With home prices near record highs and mortgage rates soaring, many homeowners are considering home renovation projects – some to sell their place, others to stay in place.

There are two main reasons to consider upgrades, replacements, and repairs. First, living in a spruced-up environment will improve your comfort and lifestyle. Also, the improvements will make your home more attractive to potential buyers if you’re planning to move over the next few months or years.

This article focuses on the best things you can do to upgrade your home, whether you’re planning to stay or getting ready to put your home on the market.

Why Home Improvements Are Important

The real estate market is shifting. Just a few months ago, sellers were in control. They often put their homes on the market “as is” with no significant repairs. Buyers were willing to forego home inspections, contingencies, and other elements usually part of housing transactions. But that is no longer the case.

So, whether you’re selling now or years from now, you’ll want to factor in your return on investment (ROI) because many projects can be costly.

You can never get all your money back after an upgrade, but different projects yield different returns. Perhaps more importantly, you could set your home above others on the market, making it easier to sell. And that could be a big deal, especially since the sellers’ market, where buyers engaged in bidding wars, seems to have ended in most areas.

So, if you are ready to renovate, there are two schools of thought about which projects to undertake to make the most significant impact on homebuyers. Some say buyers are wowed by upgraded kitchens and bathrooms or turned off when those rooms look dated. But others say those repairs are too costly and too time-consuming. They say, instead, you should focus on smaller fixes that freshen up the overall look of your home, such as a fresh coat of paint and new or refinished hardwood floors.

Go Big: Bathrooms and Kitchens

Shiny granite counters, new wood cabinets, and new energy-efficient appliances could grab potential buyers’ attention, especially those looking for a home in “move-in” condition. The downside is that it can be very pricey as well as disruptive. Some realtors say a modern, updated kitchen is a “must-have” element for buyers. But the cost often runs in the tens of thousands of dollars, and you are unlikely to recoup all of your investment.

There are some less expensive, halfway measures you could take, including new cabinet handles, new fixtures, an eye-catching backsplash, and a new dishwasher.

The numbers on how much of your investment you get back are all over the place. Many estimates say your ROI is likely in the 50%-to-75% range, but according to FortuneBuilders.com, a major kitchen renovation returns 91%, while a minor remodel returns more than 98%.

That website says the returns on fixing up the bathroom are even higher. A minor bathroom remodel could include replacing the vanity, the shower head, the lighting, and the mirror. But even a minor remodeling job can cost more than $10,000.

Floor It!

One of the projects with the highest return on investment involves hardwood floors: refinish existing hardwood or replace the carpet in some rooms with new wood floors.

It looks great in photos when buyers look online, which is the most common way of home-shopping these days. By some estimates, new hardwood floors can return more than 100% of your investment when it comes time to sell.

Hardwood can be especially important when trying to sell a condo or coop apartment. It can give a look and feel of more space.

Paint By The Numbers

A fresh coat of paint may be one of the easiest and most important changes you can make. Many realtors say it can make a bigger impression on house hunters than other far more costly renovations. It helps create a feeling of space, cleanliness, and warmth.

A fresh coat of paint might also work wonders on tired-looking kitchen cabinets.

One word of caution: while you might like a rich blue or green hue, if you’re painting to sell, stick with bright, neutral colors.

In addition to the interior, also consider painting the exterior and the front door.

Curb Appeal

It’s awfully hard to change first impressions. Make sure potential buyers like what they see when they drive up to your home.  In addition to the fresh paint, put some money into landscaping. It doesn’t have to be anything fancy. Make sure the lawn is cut, the trees and bushes are trimmed, and a few well-placed plants are visible.

The cost could run from a few hundred to a few thousand dollars. Experts say your return on investment here is excellent as long as you don’t go over the top. You also don’t want the landscaping to be so extensive that it shouts “lots of maintenance” to buyers.

Other Home Upgrade Options

Here’s a list of other things you can do to improve the sale-ability of your home without breaking the bank:

• Renovate closet space
• Install smart thermostats
• Replace old shower curtains
• Stage your home by removing clutter and family photos, and give some rooms that are overstuffed with furniture a make-over
• Eliminate strong odors from pets or cooking that may not bother you but could turn off someone else
• Improve the insulation
• Fix cracks on sidewalks, driveways, stairs, and walls
• Don’t Throw Your Money Away

While many of the suggestions outlined above offer a pretty good return on investment, a few upgrades are likely to lose money. In particular, putting in a new swimming pool is a lousy idea.

Other things not to do:

• Don’t eliminate a closet to create a small home office
• Don’t upgrade your home so that it’s too fancy and too expensive for the neighborhood
• Don’t start do-it-yourself projects beyond your expertise
• Don’t spend lots of time and money on details that don’t matter to anyone but you
• Don’t spend too much money on items that will not give you much return on investment
• The bottom line is that you may need to invest some money to make the sale. And remember that many house hunters will make a decision about the homes they visit within the first few minutes. That means it’s important to create a positive first impression through landscaping, your front door, exterior and interior paint, and hardwood floors.

The real estate market has shifted dramatically in the past few months, and selling your home may take a little more work. But the rewards for making some repairs and renovations could well be worth the time, effort, and money. And if you don’t sell now, think of how much you’ll enjoy your newly renovated home!