Top 9 Renovations to Increase Home Value in 2025

2. Create a more functional floor plan

Livable square footage often increases your appraised value.

“More and more floor plans that don’t work as well nowadays are getting more and more of a pushback,” according to Santiago Valdez, a Chicago agent with more than two decades of experience. Standalone kitchens or bathrooms on the smaller side are seen as outdated, and buyers aren’t as willing to make them work as they used to be.

Consider reworking the floor plan or adding additional space to make the home more functional for modern living. Valdez recommends you consider features like these:

• Large bathrooms
• Kitchens connected to other rooms
• Walk-in closets
• Additional prep space for kitchens

If you have an unfinished basement, adding flooring, drywall, and other touches to make it a livable space has a potential ROI of 70% to 75%. Convert it into a living area or a “specialty room” that buyers love.

If you can’t add more space to the home, make it more functional by converting unused spaces. Consider turning an unused home office into a bedroom or reworking an unused living room into a flex space.

3. Upgrade to luxurious bathrooms

Buyers are looking for bathrooms that feel like a spa experience. 94% of top agents surveyed in our year-end report said modernized bathrooms make homes more appealing to buyers in the current market. Remodeling this space can increase property value by as much as 73.7% of the renovation cost.

Consider upgrades such as rain shower heads, double-sink vanities, extra storage, soaking tubs, and anything else that contributes to a modern, spa-like experience.

Valdez says that buyers want more spacious bathrooms than they have before. Look for ways to create the illusion of more space by adding mirrors or reworking the floor plan. If your budget permits, consider adding more square footage when remodeling your bathroom.

4. Install a kitchen island or walk-in pantry

88% of agents surveyed in HomeLight’s year-end report said that upgraded kitchens were one of the biggest selling points for buyers in 2024. A minor, mid-range remodel recovers 96.1% of the investment. That said, consider adding multiple sinks, a new refrigerator, and a flexible pantry space.

“The kitchen has always been a very central space to the home. Especially on new construction, we are seeing more and more prep space in the kitchen,” says Valdez.

5. Build or convert a home office

If you’re not much of a cook, consider converting an existing walk-in pantry (or closet) into a home office. In Provencher’s experience, just having that devoted space is a bonus.

“It definitely helps to edge out your competition,” she says.

“I recently showed a condo that had a big walk-in pantry with their office in it. They could keep the door open if needed, but it was a nice little private space on the first floor where everything’s happening,” she adds.

She’s also seen homes where sellers have removed the clothing racks in a double closet and put in a tabletop and adjustable shelving for office space. This type of conversion fits well in a guest room but is also an efficient way to use the closet in a baby’s or toddler’s room, where a small dresser or wardrobe can handle the child’s clothing.

“The kids can be in a play space while you’re working, and at the end of the day, you can close it up and be done with it,” she says. “I’ve shown a few homes with it, and everybody is like, ‘Wow, this is so great.’”

6. Expand your outdoor space

While outdoor space won’t fetch the premium in 2025 that it did in recent years, almost half (48%) of agents surveyed told HomeLight that improved outdoor or garden spaces will still serve as a big selling point for buyers this year.

Consider incorporating any of these sought-after features:

Pool

Homeowners in certain parts of the country can increase their home’s value by up to 7% if they add a pool. Adding a pool can make financial sense if you live in a warmer climate area, like Florida or California, or in a neighborhood where most other houses have pools.

However, adding a pool isn’t always the right call. The added expense and maintenance upkeep might outweigh any potential ROI a pool could yield. Consult a real estate agent to determine if adding a pool will leave you high and dry.

Deck or patio

Decks gained greater popularity due to the pandemic and are a great way to increase your home’s overall ROI. While costs vary based on materials and size, you could recoup between 68% to 83% of your costs if you decide to build a deck. The average cost to add a wood deck in 2024 is $17,615. A composite deck costs a bit more, around $24,206.

Hot tub

An in-ground hot tub gives your backyard the feel of a high-end spa (and pairs well with an in-ground pool). However, you’re unlikely to recoup your installation cost of $8,000 to $25,000.

A freestanding hot tub isn’t a bad compromise if you’re shy about breaking ground. While freestanding hot tubs aren’t factored into a home’s overall value (appraisers consider this personal property), your agent can discuss a buyer paying for this separately.

7. Modify your home for aging-in-place or intergenerational living

About 75% of older adults want to stay in their homes as they age. With the housing market being so uncertain, many are choosing to stick with their current homes, with 43% planning to make changes in their properties to better fit their needs and lifestyle. As a result, intergenerational living will become more popular, too.

An accessory dwelling unit (ADU) is an innovative and affordable housing solution in high-cost areas. It can also house an extended family or add rental income to your property.

About 24% of agents said that ADUs are a top feature that makes homes more appealing in the current market. On top of that, it boosts property value.

“Multigenerational living is a huge value-add,” Provencher says, boosting the typical home value in her area by about 20% to 25%. She says that even people who don’t plan to use an ADU as housing love the space as a home office suite.

However, building an ADU can get expensive. The average cost is $180,000 but can stretch up to $360,000. The cost can be impacted by the type of ADU you build, the material type, the design of the space, labor costs, and the systems you equip the unit with.

8. Make your mudroom bigger and more functional

A mudroom or foyer with a place to drop off the day’s gear has long been a home design perk, especially in areas where corralling wintery shoes and boots is a must. Adding this space to your home offers approximately 50% ROI.

Provencher says that adding a bench, hooks, and built-in cubbies to a small foyer entry creates this natural stopping point and a perceived value-add.

“They want that drop zone,” she says.

9. Introduce small, but impactful changes

According to Valdez, ensuring the home doesn’t show signs of “deferred maintenance” will give you the best return on investment. These changes don’t have to be big renovations. They can be small updates to the home, including:

• Cleaning up the property
• Adding fresh paint
• Fixing windows with leaks
• Repairing any gas leaks
• Resanding floors
• Updating old or outdated appliances
• Filling in caulk or grout that needs repair

The renovation project with the highest potential ROI? Refinishing wood floors. You can recoup 147% of the costs for this project.

If you have a low budget or little time to make renovations, consider these small to-dos to help boost your home’s value.

Renovations can be expensive, so invest wisely

Not every renovation project will increase your home value. But keeping pace with what buyers want can help increase your resale value.

Talk with a local real estate agent about which renovations increase home value in your area, and then see which ones can help you enjoy your space the most until you’re ready to hit the market.

Header Image Source: (Petra Keßler / Unsplash)