Which Popular Home Renovations Yield the Best Return?

Renovating your home is its own reward if you plan on staying put for the foreseeable future; after all, it's important to love where you live! However, if selling is anywhere on the horizon, you shouldn't invest any significant sum of money without first considering ROI (Return On Investment), or how much of the project's cost you will recoup upon resale. Many homeowners wrongly assume that the cost of a major improvement will yield a corresponding increase in sale price, but this is rarely the case! Keep reading to learn which popular home renovation projects are worth the investment and which are money pits waiting to happen!

For decades, Remodeling Magazine has gathered data on the ROI for the year's most popular home remodeling projects from across the nation and published it in their Cost vs. Value Report. For the 2018 edition, they examined the average cost and resale value added for 21 home projects, finding that all projects are most certainly not created equal.

Overall, the popular project which yielded the highest ROI was garage door replacement, which essentially paid for itself by recouping 98.3% of the project cost. Coming in a close second was installing manufactured stone veneer, which had an ROI of 97.1%. Third place was a new steel entry door at 91.3%. Notice a trend? Projects with high ROI tend to be those that occur in the front of the house, making them highly visible to home buyers and adding much-desired curb appeal. These renovations also fell in a more modest price range compared to the projects with the worst return.

Only two of the 21 most-popular home renovations yielded less than a 50% ROI: an upscale master suite addition (48.3%) and a backyard patio (47.6%). What do these projects have in common? First, each of these was expensive; in fact, adding a master suite was the most pricey entry on the list, costing over $250,000 on average. Second, neither project adds curb appeal, as they are either on the interior or back of the home. The third-worst ROI, an upscale major kitchen remodel, also had these characteristics, costing $125,000 on average while recouping only 53.5% of that upon resale.

Looking for more information? Check out the full list to view data broken down by region or even city; there are some major differences in ROI between different parts of the country!