Market Conditions

Metros with the Highest and Lowest Remodel ROI

June 17, 2024
4 min read

High interest rates and low housing inventory make purchasing a new home challenging today—especially a move-in ready home—but it means it’s prime time for remodeling fixer-uppers. But the return on investment for remodeling a fixer-upper depends greatly on location, according to a recent report.

Frontdoor, a home improvement resource for homeowners, published a recent report identifying the best—and worst—locations where buying new and remodeling has its highest ROI. The company compiled its list by analyzing fixer-upper listings on Zillow for 130 of the country’s most populous cities and utilizing the AI-powered prop-tech home data platform Kukun to identify project costs.

 

The Worst Cities to Remodel a Fixer-Upper

High-ranking locations for ROI tend to be those closer to water, especially on the West Coast, found Frontdoor. On the flip side, the locations with the worst ROI on renovating a fixer-upper were midwestern and eastern cities.

Billings, Mont. topped the chart for the lowest return on investment at 10.98% ROI. Then came Lexington, Ken. at 11.22% ROI; Newark, NJ with 11.42% ROI; Indianapolis with 11.74% ROI; Kansas City, Miss. with 11.77% ROI; Boston with 11.8%; Chicago with 11.81%; Lincoln, Neb. at 11.82%; Bismarck, ND at 11.84%; and Augusta, Maine with 11.88%.

Although the Midwest saw low ROI percentages, the report found the region remains a hot spot for flipping because of the high markups on remodeled fixer-upper homes.

For example, Toledo, Ohio came in with the highest increases in property value for remodeled fixer-upper homes at 65.82% higher. The following top increases for home values were seen in Illinois, Michigan, and Missouri.

 

Top 10 Cities Where Remodeling Fixer-Uppers Increases Home Values Most

  1. Toledo, Ohio: 65.82%
  2. Detroit: 57.79%
  3. Springfield, Ill.: 57.23%
  4. Jackson, Mich.: 53.70%
  5. Cleveland, Ohio: 51%
  6. St. Louis: 44.75%
  7. Wilmington, Del.: 36.08%
  8. Lansing, Mich.: 35.46%
  9. Montgomery, Ala.: 35.38%
  10. Topeka, Kan.: 35.18%

 

The Best Cities for Remodeling a Fixer-Upper Home

The most profitable cities to purchase a fixer-upper home and remodel are heavily on the coasts.

Miami tops the list of the highest return on investment percentages at 17.67%. Charleston, NC follows at 17.38%, then Los Angeles with 17.19%. According to Frontdoor, the average cost for a remodeling project in Los Angeles is $79,610.

After Los Angeles comes Long Beach, Calif. with a 16.95% increase in property values, then San Jose, Calif. With a 16.91% increase, and Anaheim, Calif with a 16.88% increase in property values after remodels. The list rounds out with Santa Ana, Calif. At 16.81%, Scottsdale, Ariz. at 16.63%, San Francisco at 16.60%, and finally, St. Petersburg, Fla. at 16.37%.

The cities where remodeling a fixer-upper increases home values the least are a mix of coastal and eastern cities:

  1. Glendale, Ariz.: 16.69%
  2. New Orleans: 16.78%
  3. Stockton, Calif.: 17.19%
  4. Orlando, Fla.: 17.37%
  5. Montpelier, Vt.: 17.70%
  6. Spokane, Wash.: 17.56%
  7. El Paso, Texas: 17.59%
  8. San Antonio, Texas: 17.63%
  9. Columbia, SC: 17.74%
  10. Huntsville, Ala.: 17.76%

 

The Highest ROI for Small Remodeling Projects

Many home improvement projects increase the value of a home without pricey choices like new electrical and moving of walls. Frontdoor found the project with the most ROI ($7,510 increase, to be exact) is new installing semi-custom cabinets with mid-end materials or premier refacing of existing cabinets, coming in at a 3.63% increase in value.

The second type of project that offers the highest ROI is replacing mid-market branded kitchen appliances with high-end options, which increases home value by 2.35%, a $4,922 increase in value. The third top-earner project is counters, specifically installing granite, quartz, marble, or porcelain.

First-time homebuyers can find fixer-upper listings priced between 5 to 10% lower than move-in ready homes. The high return on investment of these projects shows that remodeling remains a strong option to navigate the current housing market.

 

About the Author

Caroline Broderick

Managing Editor

Caroline Broderick is the Managing Editor for Pro Remodeler. Most recently, she served as the associate editor for PR's sister publications, Pro Builder, Custom Builder, and PRODUCTS where she covered design, building products, trends, and more in the residential construction industry. She can be reached at [email protected].
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