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The Impact of Home Remodeling on Property Value

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Roey & Gil

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According to the Harvard Univerity Joint Center for Housing Studies, Americans spent roughly $567 Billion on home renovations in 2022. Reinventing your home with a renovation has always been a dream, but not all home improvements are created equal. Some renovations can add serious value to your home. Others, unfortunately, can actually lessen the value of your property and make it less attractive to potential buyers.

Whether you are planning to stay in your home for years to come or are considering putting your home on the market, spending your money thoughtfully on renovation projects with a high return on investment, or ROI, is the best way to protect your home’s value or make potential homebuyers take notice of your property.

home valuation
Will your renovation project ultimately yield added value to your property?

How Do You Calculate Property Value After Renovation?

The first step in planning successful renovation projects, including asking the right questions or finding the best home remodeling company in the Bay Area, is understanding your proposed project’s potential return on investment or ROI. Basically, the ROI is the average payback you can expect from your initial investment.

In terms of real estate ROI, you need to calculate the investment gain divided by the initial cost of the investment. In most cases, an ROI of 70% or more is considered a safe investment. Calculating this metric on your own can be tricky unless you are a seasoned real estate agent or an economist!

Instead of performing a cost recovery analysis or becoming a novice real estate investor, look to the professionals at Clever Home & Remodeling to help you determine if upgrading your bathroom or kitchen, or springing for a finished basement, makes good financial sense.

Keep Your Location in Mind When Planning Your Renovation

You’ve always dreamed about having the most modern, elegant, and sophisticated house on the block – and are ready to spend money to achieve this goal. Unfortunately, there is such a thing as over-improving your home – especially if your improvements push your home’s value well above that of your neighborhood average. Buyers are attracted to a home that is well-maintained and within their price range, especially for the area. Instead, consider your home’s value and the value of other homes in the area when creating a budget.

Top 6 Renovation Projects With the Highest Return on Investment

Are you ready to invest in renovation projects with the best return on investment? When renovating any room in your home, remember your tastes and which upgrades and improvements will appeal to prospective buyers. Here are six interior renovations that have the best ROI:

Stone Veneer

Exterior stone accents are one of the hottest trends in home renovations – which is why it has one of the highest ROIs in today’s real estate market. You can expect an ROI of roughly 91.4%! Opt for manufactured stone veneer, which is made from a combination of pigments, aggregates, and stone and is much more cost-effective than natural stone. The veneer can be used to accent almost every area of the home, from the exterior siding to your fireplace or kitchen backsplash.

kitchen remodelling
First impressions of a home are often made in the kitchen since it will incur the most footfall

Kitchen Renovations

Kitchen renovations are very popular – and for good reason! Think about all the time you spend in your kitchen and how much a functional and elegant kitchen can set the tone for the rest of your home. A major or minor kitchen remodel has one of the best ROIs. You can expect an ROI of 98.5% for a minor kitchen remodel. If you opt for a major remodel, the ROI is an impressive 91%.

Kitchen remodels are highly valued amongst homeowners and potential buyers alike. If you choose the right materials, from high-end natural stone countertops to handcrafted cabinets, you can make your home stand out from the rest. If you are ready to plan a high-end or simple kitchen remodel, contact the pros at Clever Design & Remodeling.

bathroom renovation
No matter your bathroom size, a pristine makeover will be a major selling point!

Bathroom Remodel

In addition to any home renovation in your kitchen, prospective purchasers will look to the features and finishes in your bathroom next. A home’s resale value is based on the number of bathrooms in the house and if the bathrooms feature high-end finishes and functional storage space. If you want to get the highest payback from your home improvement budget, you cannot go wrong with a major or minor bathroom remodel.

A minor bathroom remodel has one of if not the best ROI of all home improvement projects at 102%! Ensure you receive the biggest ROIs by concentrating on repairing cracked tiles or leaking faucets before cosmetic upgrades. Adding square footage with a small guest bathroom or powder room is another excellent option.

Whether you decide to upgrade your master bathroom or install a new vanity and flooring in a first-floor guest bathroom, the team at Clever Design & Remodeling can help you plan and execute any bathroom remodel – no matter how minor or expansive.

basement renovation
Basement renovations can transform what may have been a storage or boiler area into a whole new living space

Basement Remodel

Want to transform your basement into a liveable space? A basement remodel has a great ROI of 90.1%. As with every other major remodeling project, there are ways you can increase your home value while transforming your drab basement into a space to entertain friends or family – or maybe even build that coveted man cave!

Start with waterproofing, including adding a vapor barrier and improving drainage. Next, work with a professional team to determine the project cost and how you want to transform this underutilized living space. For example, our San Jose bathroom designers might recommend adding a small bathroom in the basement, especially if you are altering the space into a guest bedroom.

attic conversions
Just as with the basement, attic conversions can add a living space for growing families

Attic or Basement Bedroom Conversion

Do you have a growing family and want to stop the inevitable fights that occur when your kids share a bedroom? Is your aging parent moving into your home, or do you finally want to have a dedicated guest bedroom? Converting the unused spaces in your home, particularly the basement or attic, into livable space has a fantastic return on investment of 93.5%.

Before planning an attic or basement bedroom conversion, determine if there is adequate insulation. In the case of an attic conversion, perform any necessary repairs to the roof to ensure proper ventilation and no leaks. Another bedroom is not only convenient, but the additional space can also significantly increase the overall value of your home – which can ensure you get top dollar if you decide to sell your home in the near future.

new windows
Let there be light! The sun has a positive effect on our mood – allowing maximum natural light into your home will be a guaranteed selling point!

Window Replacement

The housing market is competitive, and many potential buyers are more interested in purchasing a home with great bones rather than a property with flashy upgrades and top-of-the-line finishes. Sure, new windows aren’t the most exciting home renovation project, but if you are planning on selling your home and want to stand out, your replacement windows have an ROI of around 80%. They will definitely be very desirable to prospective buyers.

outside renovations
Here are some ideas to improve your homes exterior appeal

Outdoor Upgrades That Can Improve Resale Value

Your home’s curb appeal not only impacts your home’s resale value but also has a significant impact on the first impression of your home for potential future owners. Want to ensure that you improve your home’s exterior while enjoying a great return on investment? Here are three of the best outdoor upgrades that can dramatically improve your home’s resale value.

Consider New Siding or a Fresh Coat of Paint

Forget expansive construction projects and, instead, have a professional install new siding on your home. The ROI is very high, especially if you choose vinyl siding. If you have wood, vinyl, or even aluminum siding that is still in great shape, you can pay a professional to paint the siding rather than opting for a more expensive replacement. Repainting your siding is a great, low-cost renovation that can have a significant impact on your home’s value and curb appeal.

New Roof

The ongoing maintenance of any home can be brutal and very expensive. If your home needs upgrades, and you aren’t sure if you should splurge on new garage doors or invest in a new driveway or garage door, the best option by far is to have a new roof professionally installed on your home. In addition to having a high ROI, potential home buyers will be drawn to houses with a new roof simply because of the expense and hassle of installing the roof themselves. Asphalt roofing is the most common material, but a metal roof has a better return on investment.


A new roof costs roughly $30,000, or anywhere between $8 to $40 per square foot. Want to upgrade your home’s siding? Be prepared to pay between $9,000 and $23,000, depending on the type of siding and your home’s size. If you want to raise your home’s value without draining your bank account, landscaping is a great option!

Start with a well-maintained lawn. Don’t go overboard because potential buyers want a lawn that only requires basic yard care. Add some shrubs surrounded by bark mulch, planters, lighting, and a well-landscaped path to the front door. A well-placed pop of color won’t cost much, but it will considerably impact your home’s exterior appeal.

Add or Upgrade Your Backyard Deck

Nothing compares to enjoying a quiet cup of coffee on your sprawling backyard deck. A well-designed wooden deck has a fantastic ROI and is an excellent project if you want to increase your home’s value while enjoying the beauty of your backyard.

Want to learn more about how renovations can impact your home’s value? Do you have more questions about how Bay Area contractors can help make your dream renovations a reality? At Clever Design & Remodeling, our team of home remodeling contractors can help you plan an affordable and fantastic interior and exterior home renovation project. We specialize in building decks of all sizes and shapes, and our award-winning deck builders can help you design and construct a deck worthy of your backyard barbeques!

Going Green: The Best Energy-Efficient Home Improvements

The goal of your home improvement project is very simple: Create a more stylish, functional environment. Keeping your home’s energy efficiency in mind throughout the process is the perfect way to save money on your monthly energy bills and attract buyers to your home. The best energy-conscious improvement is new insulation. Choose spray foam insulation, which is more expensive upfront but can save you hundreds or even thousands over the next few years.

Swap out your current appliances for newer, sleeker, energy-efficient models. Look for the “Energy Star” logo on the appliances, which means the appliance meets the very stringent energy standards of the United States Department of Energy. Even something as simple as replacing your older-model thermostat with a programmable model can save you a lot of money!

Do Home Improvements Always Add Value to the House?

With home values and home prices constantly on the rise, you want to ensure that you can recoup your remodeling investment. Unfortunately, not all home improvements are created equally, and some interior and exterior renovations can negatively impact your home’s value. Here are a few of the worst remodeling projects if you are trying to attain the best return on your renovation investment:

  • A swimming pool
  • Built-in electronics
  • Solar panels

Remember that ROI isn’t everything, and if you are planning on staying in your home for several years and would love to install an inground swimming pool, go ahead and realize your dream!

Clever 3d model app
Unsure of what your ideal remodeling project should look like? Let our 3D rendering app (link below) inspire you!

Don’t Get Stuck in a Design Rut: Finding Inspiration for Your Remodeling Projects

Not everyone is a kitchen design expert; chances are, you will need a lot of help designing your fantasy kitchen, bathroom, master bedroom, or home addition. Home design trends are constantly changing, and if you feel like your aesthetic is out-of-touch, there are several simple ways you can find inspiration for your remodeling project:

Talk to a Real Estate Agent

Real estate agents are not only integral to selling or purchasing a house, they are also well-versed in the hottest design trends. If you aren’t already working with an agent, visit the National Association of Realtors website to find a qualified real estate agent in your area. The agent can help you determine which renovations appeal to potential home buyers and which you should avoid.

Subscribe to a Popular Design and Remodeling Magazine

Nothing compares to the excitement of purchasing design and remodeling magazines and flipping through the pages to get a little inspiration! From House Beautiful and Architectural Digest to The World of Interiors and Elle Decor, several interior design and remodeling publications have been providing helpful tips and starting points for homeowners across the United States.

Check Out the Latest Remodeling Apps

More homeowners are looking to technology to find inspiration for their home improvement projects. Several excellent remodeling applications can help you start the renovation process and give you a rough estimate of the project’s finished look and cost. At Clever Design & Remodeling, we are proud to offer our customers one of the most user-friendly kitchen remodeling apps that can provide you with a basic 3D model of what your new kitchen could be!

Does Remodeling Increase Your Home’s Equity

The equity in your home is the fair market value of your home minus whatever you still owe on the property. For example, if your home is worth $950,000 and you still owe $700,000, your home’s equity is approximately $250,000. Your home’s equity is important, especially if you want to refinance the property or apply for a cash-out refinance – a term that will be discussed later.

There is another instance when having positive equity is critical: Selling your home. The more equity you have built up in the property, the more money you will earn after your home is sold, and you factor in all the related fees. Choosing upgrades with your equity in mind is vital, and here are a few of the best to choose if you are planning on selling your home for a profit:

  • Bathroom Remodel
  • Kitchen Remodel
  • Outdoor deck construction
  • Energy-efficient upgrades – including new windows

Consider a room addition if you want to improve your home while increasing your equity. Adding any square footage to your home will always increase its value – particularly if you add a bathroom or bedroom.

Renovations can easily spiral into a money pit. Sit down and formulate a realistic budget that you know you can stick with!

Do and Don’ts of Financing Your Renovation Project

You have a vision for your home – but not the finances to transform your space. Several options are available, from saving and borrowing from family to shopping for the best home equity loans. However you choose the finance your project, keep these simple dos and don’ts in mind:

Do Start By Creating a Realistic Budget

First and foremost, start the project with a realistic budget. Never spend more on a single room than the room’s value, based on your overall home’s value. For example, if your home is worth $650,000, the renovation costs should not exceed $65,000. Several helpful websites can provide you with a simple value report for your home based on your home’s location, layout, and square footage.

Don’t Borrow More Than You Can Afford to Pay Back

Talk with several different lenders and compare quotes, just like you did back when you secured a mortgage. Consider the terms, the interest rate, and how long you must repay the loan. Do not burden yourself with a loan you cannot afford to pay. Instead, choose an amount you are comfortable with and plan your renovations accordingly. This might mean scaling back on the upgrades or only completing part of your dream renovations now.

Do Understand the Difference Between a HELOC and Cash-Out Refinance

Many people refinance their homes and put that money toward their renovation budget. However, not all secured loans are created the same, so make sure you understand the two most popular options: A home equity line of credit and home equity loans.

A home equity line of credit, or HELOC, is a type of revolving line of credit that allows you to borrow all of or a portion of a line of credit. Once you repay what you borrowed, you can tap into this line of credit again. HELOCs typically feature variable interest rates, and the terms can sometimes be confusing.

Choose a home equity loan if you want a more straightforward secured loan. This type of loan allows you to quickly borrow against your home’s equity, and you will receive one lump sum. The interest rate is fixed, allowing you to budget the payment accordingly. Each bank will have its own terms and interest rate, depending on your home’s equity and your credit score.

home remodelling
Renovations can be a balancing act between what you want to do an what you should be spending. Find a happy medium and you wont be out of pocket!

In Conclusion

Planning home renovations is exciting and a little overwhelming! Whether knocking down walls and completely overhauling your kitchen or simply repainting and retiling your master bathroom, you must consider several factors. Do not over-improve your home, as it will increase the value far above those in the neighborhood, making it difficult to sell your home in the future. Consider the return on investment and do your homework while creating a budget and finding the best way to finance the project.

clever remodeling team
Contact our team at Clever Design and Remodeling today and lets get started!

Ready to Start Your Five-Star Renovation Project? Contact the Pros at Clever Design & Remodeling

Are you ready to maximize your renovation budget and choose projects that are breathtaking and provide you with an impressive ROI? Look no further than one of the best home renovation companies in San Jose, California: Clever Design and Remodeling! With several years of experience serving our outstanding customers throughout west-central California, we are ready to help you remodel each and every room in your home.

clever remodeling team
Our ADU’s are built to the highest professional standards!

Services We Offer

At Clever Design & Remodeling, our primary goal is simple: To help you realize your dream. Whether you want to work with our awarding winning team of bathroom remodeling contractors or wish to design and create a kitchen any professional chef would envy, we can help you through every step of the process. Want to take a look at the finished projects of our very satisfied clients? Here are just a few of the many examples of our past successful renovation projects.

We Specialize in Accessory Dwelling Units

Accessory dwelling units, or ADUs, have become very popular over the last few years. A well-constructed ADU can act as secondary housing for a family member or as a fun way to earn an extra rental income. Designing and constructing an ADU should always be handled by a professional firm that understands California’s unique zoning and building codes.

Luckily, the fantastic team at Clever Design & Remodeling is well-versed in every aspect of constructing a successful ADU unit, from securing the proper permits and designing the space to constructing your ADU to your unique specifications.

call clever today
Call us today for a free consultation. You’ll be glad you did!

Ready to Get Started? Contact Us Today!

Are you ready to work with one of the most well-respected design firms in San Jose, California? Contact us today for a free consultation on your next home remodeling project!

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