Many homeowners, investors, and property developers choose to remodel homes in order to increase value. Potential profitability depends largely on the ratio of value increase to the amount the developer spends on the renovation.
According to statistics released by Remodeling Magazine, the highest ratio of value to spending comes from a new front door, which can increase the home's value by 96.6 percent of the cost of the door, assuming the door increases the home's curb appeal. Replacing smaller elements, such as siding and windows, also can provide a high payout for a relatively low cost.
Kitchen remodels have high average rates of return, if the amount spent on the remodel is minor. The same holds for bathrooms, as these are the two rooms buyers focus on most intensely when making purchase decisions.
Buyers also pay attention to whether the roof, furnace, and other functional elements are reliable. For example, a buyer to may find it unlikely to justify spending extra on new kitchen appliances if the basement leaks.
