Things that don’t add value
As a rule, repairs do not add value to a house, but the need for repairs subtracts equal value from the house.
The condition of the roof does not affect value, except when it needs to be done soon. And re-roofing is costly. The same applies to repiling. It pays to check that the electrical and plumbing systems are compliant, as bringing those up to scratch often involves significant costs.
Structural repairs are well known for blowing out budgets. In the same way, recladding often goes well over budget and can leave lingering issues. Best to avoid these like the plague. The houses are cheaper, yes, but you will quite likely spend the entire price difference and then some on repairs. Water-damaged houses are similar, in that the extent of the damage is not always knowable off the bat and may blow out repair costs.
Asbestos and lead paint removal don’t do anything for you, either, but cost a bomb if you need to get them done.
Insulation and double glazing are a special case. They do add value, but not as much value as they cost. Heat pumps could go either way, either you break even installing them, or you don’t. It’s usually worth putting them in anyway, for personal comfort or for attracting a better class of tenant, but the return on your investment will not be seen in an increased valuation of the house. Ditto adding a garage.
Things that do add value
Popular wisdom is that the easiest and most popular places to add value are the kitchen and bathroom. For a kitchen renovation on a budget, painting the cupboards and changing their handles makes an unbelievable difference in buyer appeal. For bonus points, the countertop itself can be updated using spreadstone, or replaced entirely. Countertops are relatively cheap compared to cabinets. New appliances (depreciable!) also serve to modernise a kitchen and increase its appeal.
As for bathrooms, the same applies. Modernise the toilet, vanity and shower. Consider whether to use a shower over bath, or a separate bath, or no bath at all – note that families with small children like to rent houses which have baths. For houses with 4 or more bedrooms and only one bathroom, the addition of a second toilet is well worth it.
A general cosmetic refresh always goes over well with buyers. This includes new paint and carpet, as well as smaller items like light switches, lamp shades and curtains. Staging the property also helps, and is well worth the investment. Curb appeal is also important, so that hiring a landscaper pays off.
And of course, property reconfiguration has significant potential. If an interior wall can be added to provide an extra bedroom, or removed to open up a cramped living/dining area, the property gains value well in excess of the cost of putting up one wall. By changing a hot water cylinder to infinity (either electric or gas), the space it formerly occupied can be put to better use.
There’s always subdivision and minor dwellings, too…