How we calculate renovation cost & ROI

Last reviewed August 2026 · Version 2026.08 · Independent methodology

Return on Reno gives planning estimates, not appraisals. This page publishes exactly how each number on the site is built — the data basis, the formulas, every multiplier and exchange rate, the Reno Score weights, the expected uncertainty, and the limits — so an independent reader can reproduce any figure on the site and know how much weight to put on it.

The short version

Every cost figure is a single US national benchmark for that project, scaled by your chosen finish level, scope, and city, then shown in your currency at a fixed exchange rate. The resale-recovery percentage (“ROI”) is a US national Cost-vs-Value-style average and is not re-measured per city. That has one important consequence, stated plainly below: our per-city figures are a US-derived proxy adjusted for local cost levels, not independently sourced local market datasets.

Data basis — and its honest limits

The two starting numbers for each project — a national midrange cost benchmark (baseUSD) and a national midrange recouped-percentage (roi) — are compiled from published US national “Cost vs. Value”-style remodeling data and industry cost guides, cross-checked against contractor pricing ranges, for the 2026 cycle. The full set of base figures for all 45 projects is visible on each project's own cost page and in the site's open-source data file (app/lib/projects.js).

What that means project by project is below — every project marked against one of three honest categories rather than one blanket claim: a figure tied to a specific named report and (where public) a link to it; a figure modelled on a long-tracked industry-standard category without a specific edition verified line-by-line; or, where neither applies, plainly labelled as an editorial estimate rather than implying a citation that doesn't exist.

Regional figures are derived, not separately sourced. We do not hold an independent, locally-sourced cost and resale dataset for every city. Instead, each city applies a single cost multiplier to the US benchmark and converts to local currency at a fixed rate. The recouped percentage is carried over unchanged from the US benchmark. So a figure like “Auckland, 74% recouped” means “the US national recouped percentage, applied to an Auckland-adjusted cost” — not an observed New Zealand resale result. We are consolidating and rebuilding these city pages against verifiable local data; until then they are held out of search indexing and labelled as proxies.

Sources, project by project

36 of 45 projects cite a specific named report or article (linked where the source is public). 8 more are modelled on a long-tracked Cost vs. Value Report category without a specific edition verified line-by-line. The remaining 1 carry no single traceable published source and are labelled as editorial estimates below, rather than implying a citation that doesn't exist.

Modelled on a Cost vs. Value Report category (no specific edition verified line-by-line): Minor kitchen remodel, Major kitchen remodel, Bathroom remodel, Bathroom addition, Primary (master) suite addition, Wood deck addition, Composite deck addition, Vinyl window replacement.

Editorial estimate — compiled from general industry cost guides, no single traceable published report: Whole-home cosmetic refresh. These figures are reviewed periodically against the sources above and general market data, and will move into the documented category as we trace or commission verifiable sourcing for them.

The exact calculation (so you can reproduce it)

Every figure comes from four inputs and a few short formulas. Nothing is hidden or random. For a project with national benchmark baseUSD and national recouped-percentage roi:

cost (USD)   = baseUSD × finishMultiplier × scope × regionMultiplier
recouped %   = clamp(roi + finishRoiAdjust, 8, 160)
valueAdded   = cost × (recouped % ÷ 100)
netCost      = cost − valueAdded
displayed    = value × fxRate        (for your selected currency)

scope is the 0.5×–1.5× slider (default 1.0). clamp(x, 8, 160) keeps the recouped percentage between 8% and 160%. That is the entire cost/ROI engine.

Finish-level factors

The finish level scales the cost benchmark and shifts the recouped percentage by a fixed amount:

Higher finishes cost more but recoup a smaller share — buyers rarely pay a full premium for finishes beyond what's normal for the neighbourhood, which is the core mechanic behind overcapitalising.

Regional cost multipliers (complete table)

Each city applies this cost multiplier to the US national benchmark. It scales the cost only; the recouped percentage stays at the project's US benchmark. These are the exact multipliers used by the live calculator:

Fixed reference exchange rates

Figures are computed in USD, then displayed at a fixed reference exchange rate — we don't pull live FX, because day-to-day swings shouldn't move a planning estimate. These rates are reviewed periodically as part of each methodology version:

Worked example

A bathroom remodel (baseUSD 25,000, national recouped 74%) at a balanced/midrange finish, US national:

• cost = 25,000 × 1.0 × 1.0 × 1.00 = $25,000
• recouped = clamp(74 + 0, 8, 160) = 74%
• valueAdded = 25,000 × 0.74 = $18,500
• netCost = 25,000 − 18,500 = $6,500

For the same project in Sydney, multiply the cost by the Sydney multiplier (1.10) and display in AUD (× 1.52): 25,000 × 1.10 × 1.52 = A$41,800. The recouped percentage stays 74% — the US benchmark applied to a Sydney-adjusted cost, as explained above.

What “ROI” means here

On Return on Reno, ROI means the share of a project's cost that is typically reflected in a home's resale value — not a financial-investment return. A small number of projects (like garage door and entry door replacement) show ROI above 100%, meaning national data shows they often add more resale value than they cost. Most projects recoup less than their full cost, with the remainder buying you the use and enjoyment of the upgrade while you live there.

What “net cost” means

Net cost = estimated cost − estimated resale value added. It's the part of the spend you don't get back at sale, not a loss on the project as a whole. When resale value added exceeds cost, we show it as a net value gain instead.

The Reno Score (exact formula & weights)

The Reno Score is a 0–100 planning heuristic combining the recouped percentage, the finish tier's overcapitalisation risk, and the absolute cost. It is fully deterministic — the exact weights are:

roiPoints  = min(70, recouped% ÷ 140 × 70)          // up to 70 pts
tierPoints = { budget: 20, midrange: 15, upscale: 8, statement: 2 }
costPoints = max(0, 10 − min(10, costUSD ÷ 20000))  // up to 10 pts
score      = round( min(100, roiPoints + tierPoints + costPoints) )

Worked example (bathroom remodel, midrange, $25,000, 74% recouped): roiPoints = 74÷140×70 = 37, tierPoints = 15, costPoints = 10 − 1.25 = 8.75 → score 61/100. It's a comparison aid, not a valuation, appraisal, or guarantee of return.

Expected uncertainty

Treat every figure as a planning midpoint with a wide band around it. In practice:

• Cost: real quotes for the same project commonly land within about ±20–30% of the benchmark, and further out for structural work or older homes where hidden conditions surface.
• Recouped %: resale recovery varies by a similar margin with local buyer demand, timing and how the finish matches the neighbourhood — a benchmark can't capture your specific comparable sales.
• Regional figures: because these are a US-derived proxy scaled by a single multiplier, treat non-US numbers as indicative order-of-magnitude only until we rebuild them from local data.

Limitations

• Figures are national (or nationally-derived regional) averages — your specific street, buyer pool, and home condition can move the real number in either direction.
• We don't know your home's condition, exact square footage, or local comparable sales — a local agent does.
• Cost benchmarks assume licensed-contractor pricing, not DIY labour.
• Regional pages apply a cost multiplier and fixed FX to a US benchmark; they are not independently sourced local datasets.
• Market conditions (interest rates, local supply, buyer demand) shift resale recovery over time in ways a static benchmark can't capture in real time.

Update schedule & versioning

This methodology is versioned (currently 2026.08). Cost and ROI benchmarks, finish factors, regional multipliers and FX rates are reviewed as new “Cost vs. Value” data and regional cost guides are published — typically annually, with multipliers refreshed as we add or rebuild markets. The footer and each guide show the last reviewed date; material changes bump the version number here.

Why you should still get local quotes

Nothing here replaces 2–3 written quotes from licensed local contractors and a conversation with a local real-estate agent about what buyers in your specific market actually pay for. Return on Reno is built to help you walk into those conversations with realistic expectations — not to replace them.

Questions about a specific figure? Contact us. See also our about page and affiliate disclosure.