The Finance Algorithm

Renovation ROI Calculator

Compare a renovation's cost with the value and rent it adds, using your own before-and-after appraisals.

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$700k

An agent's or valuer's appraisal of the property as it is

$
$760k

An agent's or valuer's appraisal of the property once the work is done

Type of renovation you're planning

$
$40k

Total from your builder's or trades' quotes, including materials and any council fees

Are you renovating to sell, rent out or live in?

$

Leave at 0 unless the property is rented

$

Your property manager's estimate of the rent after the work

The button asks our AI to explain these figures in words.

Renovation ROI

ROI

50%

Adds more than it costs

Net gain

$20,000

after renovation cost

Value uplift

$60,000

from your appraisals

Spend vs value

5.7%

of the current value

Does the value after cover what you put in?

The renovation pays for itself when the value after is above the value now plus the cost.

$700,000Value now$740,000Value now + cost$760,000Value after

Renovation spend vs net gain

The coloured slice is the value added beyond the cost; none means the renovation costs more than it adds.

$760,000post-reno value
Renovation spend66.7%
Net gain33.3%
Adds more than it costs: $20,000
Your appraisals put the kitchen renovation at $60,000 of added value, for a $40,000 budget, 5.7% of the current value. That's a 50% return on the spend. Selling also costs agent's commission and marketing, which come out of the sale price.

How it works

A renovation pays for itself when the property is worth more afterwards than its value now plus what the work cost. There's no reliable public data on how much a kitchen, bathroom or extension adds - it depends on the street, the buyers and the finish - so this calculator works from your own figures: an appraisal of the property as it is, an appraisal of it once renovated, and your quotes. For a rental it also shows what the extra rent returns on the spend.

  1. 1Enter an agent's or valuer's appraisal of the property now.
  2. 2Enter their appraisal of it after the renovation.
  3. 3Enter the renovation budget from your quotes.
  4. 4For a rental, add the weekly rent now and the rent expected afterwards.
  5. 5See the value added, the net gain or loss and the return on the spend.

The figures today

The average new owner-occupier home loan was $842,000 in NSW and $664,000 in Victoria in the June quarter 2026, from the ABS. A two-bedroom unit on a new lease in NSW rents for a typical $785 a week.

House prices and loan sizesRents by postcode

Worked examples

Kitchen Renovation to Sell

An agent appraises the house at $700,000 as it is and $760,000 with a new kitchen. The quotes come to $40,000.

Current property value
$700,000
Value after renovation
$760,000
Renovation budget
$40,000
Renovation type
Kitchen renovation
Purpose
Sell (maximise sale price)

The kitchen adds $60,000 of value for $40,000, a $20,000 net gain and a 50% return on the spend. The budget is 5.7% of the current value. Agent's commission and marketing on the sale come out of that gain.

Bathroom in a Rental

A $550,000 unit rents for $520 a week. A $25,000 bathroom would lift the rent to $560 and the appraisal to $565,000.

Current property value
$550,000
Value after renovation
$565,000
Renovation budget
$25,000
Renovation type
Bathroom renovation
Purpose
Rent (maximise rental return)
Weekly rent now (rentals)
$520
Weekly rent after (rentals)
$560

The value rises by $15,000, $10,000 less than the cost. The extra $40 a week is $2,080 a year, 8.3% of the cost, so the higher rent repays it in about 12 years - before tax, and the work can also be claimed as capital works and plant and equipment.

Questions people ask

Which renovation adds the most value?
It depends on the property and the street. A renovation adds most where the home is clearly behind similar ones nearby, and least where it's already near the top of the street. Ask an agent to appraise the property as it is and as it would be after the work, and check both against recent sales.
What is over-capitalisation?
Over-capitalisation means spending more on improvements than they add to the property's value - for example, renovating a $500,000 house to a standard buyers only pay for in $1,000,000 homes. What similar renovated homes in the area sell for sets the ceiling.

The terms, in plain English

Over-Capitalisation
Spending more on property improvements than the increase in property value. Common when renovations exceed the suburb's price ceiling.
Renovation ROI
The value a renovation adds, less its cost, as a percentage of the cost.

Official sources

Depreciation Schedule Estimator

Claim depreciation on renovation costs for investment properties.

Granny Flat ROI Calculator

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Rental Yield Calculator

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