Return on investment
A general measure of what you got back compared to what you put in. Used loosely for a lot of things in real estate. More specific metrics like cap rate and cash-on-cash are usually more useful.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
ROI is the loose word for what you got back against what you put in, and sellers use it about pre-listing work. A $6,000 refresh that adds $15,000 at sale has an ROI most improvements never reach.
Part 2 of 4
A simple example
You spend $6,000 on paint, fixtures and landscaping, and the home sells for about $15,000 more than the comps for un-refreshed homes.
| The spend | A typical return at sale |
|---|---|
| Paint, fixtures, curb appeal | More than it cost |
| A new kitchen right before selling | Often less than it cost |
| A new roof the inspection would have flagged | About break-even, and a smoother sale |
ROI on pre-listing work is highest on the cheap, visible things.
Part 3 of 4
What people get wrong
That the cost of a renovation comes back at sale. Most return a fraction; the exceptions are small and cosmetic.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
One piece of your sale. Here is where all the pieces live.
In your room, this word explains itself where it appears.
Keighbor keeps your whole home sale in one place and defines every term like this one right where you meet it, in the step you're on. Free to set up, with or without an agent.