Comparing Different Home Remodeling Projects by ROI

February 24, 2021
Last updated:
April 5, 2022
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When looking into home remodeling projects, it behooves the homeowner to place a priority on those renovations that will most positively affect resale value. And with the country in the midst of a DIY and home improvement revolution, there is no shortage of information available on remodeling ideas and their purported ROIs.

To this effect, it should be noted that while there are some projects that are highly valuable, you are unlikely to find renovations that consistently yield a 100% ROI or greater. If this were the case, homeowners should theoretically be in non-stop renovation mode to capture these gains in value.

Therefore, despite some companies attempting to sell their services by dangling 2X ROI for hiring them to perform a project, most trusted sources will show that the majority of home remodeling projects will offer an ROI between 50-80%.

While this may not seem like a lot, remember that renovations also offer many intangible benefits on top of increased resale value, such as safety, livability, and comfort, making most remodeling projects well worth the while. Let’s take a look at some of the most common home remodeling projects and what you can realistically expect to enjoy in terms of ROI.

Kitchen Remodels

When it comes to remodeling projects, the kitchen is the area that gets most homeowners’ wheels spinning. And with good reason: innovative building materials and modern design sensibilities have transformed the kitchen from a stuffy, utilitarian space into an open and inviting hub sure to rival the most trendy cafés in the city.

However, not all kitchen remodels are created equal when it comes to ROI. In fact, statistics suggest that modest kitchen remodels are more valuable than lavish projects. In their recent study on home remodeling cost vs. value, Remodeling Magazine found that minor kitchen remodels yielded a 77.6% ROI, while a major upscale remodel came in at only 53.9%.

Essentially, it is possible to create too much kitchen. When the cost of the kitchen renovation comprises a significant portion of the home’s total value, the returns on the project are likely to be smaller. Therefore, instead of attempting to completely recreate and expand the space, stick with simple projects such as updating the countertops, adding more energy-efficient appliances, and replacing dated cabinets.

Bathroom Remodels

After the kitchen, the bathroom is arguably the next most exciting home renovation to perform, as homeowners fantasize about the possibilities of an in-home spa. Just as with the kitchen, Remodeling Magazine discovered that it is better to choose a midrange (64.0% ROI) than an upscale (56.6%) project.

When looking at midrange renovation ideas that can help increase home value, suggests the following projects:

  • Installing new countertops, sinks, faucets, and fixtures for the vanity
  • Replacing damaged or outdated floors with cleaner, nonporous products, like hardwood, ceramic tile, or vinyl flooring
  • Removing a clunky tub/shower combination and upgrading to a larger walk-in shower

While most statistics suggest that adding an upscale or lavish master bathroom will yield a lower ROI than a modest remodeling project, Condo Pundit posts that adding a small ½ bath on the main floor can have an ROI in excess of 80% against a cost of $10,000 or less, thanks to the increased functionality when hosting guests.

Bedroom Remodels

When looking into the least valuable projects in terms of ROI, bedrooms are at the top of the list. Most bedroom renovations, specifically those performed on the master suite, are viewed more as a luxury than a necessity, with features such as walk-in closets, additional lounging space, and bathrooms with Whirlpool tubs unlikely to be appealing to all buyers. As a result, homeowners can expect to see a modest 58.5% ROI against an investment that will likely run well over $100,000.

Even adding more bedrooms is not overly valuable, with various sources finding the ROI for bedroom additions to be between 50-60%. When making bedroom additions, homeowners need to be particularly careful about eating into functional space elsewhere, such as through a smaller living room or elimination of a home office area.

owever, one way to ensure that a bedroom addition is a valuable project is by converting unused space in the attic or unfinished basement into an extra bedroom, with FortuneBuilders estimating that converting an attic into a loft-style bedroom will yield an ROI in excess of 90%.

Flooring Replacement

The expected ROI on floor replacements can be all over the place. However, the gold standard for home floors is hardwood, with buyers more likely to prefer homes with hardwood floors over any other type of flooring material. Whether solid or engineered hardwood, ProBuilder reports that homeowners can expect to recoup 80% of installation costs when upgrading to new hardwood floors.

The ROI for other flooring materials will be much more modest. Products such as marble, porcelain, and ceramic tile can provide ROI over 50%, but the cost of such options can be very high, with reporting figures in excess of $30 per square foot to make these installations.

Carpet and laminate are highly affordable flooring materials but are not going to add any value to your home. The same can be said for vinyl, but it should be noted that many contemporary vinyl products are becoming popular for their ease of installation and low maintenance qualities, making vinyl an attractive option for homeowners interested in DIY repairs and energy efficiency.

Roof Replacement

A roof replacement is not the most luxurious renovation, but it can actually be quite valuable in terms of ROI, as a quality roof will do wonders for a home’s curb appeal and insulation. As such, Remodeling Magazine finds that a basic asphalt roof replacement will provide an ROI of 65.9% against a national average cost of $24,700.

Upgraded roofing products, such as clay or metal tiles, will be more expensive to install (likely to be close to $40,000) but will still provide an ROI of over 60% while also coming with a longer useful life than asphalt.

One important note on roofing is that the ROI can vary based on region. Metal is more valuable in areas that are hit with heavy snowfall, while ceramics are preferred in hot locations thanks to a higher thermal mass that will not readily transfer ambient heat into the home’s interior.

Window and Door Replacement

In terms of affordable projects that will give a strong ROI, window and door replacements are the way to go. New windows and doors will help improve the home’s appearance and make the building more airtight.

New windows are a highly desirable feature in homes that are looking to improve energy efficiency, as the free flow of natural sunlight helps reduce the home’s reliance on electricity. Even the most lavish window upgrades will come in at around $20,000 or less, with an expected ROI of around 90%, as reported by FortuneBuilder.

Door replacements are even more affordable, with a steel entry door project expected to cost around $2,000, with an ROI of 70% or higher likely to be achieved.

Exterior Renovations

Exterior remodeling projects are sometimes overlooked in the grand scheme of home renovation, but they can be surprisingly simple and highly valuable. Many landscaping projects can be performed by the homeowner and yield an ROI close to 100%. Furthermore, as the COVID-19 pandemic has increased the incidence of people spending their leisure time at home, outdoor structures such as decks, patios, and porches are attractive features, with expected returns of close to 90%.

Finally, do not forget about the garage. A dented, dated, and unattractive garage door can be severely limiting your home’s curb appeal, with many sources listing a garage door replacement as a project that can be accomplished for less than $5,000 while providing an ROI of close to 100%.

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There is no shortage of home renovation ideas that can add value to your home this year. By carefully weighing the expected ROI of the aforementioned projects, you can effectively take steps to make your home as valuable as possible come resale time.

Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

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