7 Home Improvements That Increase Value

Although home renovations can be a significant financial investment, a home improvement loan is designed to help ease the burden. This type of loan funds a wide range of projects to add comfort, function and appeal to your home.

However, some home renovations create more value than others. Before applying for a loan, take the time to review all options for renovations and home improvements to get the most out of your investment.

What is a home improvement loan?

A home improvement loan offers eligible homeowners an unsecured loan to update, upgrade or renovate a home. As one of three common ways to finance home improvements, these loans don't depend on your home equity and differ from home equity loans or lines of credit.

Because home improvement loans are unsecured and not associated with your home's value or ownership, the application is more straightforward than other forms of home improvement financing. One of these loans could be a good option if you want to increase your home's value with renovations, have little home equity or need the money quickly.

Which home improvements add the most value?

Whether you're choosing among several renovation projects or trying to prioritize your list of changes based on your budget, it's helpful to know the return on investment, or ROI, of each project to help you decide where to start.

1 Closet additions

It seems like everyone wants more storage space, so adding a closet or two for your own family's enjoyment makes sense. Even better? According to the Home Remodeling Costs Guide, it's the third most popular investment for 2023, with a 100% ROI. In other words, you'll get your money back on closet construction and material costs dollar for dollar.

2 Garage door replacement

Updated garage doors help elevate a home's appearance while adding functionality and curb appeal. That's why second only to HVAC conversion in the 2023 Cost Versus Value Report. A national average job costs just over $4,300 and adds $4,418 to a home's resale value, allowing you to recoup more than you paid for the replacement.

3 Manufactured stone veneer

Adding manufactured stone veneer—which costs an average of $10,925, according to the cost-versus-value report—is a relatively simple home improvement that may dramatically change your home's exterior appearance. This addition could increase your home's value by $11,177, with an average ROI of 102.3%.

4 Kitchen remodels

Kitchen remodeling projects also may increase a home's value. The kitchen is the centralized gathering spot for most families, making them a popular space to renovate.

Adding energy-efficient appliances, countertops, sinks, faucets, flooring, a fresh paint job, and new doors and knobs to existing cabinetry costs an average of $26,790. These renovations could add as much as $22,963 to your home's value, with an ROI of 85.7%.

5 Siding replacement

You can replace outdated, faded or damaged siding with new fiber-cement siding to dramatically change the look of your home. For an average cost of $19,361, the value increases by an average of $17,129, with an ROI of 88.5%.

6 Window upgrades

Replacing old, drafty windows with new energy-efficient models is a popular way to both change the look of your home and save on energy bills. It's also one of the top home improvements that may increase value.

By choosing vinyl windows at an average cost of $20,091, your home's value increases up to $13,766 and delivers an ROI of 68.5%. If you go with wooden windows at an average cost of $24,376, the value jumps to $14,912, with an ROI of 61.2%.

7 Deck additions

Adding a deck to your home gives you added outdoor living space to entertain friends and family. It's also a popular—and relatively simple—home improvement project. According to Zillow's Home Sellers Guide, expect to pay around $19,248 for a new wooden deck and add a resale value of about $12,464, with an ROI of 64.8%, or $24,677 for a new composite deck and add a resale value of $15,315 with an ROI of 62.1%.

Whether you're thinking of financing a renovation to create your dream home or get more money when selling, a home improvement loan could help you complete the renovations you want now instead of down the road.