constructions.

  • Full Kitchen Remodels: A completely renovated kitchen can be a major selling point.
  • Other Significant Remodels: This could include bathroom renovations, adding rooms, or other substantial changes.
  • Removing walls: Older homes are very compartmentalized. Modern buyers like open payouts which require removing walls. This will require structural engineering documents.
Full remodel of a kitchen for high ROI

When remodeling a kitchen, remove walls and create an open layout with a kitchen island

These are high-investment projects and are generally undertaken when they can significantly increase a home’s value or accelerate a sale in a high-end market. I would not recommend bringing a major fixer to the market. You will get low ball offers, risky “creative” financing requests, and many problems during escrow, even if sold “as-is”.

Understanding which level of remodeling is appropriate for your home is key to making smart investments in preparation for sale. By strategically choosing the right combination of updates, you can enhance your home’s appeal and maximize your return on investment.

Trang Dunlap San Francisco Bay Area Real Estate Agent
As a realtor, I provide a range of valuable services to my clients. I have extensive knowledge of the local housing market, which helps me determine the best price for a property. I also have expertise in the buying and selling process, ensuring that the transaction goes smoothly and without any costly mistakes. Learn more about Trang at trangdunlap.com