5 Home Renovations With the Worst Return on Investment

Man working on a home remodel
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Want to boost your home’s value? Grab your remodeling tool kit and head outside.

For three decades, exterior replacement projects have provided a bigger return on investment than interior discretionary remodels — and that trend remains in place, according to Zonda Media’s 36th annual Cost vs. Value report.

However, if you insist on remodeling your interior, at least have the good sense to avoid the following projects if boosting home value is your primary aim.

Zonda says the following remodels offer the worst return on investment of all home remodeling projects.

Primary suite addition (upscale)

Bedroom
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National average cost for this renovation: $325,504

Average cost recouped for this renovation: 22.7%

In the latest Cost vs. Value report, return on investment plunged for those completing remodeling projects.

Zonda says the overall cost-value ratio was just 34.8%, the lowest on record. Many projects offered a return on investment well below 50%, with the addition of an upscale primary suite having the worst return (22.7%) out of about two dozen projects included in the report.

Bathroom addition (upscale)

Spacious bathroom
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National average cost for this renovation: $104,733

Average cost recouped for this renovation: 26.6%

In a summary of the 2023 findings, Todd Tomalak — leader of Zonda’s building product research and advisory practice — notes that the survey was conducted in the fourth quarter of 2022, as real estate activity was bottoming:

“It was the darkest hour of 2022 and for real estate in a decade. But it provides an important perspective to capture. We learn what products maintain a premium to homebuyers when times are tough, and they can’t afford everything on their wishlist.”

Primary suite addition (midrange)

Attic bedroom
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National average cost for this renovation: $157,855

Average cost recouped for this renovation: 30%

How did Zonda arrive at its findings? The publisher surveyed more than 6,000 real estate agents, providing them with project specifications, cost estimates and photos and illustrations of each project.

Zonda then asked the agents a simple question: “What value does this project add to the sale price of a home?”

Bathroom addition (midrange)

Bathroom
Artazum / Shutterstock.com

National average cost for this renovation: $57,090

Average cost recouped for this renovation: 30.2%

As we noted, exterior projects typically offer a better return on investment than interior projects. Zonda says there is a simple explanation for why that is true:

“The reason for high returns on exterior projects stems from what real-estate professionals regularly witness from buyers: If their first impression is a run-down exterior, they tend to enter the property wary and reluctant to spend large on the property.”

Major kitchen remodel (upscale)

Women in a kitchen
SpeedKingz / Shutterstock.com

National average cost for this renovation: $154,483

Average cost recouped for this renovation: 31.7%

If you hope to get good bang for your buck on interior renovations, your best bet is either a minor kitchen remodel or a midrange bath remodel. The former offers an 86% return on investment and the latter can get you a 67% return.

Zonda says buyers are especially budget conscious today and want “workable kitchens and baths” that won’t require them to spend on a remodel.

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