Answer: Most of the time, yes, but how much?  It depends.  

Typically, when we are asked this question, the person asking wants to understand what kind of return they might see for the project they’re considering.  The rate of return can vary widely from project to project, based on many factors.

For those who are satisfied with a generic “rule of thumb” type overview, there are plenty of articles published every year in home magazines or blogs that can provide average rates of return.  For an example, see: this report

Some of these articles even break down different common project types by region of the country.  These overviews are not a bad starting point, but they are generic and they are averages.

For a more specific answer about possible return on investment, here’s how we look at it.

  • First, we consider the property and it’s surrounding area.  Is the subject property just like every other one in the area, or is it completely unique and different?  In a neighborhood where every home is identical, a remodel done really well could make the house stand out and improve it’s value.  Conversely, a remodel that makes the subject property into the most expensive house on the block typically isn’t going to provide a very high rate of return at sale time.
  • Second, we look at what the proposed remodel project does for the house.  In most homes, there are one or two things about the property that limit it’s value.  Maybe it’s the square footage or number of bedrooms.  Maybe it’s a cramped kitchen, or poor layout that wastes space or restricts access to the yard.  Could be any number of things, but there are generally one or two key attributes that would need to be changed in order to maximize the value of the home.  So, if the proposed remodel project addresses (and fixes) at least one of those key items, then the return can be very good…in some cases even exceeding the cost of the project.  If however, the remodel ignores the limiting attributes and invests in other areas, then it’s likely that the return will be much lower.
  • Third, we evaluate what the proposed remodel consists of.  Kitchens and baths tend to have relatively higher return on investment, for the simple reason that every home has one, and these are high-use spaces in the home.  Adding a bonus room, or building out a home office will suit the needs of fewer buyers, and thus typically provide a lower return (compared to a kitchen).
  • Fourth, we consider style.  This includes remodeling in a style that is complementary to the existing architecture, as well as remodeling in a style that’s current and popular, not outdated or too impractical to suit a new buyer’s tastes.

While the factors listed above are important to consider, each situation is unique and nobody has a crystal ball to predict the future.  A little research and consideration, though, can get you closer to understanding what kind of return to expect from your project.