📖 Overview
This calculator helps you judge whether renovation spending is financially rational.
It blends recurring gains and resale impact with risk discounting so the project case is tested under realistic uncertainty.
🧪 Example Scenarios
Use these default and higher-pressure example inputs to explore how sensitive this calculator is before using your real numbers.
| Input | Base Case | Higher Pressure Case |
|---|---|---|
| Renovation Cost ($) | 38,000 | 45,600 |
| Estimated Monthly Value Gain ($) | 260 | 299 |
| Expected Resale Uplift ($) | 18,000 | 20,700 |
| Years Until Sale | 5 | 5.75 |
| Risk Discount (%) | 20 | 24 |
⚙️ How It Works
Blends monthly operating gains with expected resale uplift under risk discount to estimate payback speed and horizon ROI.
The Formula
Horizon Benefit = (Monthly Gain × Years × 12 + Resale Uplift) × (1 − Risk Discount)
| Renovation Cost | All-in project cost including contingency |
| Monthly Gain | Estimated recurring monthly benefit from renovation |
| Resale Uplift | Expected value increase at sale/refinance event |
| Years Until Sale | Holding horizon before realizing resale effect |
| Risk Discount | Reduction for uncertainty in realized gains/uplift |
💡Projects with weak monthly gain may still be justified if resale uplift is strong, but only if exit horizon is realistic and market assumptions are conservative.
Quick Reference
| Project Cost | Adj. Monthly Gain | Adj. Resale Uplift | 5y Net Outcome |
|---|---|---|---|
| $25,000 | $220/mo | $12,000 | +$200 |
| $40,000 | $280/mo | $20,000 | -$3,200 |
| $55,000 | $420/mo | $25,000 | -$4,800 |
When To Use This
- Use this tool when you need a fast decision during active planning or execution.
- Use this before committing money, time, or tradeoffs that are hard to reverse.
- Use this to compare options using the same assumptions across scenarios.
Edge Cases To Watch
- Results can be misleading if key inputs are missing, stale, or unrealistic.
- Very small or very large values may amplify rounding effects and interpretation risk.
- If assumptions change mid-decision, recalculate before acting.
Practical Tips
💡 Use conservative uplift estimates from recent local comparable sales.
💡 Apply risk discount aggressively for volatile markets.
💡 Compare renovation ROI to alternative uses of capital.
Frequently Asked Questions
❓ Does this replace full appraisal?
No, it is a decision-support estimate and should be paired with local comps/professional input.
❓ What if monthly gain is near zero?
Then investment case depends mostly on resale or non-financial utility value.