8 Home Upgrades That Add Value To Your House vs 4 Money Pits

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By Joel B., June 14, 2025

Renovating your home is a deeply personal endeavor, driven by the desire to create a space that you and your family love. While future resale value is often a consideration, the true return on investment (ROI) lies in the joy and improved quality of life you experience. As a firm believer in renovating for personal enjoyment, I’ve outlined home upgrades that enhance your living space while potentially boosting your home’s value, along with those that are likely to be financial drains. Let’s dive into the worthwhile upgrades and the money pits to steer clear of, based on insights from real estate experts and industry reports.

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Worthwhile Home Upgrades

Small Upgrades with Big Impact

Small, cost-effective upgrades can transform your home’s look and feel without breaking the bank. These projects are ideal for refreshing key areas like the kitchen and bathroom, which are often the first spaces potential buyers notice.

Regrouting Tiles: Regrouting chipped or dirty tiles in your shower, backsplash, or tiled walls can make these areas look brand new. Costs typically range from a few hundred to a couple thousand dollars, depending on the size of the area. This upgrade prevents a dated or dingy appearance that could deter future buyers. According to HGTV, minor bathroom updates like regrouting can significantly enhance appeal without major investment.

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Repainting: A fresh coat of paint can dramatically improve a room, especially if you dislike the current color. Neutral tones like white, gray, or beige are safer for broad buyer appeal, as Zillow notes that bold colors may turn off some buyers. However, if you’re staying long-term, choose colors that reflect your style. Painting is one of the most cost-effective upgrades, often recouping nearly all costs at resale.

Upgrading Hardware: Swapping out dated cabinet handles, faucets, or drawer pulls in kitchens and bathrooms can modernize these spaces. This low-cost update, often under $500, aligns with Bankrate’s advice to focus on minor kitchen upgrades for high ROI.

Better Lighting: Replacing incandescent or fluorescent fixtures with energy-efficient LED lights saves on utility bills and updates the aesthetic. Upgrading dated “boob lights” to flush or semi-flush mounts, along with modern switches and outlets, enhances functionality and appeal. Angi reports that lighting upgrades are a top ROI project, often recouping over 60% of costs.

These small upgrades are low-risk, high-reward projects that improve your home’s livability and prevent devaluation from outdated or neglected features.

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Major Renovations for Long-Term Enjoyment

For those planning to stay in their home for years, major renovations can offer significant lifestyle benefits and potential resale value. The key is to undertake these projects early to maximize enjoyment, rather than just before selling.

• Open Kitchen and Dining Room: Combining the kitchen and formal dining room into an open-concept space is highly sought after by buyers, according to the National Association of Home Builders, with 86% of buyers preferring open kitchen-dining layouts. This upgrade can add about 5% to your home’s value, depending on the quality of cabinetry and appliances. However, opening the kitchen to the living room is more polarizing, so consider your market’s preferences.

• Flooring Updates: Replacing wall-to-wall carpet with laminate, luxury vinyl plank (LVP), or engineered wood can increase your home’s value. Laminate and LVP offer better ROI than hardwood due to lower costs, though hardwood is preferred for high-end properties. Refinishing existing hardwood floors can recoup up to 147% of costs, per HomeLight, providing a “wow” factor for buyers. If replacing carpet isn’t feasible, professional steam cleaning can lift stains and refresh the space.

• House Extensions: Adding square footage through extensions can address space constraints and boost value. Ground-floor rear extensions, often incorporating a new kitchen, are popular for expanding living areas. Side extensions work well for terrace homes, while second-story additions or loft conversions can add bedrooms or offices. Basement extensions are costlier and typically only yield good ROI in high-value markets (properties priced at $1,500+ per square foot). Consult local regulations for permits, as unpermitted additions can deter buyers.

• Granny Flats: Adding a self-contained granny flat can increase value by up to 10% in markets like Australia, especially for multigenerational households or as a rental unit. Ensure the design is functional and complies with local codes to maximize appeal.

• Utility Rooms and Walk-In Wardrobes: Well-planned utility rooms with ample storage or walk-in wardrobes can add up to 5% to your home’s value, provided they don’t compromise other spaces. Poorly executed designs, like cramped wardrobes carved from small bedrooms, can detract from value.

• Garage Conversions: Converting a garage into a living space or office can add up to 10% to your home’s value in areas where outdoor parking is viable. However, in climates where cars need protection, retaining the garage may be wiser. Consider your neighborhood’s needs before proceeding.

• En-Suite Bathrooms: Adding an en-suite bathroom, especially in a four-bedroom home with only one bathroom, can significantly improve livability and value. However, avoid sacrificing bedroom size, as small bedrooms reduce appeal. A powder room is a good alternative for smaller homes.

These major renovations are most valuable when they align with your lifestyle and local market trends. Consulting a local real estate agent can help ensure your upgrades match neighborhood standards.

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Money Pits to Avoid

Not all renovations are created equal. Some projects, despite their appeal, are unlikely to recoup costs or may even devalue your home. Here are the upgrades to approach with caution:

• Swimming Pools: Unless you live in a high-end market where pools are standard, they’re a money pit. Installation costs are high, maintenance is expensive (averaging $177 weekly for a standard pool), and many buyers see them as a liability due to upkeep and safety concerns. Pools only add value in warm climates like Florida or neighborhoods where they’re common. If you love swimming, install one for enjoyment, not ROI.

• Major Kitchen or Bathroom Renovations Before Selling: A high-end kitchen or bathroom remodel, costing $77,939 on average for a major kitchen overhaul, typically returns only 30-59% at resale, per Remodeling Magazine. If your kitchen is functional, minor touch-ups like painting cabinets or updating hardware are sufficient. Major remodels are best done early for your enjoyment, not just before selling, unless you’re in a luxury market catering to specific buyers.

• Over-Improving for Your Neighborhood: High-end finishes, like gold-plated appliances or imported tiles, won’t yield returns if neighboring homes are mid-range. Buyers won’t pay a premium for a home that far exceeds local standards. Bankrate advises keeping renovations consistent with your neighborhood’s value to avoid over-investment.

• Jetted Bathtubs or Jacuzzis: These are bulky, expensive to maintain, and not a priority for most buyers, who can install them if desired. They’re a lifestyle choice, not a value-adding feature, and may even deter buyers who see them as space-wasters.

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Key Takeaways

When planning home renovations, prioritize projects that enhance your daily life while keeping an eye on potential resale value. Small upgrades like regrouting, repainting, and updating lighting offer high ROI with minimal risk. Major renovations, such as open-concept kitchens, flooring updates, or extensions, are worthwhile if done early for your enjoyment and tailored to your market. Avoid money pits like pools, last-minute major remodels, over-improvements, or jetted tubs unless they align with your lifestyle and local expectations.

For personalized advice, consult a local real estate agent to understand what buyers in your area value. As you embark on your renovation journey, remember that the best investment is one that brings joy to you and your family. If you’re looking for inspiration, check out resources on kitchen and bathroom design mistakes to avoid, and consider upgrading your travel gear with high-quality options like Monos suitcases for a seamless experience on your next trip.

Sources: HGTV, Remodeling Magazine, Bankrate, HomeLight, Angi, Zillow, National Association of Home Builders, and other real estate industry reports.

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