Many homeowners decide to renovate their homes to improve the aesthetics of the home for their own wants, but some homeowners decide to renovate their home to improve the home's value for a potential sale. With huge differences in cost and wants for homebuyers, the cost to home value increase ratio significantly differs depending on the location. The below data averages all types of home improvements for residential homes in each state.

Highest Returns on Investment (ROI)

Hawaii (89.3 cents per $1): Homeowners in Hawaii receive the highest return for every dollar spent on renovations, nearing a full recovery of their investment.

California (83.1 cents per $1): The Golden State follows closely behind, with 83 cents gained for every $1 spent on home improvements.

Lowest Return

Maine (62.3 cents per $1): Maine is on average one of the worst states to do renovations with the lowest return of investment in the US.

What This Means for Homeowners

If you're considering home renovations, it's important to take into account the expected return on investment. In states with higher returns, like Hawaii, California, or Colorado, you can expect to recover a significant portion of your costs when you sell your home. In contrast, if you're in states with lower ROI, you may need to be more strategic about which renovations you pursue, focusing on high-impact areas like kitchens and bathrooms to maximize value if you are doing the renovation to increase your homes sale price.

What This Means for Contractors

Tailor Your Services to the Market:

Contractors operating in states like Hawaii and California should emphasize the high return on investment in their marketing material. As the investment for homeowners is a lot more logical when you can phrase it as a math equation.

In states with lower ROI, like Maine, contractors should focus their marketing message on functionality and aesthetic appeal instead of approaching it from a ROI perspective.

Don't Just Be A Contractor, Be An Advisor

Position yourself as a knowledgeable consultant who can help clients make informed decisions. When starting a new job, ask your client why they want to do the renovation. If their reasons are personal or aesthetic then carry on, but if they are wanting to do the renovation for home value purposes ensure you have a serious conversation with them about how the renovation will impact their homes value.

Conclusion

Renovating a home is a big decision for homeowners, and whether the goal is personal enjoyment or increasing the home's value for sale, the return on investment varies significantly by state. For contractors, this presents a unique opportunity to not only provide renovation services but also to serve as trusted advisors. By understanding the local market trends and how different renovations impact home value in specific regions, contractors can tailor their services to maximize ROI for clients in high-return states or focus on aesthetic and functional improvements in states where ROI is lower. Ultimately, knowing when to focus on numbers and when to emphasize design and function will help both homeowners and contractors get the most out of each renovation project.

Need help managing your renovation projects? Property Vue is a contractor tool purpose built to make your renovations easier.