Highest ROI Renovations to Build Home Equity and Increase Resale Value in 2025

Renovating your home can unlock new equity and help you sell your house at a higher price. However, some renovations are more valuable than others. Knowing this information can help you strategically invest in the best ROI home improvements.

This guide explores the top renovations that increase home value. They are ranked in order from the highest to the lowest ROI.

Renovation	ROI	Added resale value
Steel door	100%	$600
Closet renovation	83%	$3,403
Fiberglass front door	80%	$900
Vinyl windows	74%	$370
Wood windows	71%	$923
Basement conversion	71%	$22,720
Attic conversion	67%	$13,400
Kitchen renovation	60%	$13,400
Kitchen upgrade	60%	$9,150
New bathroom	56%	$19,600

Table of Contents

1. How to calculate ROI on renovations
2. The 10 best home upgrades for resale value
   1. 1. Steel front door
   2. 2. Closet renovation
   3. 3. Fiberglass front door
   4. 4. Vinyl windows
   5. 5. Wood windows
   6. 6. Basement conversion to living area
   7. 7. Attic conversion to a living area
   8. 8. Complete kitchen renovation
   9. 9. Minor kitchen upgrade
   10. 10. New bathroom
3. Best ways to finance home renovations
   1. 1. Home equity loans (HEL)
   2. 2. Home equity line of credit (HELOC)
   3. 3. Cash-out refinance
   4. 4. Personal loans

How to calculate ROI on renovations

A helpful way to compare the value of different projects is by looking at their cost recovery—that is, the percentage of your investment you’re likely to recoup in increased home value when you sell. For example, if a $10,000 kitchen remodel typically adds $7,000 to a home’s resale value, it has a 70% cost recovery.

When you’re planning a renovation, you can use cost recovery estimates to get a rough idea of how much value a project might add. Start by researching the average cost of the project using tools like Angi (formerly Angie’s List) or HomeAdvisor, then apply the cost recovery percentage to estimate the return:

Average project cost x Cost recovery percentage = Increase in home’s value

That added value becomes part of your home equity, which you can tap into later through a sale, refinance, or home equity loan.

The 10 best home upgrades for resale value

To identify the most valuable upgrades for 2025, we reviewed the National Association of REALTORS® Research Group’s 2025 Remodeling Impact Report, which compiles cost recovery estimates based on surveys of homeowners, contractors, and real estate agents.

Using that data, we ranked the 10 renovations most likely to deliver a high return on investment this year.

1. Steel front door

• Average cost: $600
• Cost recovery: 100%
• Added resale value: $600

Steel front doors are one of the few home upgrades that can pay for themselves. With an average cost of $600 and a 100% cost recovery rate, you can expect to recoup your entire investment in added resale value.

But the benefits go beyond the sale price. Steel is a highly durable material that requires minimal upkeep, offers better security, and improves energy efficiency. By keeping warm air inside during the winter and cool air in during the summer, an insulated steel door can help reduce your heating and cooling bills—adding ongoing value long after installation.

2. Closet renovation

• Average cost: $4,100
• Cost recovery: 83%
• Added resale value: $3,403

Closet renovations offer a strong return on investment while also improving your day-to-day living. By creating more functional storage, you can keep clothing and belongings organized, freeing up space in other parts of your home.

This added organization can make your home feel more spacious, reduce stress, and simplify daily routines. And because closet upgrades are easy to tailor to your lifestyle and wardrobe, they add both practical value now and broad appeal for future buyers.

3. Fiberglass front door

• Average cost: $1,125
• Cost recovery: 80%
• New resale value: $900

Fiberglass front doors strike a balance between long-term durability and modern energy efficiency. While they cost more upfront and don’t offer the same return as steel doors, they provide value in other ways.

Unlike steel, fiberglass won’t rust, making it a low-maintenance choice that holds up well over time. Its insulation properties also help reduce energy costs, making it a practical upgrade that enhances curb appeal and comfort, even if the resale payoff is a bit lower.

4. Vinyl windows

• Average cost: $500
• Cost recovery: 74%
• Added resale value: $370

Vinyl windows are a practical upgrade that can also help build equity in your home. While they don’t recoup the full installation cost, they remain a popular feature among buyers thanks to their clean appearance, durability, and energy efficiency.

These windows can enhance curb appeal and signal to future buyers that the home has been well-maintained. Over time, their utility savings and widespread appeal can make them a smart investment for boosting both comfort and resale value.

5. Wood windows

• Average cost: $1,300
• Cost recovery: 71%
• Added resale value: $923

Wood windows offer a classic, high-end look that can elevate a home’s visual appeal—especially in older or architecturally distinctive properties. While they cost more than vinyl and require ongoing maintenance to prevent issues like moisture damage, they can add character and charm that some buyers are willing to pay for.

In the right home, wood windows can contribute to a premium feel that enhances perceived value and helps build equity over time.

6. Basement conversion to living area

• Average cost: $32,000
• Cost recovery: 71%
• Added resale value: $22,720

Converting your basement into a finished living space can significantly boost your home’s livability and market appeal. Whether used as a guest room, home office, or entertainment area, a finished basement adds valuable square footage that buyers often see as a major plus.

While the upfront cost can be steep, it’s a high-impact upgrade that can strengthen your home’s resale potential and contribute to long-term property value.

7. Attic conversion to a living area

• Average cost: $20,000
• Cost recovery: 67%
• Added resale value: $13,400

Attic conversions are a cost-effective way to expand your living space without a full addition. Often less expensive than basement renovations, they can add functional square footage for use as a bedroom, office, or flex space.

Even modest conversions can improve how your home functions day to day, while higher-end projects may enhance resale appeal. With the right design, an attic conversion can be a smart way to unlock hidden value in your home.

8. Complete kitchen renovation

• Average cost: $24,641
• Cost recovery: 60%
• New resale value: $13,400

A full kitchen renovation is one of the most impactful upgrades you can make—both for daily living and resale appeal. Beyond new cabinets, countertops, and appliances, a total remodel typically involves updated plumbing, electrical, and flooring to modernize the entire space. It’s a major investment, but one that can transform how your home functions and feels, making it more efficient, visually appealing, and attractive to future buyers.

9. Minor kitchen upgrade

• Average cost: $15,250
• Cost recovery: 60%
• New resale value: $9,150

A minor kitchen upgrade offers a budget-friendly way to refresh your space without a full remodel. These updates typically focus on cosmetic changes—like new paint, a backsplash, or cabinet hardware—while keeping the existing layout intact.

Swapping out older appliances or adding a new countertop can also boost functionality and appeal. It’s a strategic way to modernize the look and feel of your kitchen, often delivering strong visual impact and solid returns without the high cost of a full renovation.

10. New bathroom

• Average cost: $35,000
• Cost recovery: 56%
• New resale value: $19,600

Adding a new bathroom can be a game-changer for household convenience—especially in larger families or homes with limited facilities. It’s a highly functional upgrade that improves everyday comfort and can make your home more attractive to buyers.

While the cost can range widely depending on the finishes and complexity, even a modest bathroom addition can enhance resale appeal and increase your home’s overall utility and market value.

Best ways to finance home renovations

The right renovations can make your home more comfortable now—and more valuable later. Whether you’re upgrading your kitchen, adding a bathroom, or finishing a basement, improvements can increase resale value, reduce energy costs, and help your home stand out in a competitive market.

But big improvements come with big price tags. If you don’t have tens of thousands of dollars in savings, the good news is there are several smart ways to finance your project. With the right loan, your upgrades may end up paying for themselves through added equity and higher resale value.

Below are four of the best renovation financing options—along with top lenders to consider for each one.

1. Home equity loans (HEL)

A home equity loan gives you a lump sum upfront, with fixed monthly payments over five to 30 years. You start paying interest immediately. It’s ideal if you have a clear budget and want predictable payments.

Many homeowners use a HEL to finance improvements that directly increase their home’s value—like kitchen remodels or new bathrooms. Once the loan is paid off, you’re left with your original equity plus any new equity the renovation helped build.

2. Home equity line of credit (HELOC)

A HELOC works more like a credit card: you get access to a line of credit and only pay interest on what you borrow. You can borrow, repay, and borrow again during the draw period—usually 5 to 10 years.

It’s a great option if your renovation will be completed in phases or you want a financial cushion for unexpected costs. Just be aware that HELOCs usually have variable interest rates.

💡 Top pick: Figure
Figure offers a hybrid HELOC with a twist: you draw the full amount at origination (like a loan), but as you repay, you can redraw up to 100% of the funds within your draw period. Each draw comes with a fixed rate, giving you more payment predictability than a traditional HELOC.

3. Cash-out refinance

A cash-out refinance lets you tap into your home equity by replacing your current mortgage with a new, larger one. You pocket the difference in cash, which can be used to fund renovations—without taking on a second monthly payment.

This option works well for major projects, especially if you can refinance into a better interest rate or want to reset the loan term to manage monthly costs more effectively. It’s a streamlined way to free up cash and invest it back into your home.

4. Personal loans

If you don’t want to tap into your home equity, a personal loan can be a fast and flexible way to finance home renovations. These unsecured loans typically come with fewer requirements and faster funding—but may carry higher APRs than equity-based options.

Personal loans are ideal for smaller projects or when you need quick access to funds. There are no restrictions on how the money is used, and many lenders offer same- or next-day approval and disbursement.