What Is Cost Recovery?

Cost recovery is the percentage of a renovation's cost that comes back as added home value — a 75% cost recovery on a $20,000 project means about $15,000 in added value.

Formula

Cost Recovery % = Estimated Value Added ÷ Project Cost × 100

Example

A $25,000 kitchen remodel that adds $18,000 in value has a 72% cost recovery.

Why It Matters

No renovation recovers 100% of its cost in most markets — cost recovery helps set realistic expectations for how much of a project's price tag comes back at resale.

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Related Terms

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