Recent Data Suggests You Shouldn’t Spend Another Dime on Home Improvements Before Speaking With a Local Real Estate Agent
Lighter Side of Real Estate • June 14, 2023
If you do renovations or home improvements to your house, common sense says that doing so would raise the value, right?
The good news is that they do increase the value of your house!
The not-so-great news is that the amount your home goes up in value probably won’t be as much as you even spent on the project…
In fact, as CNBC recently reported, according to the 2023 Cost vs. Value Report, only 4 home improvement projects produce a positive return-on-investment. And if that’s not surprising enough, they probably aren’t even ones you’d think would make the list! The current projects that will net you the most profit when you sell your house are:
- Switching out a traditional furnace to a heat pump. That’ll put an extra $619 in your pocket based upon national averages.Replacing your garage door. That will add $116 to your bank account.
- Replace your siding with a stone veneer. Add $192 to your balance sheet.
- Change out your front door with a new steel door. Treat yourself to some lunch with the $21 you’ll recoup.
If you combined all four of those exact home improvement projects, you can expect to net a whopping $948!
The big, sexy projects most people think about doing to improve value — like a full-blown renovation of an existing bathroom or kitchen — will certainly add value, but they won’t increase the value as much as they cost to do. Those types of projects recoup less than 50% of what they cost a homeowner.
That said, those are based upon national data and averages. Here’s a link to the data CNBC cited in their article, which allows you to choose your specific area to get a better idea for how much you can expect to recoup on a project where you live. But the general gist is always the same: Very few projects will produce a positive return, regardless of where you live. And when they do, it’s rarely all that much of a return.
Should You Even Update or Renovate Your House at All?!
Once the initial shock wears off, the next question most homeowners have is whether they should waste any time or money on improving their house at all. But before you decide to never spend another cent or minute of your time on your house, here are a few things to consider:
- Updates and renovations will make your house more attractive and appealing to potential homebuyers.
- An outdated house (or one in need of repairs) can bring your value down. You need to maintain your house to about the level of other homes in the area, if you want to fetch a similar price to other recently sold homes.
- If your home isn’t updated, it can take a longer time to sell, or not sell at all, if it’s a slow market.
So you still need to make sure you’re keeping your house in good shape, and improving it over the years, if you want your house to sell readily and for as much as possible.
Things to Do and Keep In Mind if You Renovate
In order to maximize the money you spend on home improvements, here are a few key things you should do:
- Speak to a local real estate agent before doing any projects. Basing your decision upon national (or even regional) data can be misleading and inaccurate. Just because a particular type of project tends to produce a better return, and another does not in most areas, that might not be the case in your specific price range and market. A local agent will be able to help you assess whether or not a project will improve the value of your home enough to make it worth the investment.
- Don’t underestimate the value of your enjoyment. While a project may not produce a positive financial return, that doesn’t mean it won’t give you great satisfaction and enjoyment. There’s nothing saying you have to make money on the projects and home improvements you do, so long as you know what to expect ahead of time and aren’t surprised when you decide to sell.
- Be frugal and thoughtful about what you spend on improvements. New and updated is better even if it isn’t the highest end finishes or materials. Unless you’re in the luxury market, you can probably get away with doing lower-grade upgrades if you’re concerned about making as much of your money back as possible.
- Keep it neutral and universal. If you’re concerned about recouping as much money as possible, try to do projects and updates that will appeal to almost every buyer by keeping them neutral in style and color.
The Takeaway:
Many homeowners are surprised that their home renovations and improvements don’t increase the value of their home as much as they hoped, or even as much as they cost to do, when they decide to sell their house. But the reality is, very few projects produce a positive return-on-investment, and it isn’t very much of a return when they do.
If you want to maximize your ROI on home improvements, make sure to speak with a local real estate agent to help you assess whether a project makes sense before you spend time and money on it.
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Home Updates That Actually Pay You Back When You Sell Planning to sell this spring? While you may be tempted to hold off until the first blooms or the spring showers hit, that's actually waiting too long to get started by today’s standards. Buyers have more options than they did a few years ago. So, it's worth it to tackle repairs now and make sure your house is set up to stand out. Because you don’t want to be caught scrambling right before the spring rush. Or, running out of time to do the work your house really needs. The key is focusing on updates that actually matter. And that’s exactly where return-on-investment (ROI) data comes in handy. Which Projects Tend to Pay Off? Every year, Zonda looks at which home improvements deliver the most bang for the buck when you go to sell the home. And the results can be a little surprising. The green in the chart below shows the updates where sellers have the biggest potential to add value based on that research: While there's a wide range of projects represented in this data, the cool part is, some of the top winners aren’t big to-do's. They’re just swapping out doors. Small Updates, Big Visual Impact This goes to show little projects can have a big impact. So, you don’t have to spend a fortune. And you don’t need to tackle everything on this list. But in today’s market, doing nothing can work against you. Now that buyers have more homes to choose from, a lot of them are going to opt for what’s move-in ready. The best advice? Focus on what your house needs, whether it’s listed here or not – like the repairs you’ve been putting off. A front door or shutters in need of a little TLC. Piles of leaves in the yard. Scuffed up paint where your kids play inside. Those details matter too. Mallory Slesser, Interior designer and Home Stager, explains it to the National Association of Realtors (NAR) this way: “If you’re looking for affordable updates that pack a punch, dollar for dollar, I would say painting; changing out light fixtures; changing out hardware; maybe new draperies or window treatments. Those are all cost-effective ways to make a big statement. It really changes the space.” These seemingly small things help buyers focus on the home itself – not the work they think they’ll have to do after moving in. And that’s paying off for other sellers. Buyers are often willing to spend more on homes that feel well cared for, updated, and move-in ready. This Chart Is a Starting Point, Not a Strategy Here’s the important thing to remember. National data like this is a guideline. Buyer preferences are going to vary by location, price point, and even neighborhood. That means a project that boosts value in one area might be unnecessary (or even overkill) in yours. That’s why the first step should always be to talk with a local real estate professional before you start. An experienced agent can help you answer questions like: Which updates do buyers in your market expect? What can you skip without hurting your sale? Where will a small investment make the biggest difference? Is it better to update, or sell as-is ? That guidance helps you avoid over-improving and under-preparing. Bottom Line If you’re looking to sell this spring, you still have time to make updates that help your home stand out – without taking on a full renovation. If you’re not sure where to start, let’s talk through what makes sense for your house. A quick conversation can help you prioritize the updates that’ll pack the biggest punch. What’s one upgrade you’ve been thinking about – and wondering if it’s worth it?
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Are Big Investors Really Buying Up All the Homes? Here’s the Truth. It’s hard to scroll online lately without seeing some version of this claim: “Big investors are buying up all the homes.” And honestly, if you’re a homebuyer who’s lost out on a few offers, that idea probably sounds believable. When homes are expensive and competition is tight, it’s easy to assume giant companies are scooping everything up behind the scenes. But here’s the thing: what people assume is happening and what the data actually shows aren’t always the same. Let’s look at what’s really happening with large institutional investors in today’s housing market – because the numbers tell a much different story than the headlines. The Number Most People Won’t See Online Let’s start with the most important stat. According to John Burns Research & Consulting (JBREC), large institutional investors – those that own 100 or more homes – made up just 1.2% of all home purchases in Q3 of 2025 (see graph below): That’s it. Out of every 100 homes sold, only about 1 went to a large institutional investor. And here’s an important point that often gets missed: that level of investor activity is very much in line with historical norms. It’s not unusually high, and it’s actually well below the recent peak of 3.1% back in 2022 – which itself was still a small share of the overall market. So, while it can feel like big investors are everywhere, nationally, they’re a very small part of overall home sales. Why Investor Activity Gets So Much Attention There are two main reasons this topic gets so much attention: Investor activity isn’t spread evenly. Investors are more active in certain markets, which can make competition feel intense for homebuyers in those areas. As Lance Lambert, Co-Founder of ResiClub, explains:“On a national level, “large investors”—those owning at least 100 single-family homes—only own around 1% of total single-family housing stock. That said, in a handful of regional housing markets, institutional and large single-family landlords have a much larger presence. ” Investor is a broad term. Part of what makes the share of purchases bought by investors sound so big is because many headlines lump large Wall Street institutions together with small, local investors (like your neighbor who owns one or two rental homes). But those are very different buyers.In reality, most investors are small, local owners, not massive corporations. And when all investors get grouped together in the headlines as a single stat, it inflates the number and makes it seem like big institutions are dominating the market (even though they’re not). Yes, big investors exist. Yes, they buy homes. But nationally, they’re responsible for a very small share of total purchases – far smaller than most people assume. The bigger challenges around affordability have much more to do with supply, demand, and years of underbuilding than with large institutions competing against everyday buyers. That’s why it’s so important to separate noise from reality, especially if you’re trying to decide if now is the right time to move. Bottom Line If you want to talk through what investor activity actually looks like in our local market, and how it impacts your options (or doesn’t), let’s connect. Sometimes a little context makes all the difference.
