Modern homeowners prize space in their bathrooms but generally limit their focus to the master bath. Formerly, a bathroom was entirely functional, with a toilet, sink, and tub crowded into as little space as possible. If at all possible, increase the size by taking over some other room, such as part of a foyer in very old houses with large entries, or possibly splitting an adjacent bedroom into additional bath space and a walk-in closet and dressing room.
If there is no more space, create the illusion of size. Replace the standard sink/cabinet combination with a pedestal sink. Recess shelving into the spaces between wall studs. Think about replacing the tub with a shower enclosure. Provide plenty of lighting, and decorate in light, neutral colors. A wallpaper border at the ceiling will draw the eye upward, away from the clutter, and create the illusion of more space.
Many older homes are bargain purchases because they have only one bathroom. When I was growing up, all my friends lived in three bedroom, one-bathroom homes. Those homes are still out there, but they are highly undesirable. Adding a second bath can transform the marketability, and sales price, of a house. Rob space from the formal living room or possibly even the garage. My friend Tony converted a one-car garage into a spa, complete with soaking tub, steam shower, and lounge area, for under $5,000. The new owners were happy with a tiny room housing only a sink and toilet in the master bedroom area, because they had a luxury spa on the other side of the house.
Powder rooms are always popular. If the house does not have one, you can create one in space as small as sixteen square feet. Because powder rooms are used infrequently, and usually only by guests, homeowners do not feel the need for spaciousness there.
Aside from these structural considerations, you can update a bathroom in the same manner as a kitchen. Use laminate countertops and sheet vinyl flooring in modern colors and patterns. Hang a framed mirror rather than the typical sheet of mirrored glass. Spend a little extra on light fixtures, but avoid those that require specialty bulbs. You will soon forget about the $20 price tag on a standard light strip, when you must buy five globe light bulbs at $6 each. I also dislike anything that requires candelabra based bulbs. The bulbs are expensive, and it is virtually impossible to find them in the fluorescent, low-wattage versions if you want to save energy.
Replace the toilet seat and lid, not the entire toilet. You can remove lime and rust stains with a pumice stone, available near the nail polish in any drug store. Replace ugly old medicine cabinets with newer versions. Hang a small wall cabinet over the toilet. Make sure the bathroom fan does not rattle, and replace it if necessary. These small changes can have a significant impact on buyers.