Remodeling ROIs
Best Prospects for Contractors and Remodelers in 2023
It’s been a tough year for contractors and remodelers. Remodeling says that “average project values fell sharply to their lowest levers ever.”
The recently released?36th annual Cost vs. Value (CVV) report from Zonda Media and reported in Remodeling reveals the specific projects that deliver the best return on investment (ROI).
The report shows that for the past 30 years, “Exterior replacement projects typically provide a higher ROI than interior discretionary remodels at the time of house sale.”
However, this year, there are two exceptions: a minor kitchen remodel and a midrange bath remodel. Remodeling reports, “The average seller can expect an 86% return on a light touch to the kitchen, and 67% on a modest bathroom reno.”
Remodeling explains, “Buyers are hyper-focused on hanging onto extra cash right now. They want workable kitchens and baths and don’t necessarily want to take on a remodel before they move in.”
If you’re in the home contracting or remodeling business, it says that remodelers use the CVV report to open a discussion about the budget for proposed projects. Prospective clients are reassured knowing how much money a project will return when they’re ready to sell their property.
And, Remodeling adds, “Once the investment has been established, remodelers say they have an easier time talking about other values a proposed project might have for clients.”
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According to the CVV, HVAC conversion projects are very popular this year. This means replacing an oil or gas furnace with an electric heat pump appropriate for the climate zone. This is part of a growing trend toward home electrification, and the ROI of this project is an “exceptionally high” 104%.
Other projects that bring a high ROI that you may want to discuss with potential clients include:
·??????Garage door replacement—103%
·??????Manufactured stone veneer—102%
·??????Entry door replacement—101%
·??????Siding replacement (vinyl)—95%
Check out the Remodeling post to learn more about the ROIs of projects.
Remodeling says the report’s “most noticeable trend has been the plunge in the overall ROI numbers. While the projects with the highest returns have edged over 100%, those at the lower end of the ROI range have dropped well below 50%, with the overall cost–value ratio down to 34.8%, the lowest in the history of the report.”