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Visualizing ROI of Interior and Exterior Home Improvement Projects in 2021

Written by Cristina Miguelez

Published on May 20, 2021


Visualizing ROI of Interior and Exterior Home Improvement Projects in 2021

This article visualizes the best home improvement ROI in 2021. We look at interior and exterior projects that most increase the value of a home.

To provide you with the most accurate and up-to-date information, we consult a number of sources when producing each article, including licensed contractors and industry experts.

Read about our editorial process here. Want to use our cost data? Click here.

As the home improvement market size surpassed nearly $763 billion in 2020, any concerns that lingering post-recession fears or newly introduced pandemic problems would keep the market stagnant went unfounded. In fact, it is surmised that more time spent at one's home during 2020 translated into more time for home improvements as approximately 68% of homeowners have carried out more projects than before the pandemic.

We have gathered and analyzed the data from Remodeling's 2021 Cost vs. Value Report to help determine which projects may be best for your home. The analysis details the most popular remodeling projects and can help pinpoint which projects will give the most bang for your buck.

What is Cost vs. Value?

With so many homeowners considering new projects, it is important to evaluate the cost vs. value in each case. Cost is fairly simple to define, it is the amount of money necessary to complete the project. Value, on the other hand, is a bit trickier. Value is the amount of money you can expect to recoup when you sell your home. Value varies widely depending on the project, it changes over time based on trends, and geographical location plays an important part too.

Interior Home Renovations: Cost and ROI

The infographic above depicts the cost and average ROI of interior projects. The most expensive project, an upscale master suite addition, costs nearly $321K; however, its resale value is just shy of $153K, garnering only a 48% return on investment (ROI). This is also the lowest ROI of all interior projects. The highest ROI for interior projects is for the midrange minor kitchen remodel. The cost is a bit more budget friendly at $26,214 and the amount recouped comes in at 72%, putting it in the top 3 (of all projects) and the only interior project to be in the top 12 of all 22 projects.

Exterior Home Renovation: Cost and ROI

When it comes to exterior projects, as seen in the visualization, aside from the highest cost project, metal roofing replacement ($46,031 with 56% ROI), each exterior project has an ROI above 60%. A garage door replacement, nearly the lowest cost ($3,907) has an astonishing ROI of 94%! This is the highest ROI of all projects included in the data meaning that if recouping the costs of a home improvement project is what you're after, this is definitely the best option for you. Coming in close behind with a 92% recoup value is manufactured stone veneer.

Notable Insights

What are the best ROI home improvements?

It is interesting to note the clear delineation between interior and exterior projects and their ROIs in 2021. The exterior projects, those that are seen first and create a strong impression on buyers, have a much better return.

Out of these 22 projects presented in the report, the top half with highest ROIs contain 10 exterior projects and one single interior project. The exact opposite occurs with the lowest 11 ROIs which contain 10 interior projects and only one exterior project.

This is certainly a factor to consider when deciding on which project(s) you want to schedule!

Changes Over the Past Year

It is important to highlight that between 2020 and 2021 there was only one project which increased its ROI. The fiberglass grand entrance project ($10,044) had a significant uptick of 14% from an ROI of 53.3% to 60.9%. The most recent NAR Trends determined that 97% of homebuyers use the internet to search for homes leading to walk throughs and exterior viewing of homes. A grand entrance is sure to make a grand impression when it comes to creating a pleasant drive by experience.

An upscale major kitchen remodel remained static YoY at 53.9% ROI; however, the rest of the projects reviewed slipped between 1% and 11%. Fiber-cement siding projects took the hardest hit of all the projects.

While many factors play into both the cost and value of a project, the past year has seen significant issues in building material shortages as detailed by the NAHB. As supply decreases, cost increases; however, that doesn't always correlate into a value increase. This could be a factor in the overall decrease in project ROIs from 2020 to 2021.

Spending more does not result in bigger ROI

Logical thought leads most to believe that the more expensive a project, the higher the value. Unfortunately, higher costs are often harder to recuperate than lower ones. The visualizations here can help simplify this concept.

The most expensive four projects ring in at over $100K each with an average ROI of 52.3% (range 47.7% to 53.95); whereas, the four lowest cost projects are all under $11K and have an average ROI of 77.9%. Two of those projects, manufactured stone veneer and garage door replacements, maintain ROIs greater than 90%!

Projects with Worst ROI Cost Recouped Value
Master Suite Addition (Upscale) $152,996 47.70%
Bathroom Addition (Upscale) $54,701 52.80%
Bathroom Addition (Midrange) $30,237 53.10%
Major Kitchen Remodel (Upscale) $80,284 53.90%

Opting to tackle several lower costs projects instead of a single high cost project may actually benefit in the long-run with a much higher ROI average overall.

Projects with Best ROI Cost Recouped Value
Garage Door Replacement $3,907 93.80%
Manufactured Stone Veneer $10,386 92.10%
Minor Kitchen Remodel (Midrange) $26,214 72.20%
Siding Replacement (Fiber-Cement) $19,626 69.40%

The Benefits of Analyzing Cost vs Value

The data analysis presented here is useful to anyone in the housing market, but it is especially advantageous for those homeowners selecting projects. It is always important to consider ROI when selecting a project and selling is on your mind. Being able to confidently discern the value of high ROI exterior projects against lower value ROI interior projects, as well as recognizing that lower cost projects have a better chance of recuperating costs than higher ones, is key to picking the best project for the best return. It's also useful to acknowledge how much return you are likely to get on a major project. This information can help determine whether or not a project will come in under budget in the long term.