Last updated: November 2025
Quick Answer
Home improvements that add value include kitchen remodels, bathroom upgrades, energy-efficient systems, and increased usable square footage. Appraisers prioritize function, quality, and market demand, not luxury extras or purely cosmetic updates.
Knowing what appraisers look for can help maximize your home’s appraised value during a VA refinance or equity-focused project.
Why knowing what appraisers value matters
If you’re planning to refinance or tap into your home equity, the appraised value will determine how much you can borrow. But not every renovation pays off. Some upgrades boost value on paper, others don’t move the needle at all.
Understanding what appraisers look for helps you spend wisely and avoid wasting money on projects that won’t count.
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What appraisers actually evaluate
Appraisers use a structured process to determine your home’s market value. Their evaluation includes:
- Comparable sales (recent nearby home sales with similar features)
- Size and layout (livable square footage and functional space)
- Condition and quality (materials, age of systems, visible wear)
- Permanent improvements (fixtures, structural changes)
- Location and market demand
The goal isn’t to reward personal style. Rather, it’s to assess features that impact resale value and meet local market standards.
High-value home improvements that increase appraisal value
Not all renovations are created equal. The key is focusing on upgrades with high appraisal ROI—improvements that not only look good but are recognized by appraisers as value boosters.
The following upgrades typically offer the best return on investment (ROI) and are recognized by appraisers during a refinance or home sale.
1. Kitchen remodels (midrange or minor)
Mid-range kitchen remodels tend to offer the best renovation payback, especially when paired with updated appliances and market-appropriate finishes.
Examples of impactful updates:
- New cabinets and counters
- Energy-efficient appliances
- Updated lighting and flooring
- Modern plumbing fixtures
Estimated ROI: 60%–80% depending on scope and location
2. Bathroom upgrades
Like kitchens, bathroom improvements that enhance function and comfort tend to increase appraised value.
Appraiser-friendly changes:
- New tile or vinyl flooring
- Upgraded vanities and fixtures
- Walk-in showers or efficient tubs
- Energy-saving toilets and lighting
Estimated ROI: 55%–70%
3. Finished basements or attics
Adding livable square footage is one of the fastest ways to boost value. Appraisers count finished basements and attics only if they meet local code requirements and are usable year-round.
What counts:
- HVAC access
- Finished walls, flooring, and ceiling
- Permitted to work with official documentation
Estimated ROI: 60%–75%
4. Energy-efficient systems
Upgrades that improve energy efficiency and reduce utility costs are increasingly factored into appraisals, especially for VA refinances.
Key systems:
- HVAC systems
- Insulation upgrades
- Energy-efficient windows
- Smart thermostats
- Solar panels (only when owned, not leased)
Tip: Document improvements and utility savings to help your appraiser assess value.
5. Added square footage (extensions, garages)
Building a permitted room addition or garage increases gross living area, which directly affects appraisal value.
Important notes:
- Must be attached or integrated
- Must follow code and have permanent heat
- Detached garages typically add less value
Estimated ROI: Varies widely by region and size, often over 70%
Upgrades that don’t significantly impact appraisal value
Some renovations look great but offer little to no boost to your appraised value.
1. Luxury finishes beyond market norms
Over-customizing with high-end marble, imported tile, or designer fixtures may not raise your appraised value unless comparable homes support it.
Example: A $15,000 custom kitchen in a $250,000 neighborhood may return less than half its cost.
2. Swimming pools and hot tubs
While attractive to some buyers, pools are costly to maintain and aren’t universally valued, especially in cooler climates.
Appraiser treatment:
- May add modest value in warm regions
- Often considered a neutral or liability elsewhere
- ROI is generally low (30%–50%)
3. Extensive landscaping
Appraisers note curb appeal, but elaborate landscaping projects rarely deliver direct value in appraisals.
Safe bets:
- Clean, well-maintained lawns
- Trimmed trees and shrubs
- Functional walkways and lighting
Avoid investing heavily in fountains, koi ponds, or complex gardens unless for personal enjoyment.
4. Detached structures without utility
A detached shed or studio adds limited value unless it’s finished, climate-controlled, and permitted for use.
Unfinished outbuildings are often valued solely for storage and not considered livable space.
5. Personalization and décor
Paint colors, wallpaper, murals, and décor are subjective. Appraisers ignore cosmetic choices unless they affect function or indicate neglect (e.g., peeling paint, damaged walls).
VA refinance and equity considerations
If you’re pursuing a VA Interest Rate Reduction Refinance Loan (IRRRL) or a VA cash-out refinance, the appraised value sets the ceiling for your loan amount.
To increase equity and improve appraisal outcomes:
- Focus on energy-efficient upgrades supported by the VA
- Provide receipts for any improvements completed
- Highlight permitted additions or remodels
- Avoid unpermitted or unconventional renovations
VA appraisals also assess property condition and compliance with Minimum Property Requirements (MPRs), so all upgrades must meet safety and code standards.
Planning upgrades for maximum appraisal impact
Before starting renovations, consider these appraisal-focused strategies:
- Research neighborhood comps: Match your upgrades to local expectations
- Pull permits: Unpermitted work won’t count and may lower your appraisal
- Document improvements: Save before-and-after photos, receipts, and contractor info
- Time your appraisal: Schedule it after renovations are complete and cleaned
Small strategic improvements can raise your home’s value without overspending.
Thinking of a refi or upgrade? We’ll help you plan smart.
If you’re planning a VA refinance appraisal, especially a cash-out or IRRRL, completing these upgrades beforehand can raise your home’s value and increase borrowing power.
From functional renovations to energy-efficient improvements, every choice affects your financial outcome.
FAQ: Home improvements that add value
A: Kitchen and bathroom remodels, finished basements, energy-efficient systems, and square footage additions typically offer the highest appraisal impact.
A: Only if they affect the condition or functionality. Paint and décor have little impact unless they’re damaged or poorly maintained.
A: Yes. If the solar system is owned outright. Leased panels may not add value and could even complicate financing.
A: Curb appeal matters, but elaborate landscaping offers low ROI. Stick to clean, functional upgrades like trimmed lawns and walkways.
A: Yes. If the renovations are completed and permitted. Improvements that raise appraised value can improve your refinance terms and increase borrowing power.
