What Kind of Return on My Home Improvement Investment Can I Expect?

Are you thinking about remodeling your kitchen, basement or bathroom? You probably would like to see a nice return on that investment when you eventually sell your home. However, when it comes to payback value of home improvements, some are certainly more profitable than others. Generally, kitchen and bathroom remodels see the highest return on investment at around 90%. Basement remodels see something more like a return of about 50%.

There are many factors that determine how well a project will pay back. A lot of payback value is dependent on the current market conditions in the area. If homes are selling fast in a hot market, then you can expect a higher payback than you could in a slow market.What kind of return on my home improvement?

Additionally, the type of project you do and how it fits in with the rest of the neighborhood can influence your payback value too. The "wrong" kind of improvement for the area may see little to know payback where as a smart remodel can make you money. If the remodel or improvements are things that are in demand in your area and conform to the rest of the neighborhood then, you will see a high payback. For instance, if you add a second bathroom to a home in a neighborhood where two bathrooms are the norm, you will receive a high return on investment. However, if you add on to your house making it twice as big as the others in the neighborhood, it probably won't pay back like you're hoping.

Also factor in the cost of the improvements. Can you do the work yourself? If so, you'll save quite a bit of money and increase your chances of getting a good return on your investment.

Check out the following list of typical payback expectations for popular remodeling projects:

Kitchen remodeling – 90%

Adding a 

bathroom – 90%

Bathroom remodeling – 80%

Installing central heating – 90%

Installing central air – 75%

Adding a deck – 70%

Replacing windows – 70%

Adding a room – 55%

Building a pool – 45% (more common in Las Cruces)

Finishing a basement - 40%

Tina Droessler


Thank you to Tina Droessler for her contribution to our blog this month. Tina and her team serve the Palm Desert real estate market and assist buyers, sellers and investors in property sales and aquisitions. 



See also:

- Where is Las Cruces?

- Sellers Must See This