Renovations that Yield the Best Return on Investment

The best places to use your home-improvement budget, plus renovations to avoid.

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As you aim for the best ROI, don't squander money with these renovations:

Home offices. A number of people work from home, but most don't need a full-blown office. If you do convert a spare room to an office, opt for removable furniture rather than built-in cabinets. Built-in furniture gives the buyer fewer options with what they can do with the room, says Gehman. A home-office remodel recoups only 43 percent, on average.

Sunroom additions. You may recoup a fair amount if you live in a region where the sunroom can be used all four seasons, but in most cases, adding a sunroom will get you nowhere near a dollar-for-dollar return. Sunroom additions were among the lowest on Remodeling's list in terms of recouping costs—a paltry 46 percent. "We always try to get [buyers] their top three 'must haves' and a sunroom is rarely one of them," says agent Dossman.

"I see almost no sunrooms going in right now," says Daniel Steinkoler, president of Superior Home Services, Inc. in Washington, D.C. "More people these days are working within their existing footprint to improve their home."

Remember: What's popular now changes about every five years—contractors call this "stylistic depreciation"—so consider how much longer you plan to stay in the home before you do any major renovations.

Twitter: @danielbortz