When calculating after renovation value (ARV), assuming a 70% return on investment (ROI) is a common rule of thumb.
Calculate ARV of your home using this formula:
ARV = current estimated home value + (70% × cost of renovations)
While you can use the 70% rule as a starting point to decide whether to take on a renovation project, don’t rely on it too much. It’s not very precise and certain renovations have a greater ROI than others.
Ultimately, you’re still going to need a real estate agent to provide a more accurate home value estimate with a comparative market analysis.