The business of remodeling kitchens and baths has benefited over the years from homeowners’ belief that upgrading key areas of the home will reap a return on the investment when the home is put up for sale. But with the historic housing price declines of the past two years, remodelers find new reasons to convince potential clients that now is the time to spend money on interiors.

While upgrading a dated kitchen or bathroom will definitely give the space a fresh, current look, homeowners need to consider several factors before investing in a project, says A. Maris Bernard, adjunct instructor of Interior Design at The Art Institute of Ohio – Cincinnati.

For one thing, the topsy-turvy real estate market in many parts of the country has upset the traditional formulas for calculating the return that a kitchen or bath investment can bring, says Bernard, who has 30 years of interior design experience.

“A good designer is going to think through the process of determining the client’s needs and goals, and trying to accomplish that with the least amount of financial investment on the part of the owner,” Bernard says.

Five years ago, homeowners could count on an 80% return on a bath investment and a 60% return on a kitchen investment if they put the house on the market immediately following a remodel, Bernard says. During that same era, homeowners who upgraded and then waited three to five years before putting their house on the market could expect almost a 100% return on their investment, according to a cost value report published by Hanley Wood LLC in 2009.

Today, returns on home improvement investments have plunged with the general health of the housing market.

“There’s no guarantee you’ll get a return on this investment when you sell the house because the factors are so varied relative to market conditions,” Bernard says. “There are parts of the country where the home is already 25% below what it was two years ago.”

In addition to altering the return-on-investment math, the end of the housing bubble and troubles in the general economy have also contributed to changes in homeowners’ tastes and styles.

Homeowners are toning down the conspicuous consumption factor and going for natural finishes and simpler cabinet detailing in kitchens and baths, says Bernard, a member of the American Society of Interior Designers and an accredited professional of LEED (Leadership in Energy and Environmental Design).

“From a style standpoint, people are making decisions that are visually less dramatic,” Bernard says. “Maybe five years ago the idea of cherry cabinets with black accents was really cool. Not so much now.”

For San Diego-based kitchen and bath designer Jamie Goldberg, another important trend is the integration of entertainment and personal electronics in the kitchen. Examples include refrigerators that digitally display family photographs and children’s artwork, and TVs and computer stations in kitchen-adjacent areas.

Homeowners are also focusing on energy- and water-efficient lighting and appliances, says Goldberg, a member of the National Kitchen and Bath Association and a Certified Aging in Place Specialist, a designation program for professionals working with older and maturing adults to remodel their homes.

Goldberg recommends that homeowners consider how long they plan to stay in the house. People who plan to sell their homes soon, for example, may need to make cosmetic upgrades, while those who want to stay in their homes will remodel a kitchen or bath to meet their personal preferences, she says.

“People don’t remodel just for a return on investment,” Goldberg says, adding that most of her clients pursue remodeling projects on homes where they plan to stay. “People remodel for other reasons too: better functionality, better storage, better aesthetics, more comfort.”

Homeowners should enlist professionals for big jobs such as altering a kitchen’s layout, removing walls, installing stone countertops, and major electrical and ventilation changes, Goldberg says. When a home project involves permit issues, a professional also will work with the local building department to ensure a safe, code-compliant renovation.

Skilled do-it-yourselfers can tackle tasks like adding ceiling pot racks, rollout trays, and backsplash accessories, which offer a good return on investment for storage expansion, Goldberg says. Other DIY projects include changing light fixtures, faucets, floor tiles, backsplashes, and flooring, she says.

Carrie Cox, an Arlington, Va.-based interior designer and vice president of Hughes Design, points out that minor kitchen changes, such as new granite countertops, updated appliances, and a nice paint job provide the biggest return on investment. Because a complete kitchen or bath renovation is very expensive, a total redo actually brings a slightly lower return than minor improvements, she says.

“Even the smallest improvement is valuable as long as quality is evident,” Cox says. “The smallest change, such as adding attractive new cabinet hardware will be worthwhile.”

A minor renovation is best for a home in a neighborhood whose real estate value doesn’t support a costly overhaul, she says.

But for any homeowner considering a kitchen or bathroom upgrade, Cox suggests choosing materials and colors that will hold up over time and will be attractive to the next homeowner.

“Do not install the cheapest materials or select a color scheme that will leave potential buyers running for the door,” she says. “Consult a professional designer, architect, or reputable contractor for a second or third opinion before proceeding.”

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