is remodeling your home worth it
Is remodeling your home worth it

Is Remodeling Your Home Worth It?

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Save more, spend smarter, and make your money go further

Owning your own home is part of what is often referred to as the “American Dream”. But when you own your home and are completely responsible for repairs, maintenance and upkeep, it can change your outlook on things. You’ll soon find yourself with a seemingly never ending list of things to fix, change or upgrade. Organizing and prioritizing this list of projects is not only a way to save your sanity, but it can also make good financial sense. Deciding what projects will increase your home’s value the most can help you as you prioritize which items to check off your list first.

Which Projects Are Worth the Most?

A common way to decide if a particular home improvement project is worth it is to look at what is called the Return on Investment (ROI). To calculate a project’s ROI, divide the approximate amount it will add to your home’s value and divide that by how much it will cost to do the project. So if a kitchen remodel will cost $40,000 and will add $30,000 to your home’s value, its ROI is 75% ($30,000 divided by $40,000). The higher the ROI, the more a project might be worth doing.

It is also important to consider that there is more to deciding whether or not you should do a particular project than its monetary ROI. Since this is your home and is likely where you and your family spend a majority of your time, you also want to make sure that you are comfortable. So a project that improves your daily life might be worth it, even if the monetary return on your investment isn’t that great.

Adding More Space

One of the categories of projects that typically has the highest ROI is adding more space. This could include things like adding an additional bedroom, finishing unused attic or basement space or doing a home addition. Because buyers typically look at the total finished square footage as well as the number of bedrooms, having more of those can increase your home’s value.

Redoing a Kitchen or Bathroom

The conventional wisdom for home improvement ROI says “kitchen and bathrooms”. That means that in a general sense, updating a kitchen or bathroom (or adding additional bathrooms) provide the biggest and best ROI. That doesn’t mean that other projects are not worth doing — you’ll want to strike a balance between your return on investment and your own comfort and enjoyment.

Upgrading Your House with Smart Home Tech

Another home upgrade that is becoming more and more popular is upgrading your house with smart home technology. More and more buyers are preferring a home with smart home tech already in place and enabled. Here are a few smart home tech upgrades to consider adding to your home:

  • Smart thermostats
  • Smart outlets and light switches
  • Electrical energy monitoring
  • Smart locks, home security systems and/or video doorbells
  • Integration with home assistants like Google Home or Alexa
  • Integrated speakers and/or sound system

We are still fairly early on in the smart home revolution, so these items may not be worth it in a strict monetary sense. So you may want to focus on smart home tech items that would increase your standard of living and enjoyment or ones that provide an ongoing monetary benefit (like a smart thermostat).

Funding Your Home Improvement Projects

Depending on the size and scope of your home improvement project, you have several options for financing. If your project is small enough, you may be able to fund it from everyday spending or your savings account. For larger projects, you might consider funding it with a 0% interest credit card — just make sure to pay it off before your 0% introductory period ends. Another option can be getting a home equity loan or home equity line of credit (HELOC).

Getting a home equity loan or HELOC can be directly tied to your return on investment. If an appraisal will show that adding a kitchen, bathroom, bedrooms or other project will increase the value of your home, you may be able to get a loan based on the after-repair value of your home. This can provide additional funding options if you don’t have a ton of existing home equity.

The Bottom Line

If you’re like most homeowners, you have a very long list of possible home improvements to consider. There are two major factors to look at when considering whether any particular home improvement is worth it. The first thing to look at is its ROI — how much will it add to the value of your home compared to how much it costs. The other consideration is how much it will improve your life and the life of everyone you live with. Balancing these two considerations will help you make the best decision for you about whether a home improvement is worth it.

Save more, spend smarter, and make your money go further

Dan Miller
Dan Miller

Written by Dan Miller

Dan Miller is a freelance writer and founder of, a site that helps families to travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 kids. More from Dan Miller