Home renovations are great, but when it comes to Return on Investment (ROI), some will increase your home’s value while others won’t. Typically, most home renovations will turn out an average of 70 percent ROI. By improving the quality of life in your house, home renovations can also increase the house’s overall value in the future. 

The best ROI home improvements add functional space and square footage. Some examples include basement finishing, addition projects, major landscaping, and kitchen or bathroom remodeling. Luxury upgrades for aesthetically pleasing purposes are generally not ideal for adding value to a home. 

Home improvement ROI measures a project’s financial return or profitability based on the value or gain generated from a specific investment. Moreover, most home improvements will give a partial ROI.

How to Calculate Your Home Improvement ROI

The official way to calculate home value is through an appraisal. The next best option is to calculate it with a simple formula: 

Home improvement ROI = (Net Gain from Home Improvement ÷ Cost of Home Improvement) x 100 

Divide the difference between the cost and gain, then multiply that result by 100 to get the percentage. This formula gives an estimate only; actual results vary based on several factors, including real estate market, location, project type, and timing. 

Examples of Home Renovation Projects with a Great ROI 

  • HVAC Conversion/Electrification potential ROI: 103 percent
  • Garage Door Replacement potential ROI: 103 percent
  • House Siding with Stone Veneer replacement potential ROI: 102 percent
  • Entry (steel) Door replacement ROI: 101 percent
  • Vinyl Siding potential ROI: 95 percent 
  • Fiber-Cement Siding replacement potential ROI: 89 percent
  • Mid-range Basic Kitchen Remodel potential ROI: 86 percent
  • Vinyl Window replacement potential ROI: 69 percent 
  • Mid-range Bathroom Remodel potential ROI: 67 percent 
  • Wood Window replacement potential ROI: 61 percent 

Another thing to consider when determining home improvement projects based on ROI: short- and long-term value. Adding a functional space with extra square footage or upgrading appliances are valuable enhancements that can stand the test of time. On the other hand, surface-level updates will add only short-term value because they will likely be out of style in 20 years (think shag carpeting, white laminate cabinets, etc.) Consider if you’re likely to move soon, and remember how trends change before you make any major renovations.    

Ready to add value to your home? Call the pros at JFC Remodeling!


JFC Remodeling is committed to providing top-quality home reconstruction services to clients throughout Livingston County. With over 30 years of experience in the industry, our licensed contractors create unique, individualized, and polished renovations. Whether the site requires an improvement, repair, or is a new construction, you can trust our experts to deliver remarkable results. Call or email us to learn more.

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/