What is a good ROI for a home renovation?

An ROI score above 80% means you'll recover the substantial majority of what you spent at resale, which is generally considered a strong return for a home improvement project. Scores above 100%, like garage door replacement, mean the project typically recoups more than it costs. Scores below 50% suggest the project is primarily about quality of life rather than financial return.

How accurate are home improvement ROI estimates?

The estimates are based on the annual Cost vs. Value report by Remodeling Magazine, which surveys real estate professionals and appraisers across 100+ U.S. markets. They're reliable averages, not guarantees. Individual outcomes vary based on contractor quality, material choices, market timing, and how recently the work was done relative to the sale date.

Does location affect home improvement ROI?

Significantly. Labor costs track with local home values, so the same project can show different ROI percentages in different markets. In high-value markets, expensive projects stay within reach of what buyers expect and pay for. In lower-cost markets, the same dollar investment can push past the neighborhood price ceiling, compressing or eliminating the return.

What Is a Remodeling ROI Score, and How Is Yours Calculated?

Every estimate on RemodelFinder includes an ROI Score, a number that tells you how much of your remodeling investment you can expect to recover when you sell your home. It’s a useful planning tool, but only if you understand what it actually measures.

How Is Remodeling ROI Calculated?

The formula is straightforward:

ROI = (resale value added ÷ project cost) × 100

A score of 75 means for every $10,000 you spend, you’re expected to recover $7,500 at resale. A score above 100 (which happens with garage door replacement) means the project typically recoups more than it costs.

Where Does the Data Come From?

The foundation of every RemodelFinder estimate is the annual Cost vs. Value report published by Remodeling Magazine. This report surveys real estate professionals and appraisers across the country every year, asking a consistent question: if this specific project were completed today at mid-range quality, how much would it add to a home’s resale value?

The report covers over 150 project types across 100+ U.S. markets. It’s the industry standard for resale value data, used by appraisers, real estate agents, and financial planners.

But the Cost vs. Value report produces regional averages, not ZIP-code-level numbers. To localize estimates, RemodelFinder applies a market multiplier based on each ZIP code’s median home value, sourced from Zillow Research.

The logic makes sense. Labor costs and material demand correlate with local home values. A kitchen contractor in a market where homes average $600k charges more than one in a market averaging $180k, because demand is higher, overhead is higher, and buyers in that market have higher quality expectations.

How the ZIP-Code Multiplier Works

For each ZIP code, we calculate:

Local multiplier = ZIP median home value ÷ state median home value

A ZIP code with a median home value of $480,000 in a state with a $240,000 median gets a multiplier of 2.0. Both the project cost estimate and the resale value are adjusted by this multiplier.

That’s why the same project can show meaningfully different costs and ROI scores across ZIP codes, even in neighboring towns.

What ROI Scores Don’t Tell You

ROI scores are useful for comparing projects, but they have real limitations worth knowing before you make decisions based on them.

They’re averages, not guarantees. Individual outcomes depend on contractor quality, material choices, local market conditions at the time of sale, and how recently the underlying data was collected.

They don’t capture quality-of-life value. If a bathroom remodel makes your home significantly more enjoyable while you’re still living there, that’s real value. It just doesn’t show up in a resale number.

They assume mid-range quality. The Cost vs. Value methodology benchmarks projects at standard quality with mid-grade materials. High-end finishes improve livability but rarely improve ROI proportionally.

They don’t account for timing. A kitchen remodel done 10 years before you sell is a different calculation than one done 6 months before listing. The resale value contribution decays over time.

How to Use Your Score

Think of it as a decision filter, not a guarantee. An ROI score above 80 in your market means the project is financially defensible. You’ll recover the substantial majority of what you spent. A score below 50 suggests the project is more about quality of life than financial return, and that’s a valid reason to do it. Just go in knowing that’s what you’re buying.

The score becomes most useful when you’re comparing projects side by side. If you’re choosing between a kitchen remodel (ROI: 78) and a new deck (ROI: 51) in your specific market, the data tells a clear story about which investment holds up better at resale.

See ROI scores for all ten projects in your ZIP code →