Who says it’s what’s on the inside that matters most? Not homebuyers, apparently.

The results of the 2007 Remodeling Cost vs. Value Report show that three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades.

The most profitable project on the national level was upscale siding replacement, recouping 88 percent of costs on resale.

Wood deck additions and wood window replacements also returned more than 80 percent of costs, at 85 percent and 81 percent, respectively.

On a national average, the only interior project to return more than 80 percent of remodeling costs this year was a minor kitchen remodel, returning 83 percent of project costs at resale.

The report, produced by Hanley Wood LLC in cooperation with REALTOR Magazine, compares construction costs with resale values for 29 midrange and upscale remodeling projects.

The least profitable projects? A back-up power generator, sunroom addition, and home office remodel.

Source: National Association of Realtors