Please explain remodeling 'return on investment'
I'm confused. I've read a lot on how much return on investment you can expect from such and such remodeling jobs, 80%, 70%, etc. but what does that really mean?
Say I have a house that would sell AS IS for $200,000.
Say I spend $20,000 remodeling an old bathroom for an expected 85% return on investment. $20,000 * .85 = $17,000.
Does that mean that the selling price should go up to around $217,000, meaning that I only lose $3,000 of my remodeling money?
Or does it mean that the selling price should go up to around $237,000 ($20,000 + $17,000) meaning that I actually make money from the remodeling?
I realize these are pretend numbers. I'm just trying to make sense of the math.
Thanks for not making fun of me : )