Metros with the Highest and Lowest Remodel ROI
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
- Toledo, Ohio: 65.82%
- Detroit: 57.79%
- Springfield, Ill.: 57.23%
- Jackson, Mich.: 53.70%
- Cleveland, Ohio: 51%
- St. Louis: 44.75%
- Wilmington, Del.: 36.08%
- Lansing, Mich.: 35.46%
- Montgomery, Ala.: 35.38%
- 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:
- Glendale, Ariz.: 16.69%
- New Orleans: 16.78%
- Stockton, Calif.: 17.19%
- Orlando, Fla.: 17.37%
- Montpelier, Vt.: 17.70%
- Spokane, Wash.: 17.56%
- El Paso, Texas: 17.59%
- San Antonio, Texas: 17.63%
- Columbia, SC: 17.74%
- 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.
