Chapter 6: Will Your Remodel Pay Off? Understanding Your Investment

Making Your Remodel Investment Work for You

Throughout this guide, we've walked through the full landscape of remodeling costs—from understanding how different project types are priced, to planning your budget, financing your project, and timing your remodel effectively.

Now comes the natural question: Will your remodel actually pay off?

The Two Types of Return on Your Remodel

When evaluating whether a remodel makes sense, it's important to consider both types of returns you'll receive:

1. Quality of Life Returns (Immediate) The primary reason most homeowners remodel is to improve their daily living experience. Whether it's finally having a kitchen that works for your cooking style, a bathroom that feels like a spa retreat, or an addition that gives your growing family breathing room—these improvements pay dividends every single day you live in your home.

2. Financial Returns (Over Time) According to Remodeling Magazine's Cost vs. Value Report, most home remodels add 50%-80% of the project cost back into the value of the home upon completion. While you won't recoup 100% immediately, here's where it gets interesting: With an average appreciation rate of 7% per year, the total value of your home should increase enough to recoup the initial cost of the remodel in 1-2 years. After that, it takes another 3-6 years for the remodel itself to start making you money.

Explore our remodel investment case study

When Remodeling Makes the Most Financial Sense

Your remodel is most likely to be a solid investment when:

• You plan to stay put: The median length of homeownership is 13 years. The longer you stay, the more time your remodel has to appreciate. At 7% growth per year, a remodel you originally paid $200,000 for would be worth $580,000 after 20 years.
• You're preserving a low mortgage rate: Many homeowners refinanced or bought in the early 2020's when interest rates were very low. All the sudden, your starter home has become your forever home. If this is your situation, remodeling often makes a lot more financial sense than purchasing a new home. By using a home equity loan instead of selling and buying new, you keep your existing low rate on most of your mortgage.
• You focus on high-impact areas: Remodeling projects that have a direct impact on the user's lifestyle will also have highest return on investment. Kitchens, bathrooms, and additions that add functional square footage typically deliver the best returns.
  
  

Read: Is Remodeling a Good Investment?

A Real-World Example

To illustrate how this works in practice, let's look at a Portland basement remodel we did. The home was originally appraised at $616,000. The projected post-remodel appraisal was $782,000. That worked out to a recouped cost for the client of about $166,000 or 80% of the original investment.

The upfront costs of the remodel work came to $210,000. That cost minus the recouped return of $166,000 resulted in a true remodel cost of about $44,000. For that true cost, the homeowners gained a finished basement with additional living room, bathroom, and laundry room—spaces they'll enjoy every day while their investment continues to grow.

See the case study here: Will my remodel pay off?

Next Steps

As you move forward with your remodeling plans, here are three helpful resources:

Our Home Remodeling Cost Calculators
Get ballpark estimates for kitchen, bathroom, basement, addition, or whole-home remodels based on size and finish level. 

Our Project Portfolio
See how other Portland-area homeowners have transformed their spaces and learn about their investment returns. 

Investment Analysis Consultation
Schedule a free 30-minute consultation to get a personalized ROI analysis for your specific project. We'll help you understand both the lifestyle and financial benefits of your remodel. 

Remember, while the financial returns are important, the real value of a remodel often comes from the years of improved living you'll enjoy in your transformed space. When planned thoughtfully and executed well, a remodel can deliver both the home you've always wanted and a sound financial investment that grows over time.