home improvement contractor

Return on Your Investment – Do You Get Your Money Back When You Remodel?

If you’re expecting to move soon and you’re thinking about upgrades to make your home more appealing, return on investment (ROI) should be a key factor in what you choose to do. But even if you’re planning on staying put and you have a project in mind, it’s still a good idea to think about ROI.

Return on investment refers to how much of the cost of the project you will be able to recoup in the selling price. In other words, what is the average increase in selling prices for houses with a new roof? If your roof costs you $10,000 and your house sells for $10,000 more because of it, you have an ROI of 100%. Typically the ROI is below 100%. However, sometimes jobs with smaller price tags can have higher returns, simply because it makes the house that much more appealing at a lower cost.

The biggest ROI

Actually, the most important tasks you should take on if you’re planning on moving and which will bring you the greatest ROI are maintenance and repair. Your house won’t sell at a good price if the roof leaks, the air conditioning is unreliable, the plumbing is old, or the basement smells musty. Though many homebuyers can look at a house and dream of remodeling a less-than-perfect kitchen, buyers don’t want to have to plan to repair the basics when buying a new house. 

So think about what fundamentals need work before diving into remodeling projects. If you need help evaluating what the house might need, give us a call. We can discuss with you what home repair issues you may want to consider.

Remodeling projects with highest ROI

Actual return percentages seem to change from year to year and from region to region, but the remodels that bring in the highest ROI remain consistent. 

Exterior remodeling: “Curb appeal” has a major effect on housing price, and some of the improvements with the best ROI are actually exterior. A new garage door has an ROI at nearly 95%. It’s not expensive, but it dramatically improves the look of the house, especially if its color is particularly attractive. 

Replacing a portion of your siding with manufactured stone veneer has an ROI over 90%. Of course, your siding should be in good condition as well. New siding can bring an ROI around 70%. Window replacement greatly improves the look of the house and also has an ROI around 70%. New windows and siding could also help with your fuel bills between now and when you sell, so factor that into the cost benefits of this upgrade.

A new roof, especially here in the Philadelphia area, has an ROI over 95% and could also help control fuel cost by improving home insulation. So think about exterior upgrades if you’re thinking of selling your home and you want the best return. 

Kitchens: Depending on how much work your kitchen needs, a minor kitchen remodeling may have a higher ROI than a major job. If the bones of your kitchen are good, then replacing cabinet fronts, hardware, countertops, and appliances may give you an ROI around 75%. A complete remodel may only reap ROI in the 50% range, simply because it costs more. However, if your kitchen needs a complete remodeling, it may help your house sell faster, so don’t let the 50% deter you from making the changes your house needs.

Bathrooms: Older houses in our area often only have one bathroom; if yours is one of them, invest in a second bathroom. Many buyers will pass up a one-bathroom home or will expect a discount on the sale price in order to put the savings towards adding a bathroom themselves. And like the kitchen, if your existing bathrooms are in good repair – the plumbing is efficient and there’s no water damage ­­– then a minor remodel should bring you a bigger ROI than a complete tear-down and redo.

Adding space: Every 1,000 square feet added to the size of your house increases the sale price by 30-40%, so depending on the price of your home and the cost of remodeling, you could have a substantial return from an addition, a sunroom, or a finished basement. 

Some estimates of ROI for additions include 83% for a two-story addition; 81% for a bathroom addition; 78% for a family room addition; 73% for an added bedroom; 74% for expanding the master bedroom into a master suite. 

Outdoor relaxation areas also have a nice return, such as a deck, which has an estimated 75% ROI. 

Lower ROI projects: If you put in a pool, do it because you want it, not to increase ROI. There is no significant return for a pool, because many buyers see it as a maintenance problem rather than an asset. Add a home office if you need one, but it only has a 54% ROI, so adding a room that could have a different use for the next homeowner would probably be a better choice, even if you use it as an office. 

Getting help

At M&K Renovations, we’ve helped hundreds of homeowners prepare their houses for resale. Our experienced contractors and builders can take a look at your home and advise you on what steps you could take to increase the sale price while providing you with the best return on your investment.

But don’t wait until you’re thinking of selling. Make your upgrades now so you have time to enjoy them. Call us at (610) 890-9170 at our office on the Main Line to get you started. We’re family-owned and operated and serve the Philadelphia area.


Renovating the Philadelphia Area for Over 16 years