The key is knowing what upgrades increase home value when the time to sell inevitably comes, as your ROI depends on the type of house you’re selling and whom you’re selling to.

As you plan your next renovation project, it’s more critical than ever to know what upgrades increase home value. The world looks a lot different in 2022 than it did a couple of years ago, and our homes have been at the center of massive change and re-evaluation. If your house just went up for sale, then the ideal buyers are those people who are buying their very first property. When it comes to selling a home, it’s essential to attract potential buyers. Even if you’ve listed your home with great photos, you should never underestimate the power of first impressions.  

With smart home upgrades, get more buyers through the door and “wow” them once they arrive. Often, buyers make their decisions about a property when they first see it from the outside. For this reason, well-presented homes typically sell faster than other properties. 

One of the easiest ways to increase the equity you have in your home is to add value through updates and upgrades. However, home improvements are not all created equal. We chose five that offer a significant return on investment (ROI) – both in the enjoyment they’ll add to your time in the home and the potential for a higher price when it’s time to sell.

Mostly millennials, these are buyers who know exactly what they want and have familiarized themselves with the real estate market.

However, don’t expect prospective first-time buyers to splash their cash on just any old house. Home offices and outdoor spaces, for example, are now extremely coveted features.

Specifically, some home upgrades tend to be more appealing to those in the millennial buying bracket. As you think about the best way to sell a property, keep these upgrades in mind:

-- Smart home technology.

-- Gathering spaces.

-- USB chargers.

-- A home office.

-- Energy-saving appliances.

-- Neutral colors.

-- Garage technology.

If you don’t know where to get started, here are some easy home upgrades you can consider to make your home more appealing to buyers:

Kitchen and Bath Upgrades

According to a National Association of Realtors survey, kitchen upgrades topped buyer wish lists, with bathroom renovations not far behind. Real estate agents and homeowners found that upgrading these spaces had a positive impact, both on the owners’ home enjoyment and the appeal to potential buyers. 20% of agents said that a kitchen remodel had helped them close a sale.

Before you go all out, it’s wise to discuss popular styles with a real estate or design professional. To maximize your ROI, you’ll want to choose a look that’s trendy and appealing to the buyers who are looking in your market. This is an area where you can easily spend a lot, so make informed choices that are likely to pay for themselves down the road.

Outdoor Spaces

Lawn/ landscape improvements and maintenance, tree care, and installation of an irrigation system offer improved curb appeal and easier upkeep for homeowners. This can translate into optimal ROI: in fact, lawn service was found to return 267% of the value of the investment, while tree care returned a full 100% of the initial investment.

You can enhance the improvements to your outdoor spaces further with upgraded lighting, exterior audio, and other elements to make them more functional and attractive. In addition, an upgrade like a firepit with added seating can add even more value at a minimal cost. The best part? Many lawn and landscaping improvements can be fun and easy family DIY activities and are also affordable to outsource if needed. When discussing home improvements with your real estate agent, they might suggest adopting a décor and design approach that makes the outside of the property feel like an extension of the home – and they’ll be right.

Millennial buyers want to invest in a space that can truly become their home, the home of their family and pets, and a place to gather with friends. Even if the rest of the property has been renovated extensively, a run-down backyard that doesn’t seem inviting is enough to put millennial buyers off immediately.

It’s important to think about differences in perception of certain outdoor improvements in different climates. In the South, pergolas, elaborate decks, and pools are powerful selling points in a home sale. In colder climates where they’re only used three months a year, excessive upgrades might not generate significant ROI. Overly complicated or expensive outdoor elements can present a maintenance hassle, costing more money for upkeep than they return in utility.

An energy-efficient home & appliances

The hype about protecting the environment had long ago swept the planet. However, (future) homeowners of today expect their new home not only to be eco-friendly in design but to save money as well.

An energy-efficient home is something that you shouldn’t put the house on the market in the first place. A single solar panel can increase the value of the property by at least a four-figure amount.

When selling a home in the 21st century, it goes without saying that the efficient use of energy is a global burning point. For this reason, millennial buyers might be more likely to opt for energy-efficient appliances, instead of outdated fridge or stove that drains power faster than you can say “climate change”.

The millennial generation is especially attentive to their energy usage and increasingly chooses the eco-friendly option over its power-hungry ancestors. Upgrading to energy-efficient appliances might not be the cheapest option, but it is very likely to make a younger buyer much more interested in acquiring the property.

Modern design

If you decide to upgrade the permanent fixtures in rooms like the bathrooms or kitchen, opting for modern fixtures is more likely to appeal to the millennial buyer. Out-dated color schemes and appliances have made way for sleek surfaces and modern features, and these will be all the rage among a younger group of buyers. A minimalist approach with sleek and simple lines is key here. Like with all home staging, you want prospective buyers to imagine themselves in the space, and a modern design approach will speak to the generation that it represents. 

Light, neutral wall colors make for a good palette for resale because buyers can imagine their belongings in the space, our experts say.

They also help your home look its best in online photos and listings. Paint is the cheapest thing you can do, and it brings such value. It brings people in the door. Most house hunters prefer soft, neutral colors to anything bright or garish, and millennials are no exception. So, try to look for those soft grays or warm tans when repainting.

Add Some Outdoor Lighting 

If you want to highlight all the home exterior upgrades you’ve made, it’s never a bad idea to add some outdoor lighting. Not only make your property look more attractive, but it also makes your buyers feel safe and welcome. For instance, if you want to show off your property, you can install two sconces or a stylish hanging pendant over the entrance. To impress your buyers, add motion sensors to all your outdoor lighting or opt for solar path lights.

Garage Upgrade

Newer garage door openers are equipped with remote technology, allowing you to open and close the door from an app. This can be a smart gesture toward the lifestyle of your potential buyers. Many garages have sparse and uncomfortably placed power outlets, which won’t appeal to millennial property buyers who drive electric vehicles. If you are looking to impress this tech-savvy, environmentally aware group of buyers, you’ll do well to have an electrician add power outlets that can be specifically used for charging cars. It’s a relatively cheap improvement, but young buyers will appreciate this touch when it is pointed out to them.

A new garage door is also likely to be worth the investment. These elements not only improve the way your home looks, but they can offer added security and functionality, as well as energy efficiency. Updated hardware, lighting, and other decorative elements can make these upgrades even more impactful.

A Home Office

If you have created a home office space inside the house, don’t dismantle it just yet. As the number of people working remotely increases so does the demand for ready-made home offices. Historically, real estate agents have advised against having home office spaces, simply because they have generally not been very attractive to buyers. In recent years, that's started to change, especially among younger professionals. Remote work opportunities are on the rise, and millennial buyers may be eager to find a space that's created for them to set up shop.

If your house has more than a couple of bedrooms, you may consider configuring one to look more like an office setting, simply demonstrating to buyers how flexible the space can be.

Rental Potential

A home with rental potential offers the best of both. A guest house, an apartment above a garage, or renovated basement with a separate exterior entrance offers you the ability to bring in a renter, which can even cover some or all of your mortgage.

Keep the following guidelines in mind to ensure the maximum ROI for your home upgrades:

• While you’ll certainly be guided by your design aesthetic, be careful of changes that are highly unusual or eccentric. Overly bright or dark colors, out-of-the-ordinary finishes, or excessive theming can be off-putting to potential buyers who don’t share your taste.

• Be careful of over-the-top improvements that are out of keeping with other homes in the area. While a gourmet kitchen with top-of-the-line luxury appliances may be nice to have, you probably won’t realize solid returns on the improvement if it’s located in a neighborhood of more modest homes.

• Similarly, be careful of improvements that don’t make sense for your market or climate. While you and your family might love a pool or an elaborate outdoor entertaining space, make sure they have utility in your area.

Stage the home

First-timer buyers have a hard time imagining what their new place might look like. It’s not that they lack imagination; it’s more of a question of experience they lack.

They might assume that a king-sized bed would fit perfectly well inside your bedroom but the reality could not be more different. That’s why a staged home helps them make realistic projections about the future look of the property. Staging a home ensures that buyers see it in its very best light, and can help illustrate what a property can offer without requiring a complete makeover. And in an industry were making a great first impression can make all the difference, it’s easy to see how staging has become such an integral part of the selling process.

Storage space

Storage space isn’t just important to potential buyers. Most homebuyers will be put off by a lack of built-in storage in the house, already anticipating that they’ll have to spend money on alternative storage space or furniture. For this reason, consider adding closets in rooms that don’t have them built in, and also look for multifunctional pieces of furniture that can double as extra storage space. While often overlooked, storage can be one of the most crucial elements to a happy, healthy, and organized living or workspace. But all too often, storage is used in homes and offices to conceal the piles of clutter that don’t have a designated “place”. Whether you are a business owner or a homeowner, you are going to need to look at storage options at some point in your life, and this is why you have to consider self-storage. More and more people are using storage units these days, and it’s not hard to understand why.

The best way to get first-time buyers interested is to leave a good first impression, naturally. Try to boost the house’s curb appeal by paving the driveway, painting the front door and the front façade, as well as mending the mailbox. As the final touch, you might add a house number that glows in the dark. Selling a home can be stressful, especially if you don’t know how to attract buyers. Luckily, by considering any of the home exterior upgrades in this post, you’ll help boost your property’s curb appeal while allowing you to catch your potential buyers’ attention effectively. Just remember to avoid overspending and hire professionals for expert help to present your home most desirably.