Whether a market is “hot” or “cold,” some percentage of the households it contains are more likely to take on a remodeling project than their neighbors. The trick is knowing which ones.

Remodelers often target entire ZIP codes with their marketing campaigns, and those who market in proximity to an ongoing job target every house for several blocks in every direction. The fact is, though, much of the investment in that kind of marketing is wasted on households that are not ideal prospects for remodeling.

Our Residential Remodeling Index (RRI) has identified three household types that are most likely to spend on remodeling.

In this hypothetical neighborhood of 28 homes, marketing ROI for half of the households (red/orange) is much better than for the other half (blue/green). It pays to know which is which.

For more information about RRI methodology, see the January 2011 issue of REMODELING  or go to http://go.hw.net/r-rri. For more information on RRI Local Market Reports, go to http://go.hw.net/r-buyrri.