Renovating or remodeling your home is a huge and often expensive undertaking, but it is well worth all the effort to have a beautiful kitchen and a more valuable home. Today, we will guide you through the costs involved in remodeling or renovating a home, including labor costs, what you should budget for, and whether it is the right thing for your home.
Although the terms are often used interchangeably, renovating and remodeling actually mean slightly different things.
Remodeling is where you are actually changing aspects of a room or a home for another purpose, whereas renovating is where you are simply updating a room, typically through cosmetic changes only.
Remodeling includes projects that change a room's structure, such as starting your kitchen from scratch, moving appliances, walls and even extending. However, remodeling doesn’t just refer to large projects. It could be as simple as changing a spare bedroom into a home office or a walk-in closet into an en-suite bathroom. As long as the room's functionality is being changed or significantly rearranged, it counts as remodeling.
Renovating, on the other hand, means that the core design of the room remains the same. A renovation may include repairs and cosmetic changes, such as painting, updating flooring, changing the hardware on kitchen cabinets and other furniture, and restoring old aspects to their former glory. These projects won’t typically require a permit to complete, unlike many remodeling projects which will.
As you can imagine, remodeling projects are often more costly than renovation projects with the need for more professional work and better-quality materials.
In the US, the average home renovation costs around $47,000. The cost ranges from about $18,000 to $76,000, depending on factors such as the size of the home, location, and renovation scale. Most of the cost to renovate a house comes from kitchen and bathroom renovations. A kitchen renovation often costs between $5,000 and $20,000, while bathroom renovations fall between $2,500 and $15,000.
If you are looking to move plumbing, electrical outlets, light switches, etc., this will require some remodeling and the cost will generally increase. On the other hand, if you’re just looking to make home improvements, each project or room may only cost you a few hundred dollars up to thousands of dollars. This is why it is important to consider exactly what you want to do with each room and develop a reasonable budget for the whole house.
Whether you are renovating or remodeling, it is always a good rule of thumb to add an extra 10-20% to your budget in case you need to spend more for any unforeseen work or additional materials.
Labor cost for remodeling varies depending on the services they provide, their level of expertise, and your location. With that being said, you can expect rates ranging from as little as $20 per hour to more than $200 per hour.
If you are doing a full home remodel, it is especially advisable to find yourself a trusted general contractor who will hire and manage all of the necessary subcontractors and ensure that your project is on schedule. They will do this for 10% to 20% of your project's total cost, and this cost will be worth it for a large scale project like a house remodel.
On top of this labor cost, subcontractor rates per hour, depending on your location, are:
General Laborer - $30 to $50
Architect - $100 to $250
Interior Designer - $50 to $200
Kitchen Designer - $65 to $250
Painter/Decorator - $20 to $50
Plumber - $45 to $150
Electrician - $50 to $100
Carpenter - $35 to $100
Landscaper - $50 to $150
HVAC Technician - $50 to $150
The amount you should spend on your home renovation depends largely on your lifestyle and the value of the rest of the homes in your neighborhood. As a general rule, to maximize this return on investment, you shouldn’t spend more than 20% of your home’s value on your home renovation, especially if you plan on selling sooner than later.
The average cost per square foot to renovate a home is between $15 to $60, depending on the level of finish you want your renovation project to achieve. This cost will also vary from room to room. With this in mind, experts suggest setting a budget for each room rather than the entire house or property. For example, a kitchen remodel or basement conversion should be 5% to 15% of the total value of your home, whereas living rooms, bedrooms, or bathrooms should only be 1% to 7% of the total value of your home.
The average cost per square foot to remodel a home is between $100 and $250, depending on the type of room being remodeled. For instance, a kitchen will fall at the higher end per square foot, while a living or dining area will be lower.
The average cost of a 1200 square foot home remodel is between $18,000 and $72,000, and a 2000 square foot home remodel between $28,000 and $115,000.
The exact cost of a full remodel depends on the square footage of your home, its location, the scope of your remodeling project, and the quality of materials you wish to use. With a kitchen remodel alone costing an average of around $30,000 and a basement conversion costing an average of $20,000, it is easy to see how a full home remodel requires a large budget!
Let’s break it down into the scope of the remodel:
Low-end remodel
A low-end remodel is likely to cost somewhere between $15,000 and $45,000, depending on the size of your home. This is likely to be a renovation project rather than a remodel, with primarily cosmetic changes. This will include painting the interior and exterior, minor repairs, replacing or restoring trim and molding, new flooring, a kitchen renovation with stock cabinets, inexpensive countertops and appliances, and basic landscaping.
Mid-range remodel
A mid-range remodel is likely to cost somewhere between $40,000 and $75,000, depending on the home’s size. This will include some of the aspects included in the low-end remodel and a complete kitchen remodel, a bathroom remodel, better quality materials, update light fixtures, installation of hardwood flooring, and replaced exterior siding.
High-end remodel
A high-end remodel is likely to cost anything from $75,000 up to $200,000 or more. This will include the upgrades mentioned in low- and mid-range remodel, as well as repairing foundations and roof, updating or moving plumbing and electricals where necessary, using high-end appliances and materials, a custom kitchen renovation, changes to the layout, replacement of HVAC systems, a basement or attic conversion, and interior design from a professional.
Generally, you will find that it is 20% to 50% cheaper to renovate or remodel an entire home than it is to build a new home from scratch. Building a new home is likely to cost somewhere between $155,000 and $400,000, while a full home remodel costs between $100,000 and $200,000.
There are some exceptions to this rule, however. If your home has issues with the foundations, structural issues, and/or has outdated plumbing, electrical, and HVAC systems, this can be very expensive to fix or replace, and so it may be cheaper to build new.
There are also times when you will find that your home’s resale value will essentially be capped, and your renovation costs may actually be higher than your return on investment. If this is the case, you will simply be wasting your money when a new home would be worth a lot more.
When it comes to estimating the cost of your house renovation or remodel, you need to consider the square footage of your home, the age of your house, its location, and its current condition. You also need to think about whether you simply need to renovate your home or whether it needs a remodel, i.e., whether any structural changes need to be made or whether functionality needs to be changed.
The best way to estimate cost is by using a remodeling calculator, like this one, to work out the likely cost for each room. These estimated costs can then be added together to come to an estimated budget for your entire home renovation or remodel. Don’t forget to budget 10-20% for unexpected costs.
If it’s within your budget, renovating or remodeling your home is well worth the time, effort, and money. You will increase your home’s quality and value, make it a more enjoyable place to live, and even increase its size. Whatever the size of your project, it is important to budget carefully for every room and the exterior of your home and be prepared for any unexpected expenses along the way.
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