How Much Should You Spend Remodeling A House For Max Profit?

How Much Does It Cost to Remodel a House?

According to HomeAdvisor, the average cost of renovating a home that is 1,000 square feet is $19,000. For homes in the 3,000 to 4,000 square foot range, the average cost climbs to $87,500. Renovations made to an older home tend to cost more than a newer one, especially if the wiring, plumbing and other features aren’t up to code.

Typically, you can expect to spend at least $10 to $60 per square foot on any renovation.

When you’re deciding on your home renovation budget, it can be easier, and more affordable, to prioritize projects by room and build a budget around the cost of each individual project.

Average cost to renovate:

Kitchen $4,000 – $60,000
Bathroom $2,500 – $25,000
Basement $11,000 – $30,000

Source: HomeAdvisor – last updated July 2021

Cost of Whole House Remodel

While renovating typically refers to cosmetic upgrades, remodeling often involves major structural changes. If you’re doing a whole house remodel, you might gut the house and start over, perhaps changing the floor plan, knocking down walls, or rearranging electrical wiring in the process. 

Building an addition can also have a high ROI when it comes time to resell, according to Matt Lavinder, president of home remodeling company New Again Houses. “With COVID, the person’s home became a whole lot more,” Lavinder says. “Now it’s not just a home, it’s also a school, office, it’s where you go retail shopping, it’s your mall, theater. It’s all these different purposes now. At the end of the day, the square footage has become much more valuable.”

An addition or whole house remodel is a more complex undertaking than a minor renovation, and as such your renovation costs per square foot may be higher. While there are a lot of variables that affect the cost to remodel a house, these estimates from Realtor.com offer some average costs:

Small remodel with painting, small repairs and new landscaping$25,000 to $45,000
Moderate remodel with kitchen and bathroom overhauls$46,000 to $75,000
Major remodel, with foundation, roof and sewer repairs$76,000 and up

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Home Equity Loan or HELOC

These are two of the most popular options when it

These are two of the most popular options when it comes to paying for home renovations because home equity lines of credit (HELOCs) and home equity loans come with much lower interest rates than credit cards or personal loans. These options are only available to people who have been in their home a significant amount of time and have more than 20% equity in the home.

Garage Remodeling Costs

A complete garage remodel will range $7,000 – $15,000, on average8. Small upgrades like a garage door replacement can add significant value to your home, nearly matching your investment at a 95% return.

Garage door replacement average cost: $3,907

Additional home value: $3,663

Return on investment: 94%

Remodel House Into An Entryway

A grand entrance is a high-end upgrade for any home, averaging just over $9,000. While you may feel sticker shock with the price tag, consider the labor associated. This renovation calls for moving electrical elements, updating the trim, installing a wider casing and a painting.

High-end grand entry door average cost: $10,044

Additional home value: $6,116

Return on investment: 61%

Mid-Range entry door average cost: $2,082

Additional home value: $1,353

Return on investment: 65%

Home Renovation Costs: DIY vs. Hiring a Professional

A plethora of home improvement shows have convinced many homeowners that home renovation is a reasonably straightforward operation that any reasonable person could complete. In some cases, that’s true. Not every renovation includes major structural work. If the renovation is more cosmetic, you might be comfortable painting, installing a medicine cabinet, putting up a kitchen backsplash, or replacing a faucet. These projects don’t require permitting or structural considerations, and they can usually be done in a short time frame.

Sadly, up to 63 percent of DIYers regret large renovation projects that took excessive time to complete or were done improperly due to lack of knowledge. Any renovation that includes changes to floor plans, structures, or mechanical systems will likely require a building permit from local authorities. In many states, significant renovations that touch structures, roofs, electrical or gas, or foundations require a contractor’s oversight to ensure all building codes are followed. Home additions can be nearly as complex as building a home.

Beyond legal restrictions regarding DIY renovations, the biggest reason you’ll want to hire a pro is peace of mind. An architect and contractor have the know-how to bring your dream to life. You won’t have to stress about scheduling multiple subcontractors, organizing deliveries, or solving problems. A contractor should have warranties against future issues as well. Contractors can also identify ways to save money by sourcing materials through wholesale dealers or offering alternate suggestions. Home renovation costs are well invested in a qualified contractor.

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Frequently asked questions

What’s the difference between a house renovation and remodel?

Renovations are less-expensive repairs, restorations, and cosmetic finishes like painting that typically don’t require permits. Remodeling changes the structure or volume of a space with gutting, installing new elements, new additions, or removing walls.

How long does it take to renovate a house?

Completely renovating a 3-bedroom house takes 2 to 8 months on average, depending on the size and amount of structural changes. Allow 1-month extra for planning, unexpected issues, permits, and custom orders. Minor remodels and cosmetic upgrades take 1 week to 2 months.

Time it takes to renovate a house
Remodel Time to complete
Full home renovation 2 – 8 months
Minor bathroom remodel 1 – 3 weeks
Full bathroom remodel 2 – 12 weeks
Minor kitchen renovation 1 – 2 weeks
Full kitchen remodel 2 – 6 months
Roof remodeling 2 – 7 days
Exterior home remodel 1 – 2 weeks
Basement remodel 2 – 8 weeks
Room addition 4 – 8 weeks
Attic renovation 8 – 10 weeks

How much does a home remodel designer or architect cost?

A home remodel designer costs $450 to $1,500 per room, 10% of the total budget, or up to 25% in management fees to supervise contractors during remodeling. Licensed architects charge 10% to 20% of the remodeling budget or $100 to $250 per hour to plan and create professional blueprints.

How much do home improvements or repairs cost?

National average home improvement costs are $100 to $250 per square foot. Minor house repairs cost $150 to $600 for electrical or plumbing work, while major improvements cost $25,000 and $75,000, such as a home addition.

Still have questions? Ask a remodeling pro. View Pros

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Tips for Saving on Home Remodeling Costs

If you’d like to save on home remodeling costs, you can always do more of the work yourself. Just be forewarned, if you do the job wrong, you could experience more costly repairs in the future.

Further, if you are doing your home remodel with a city permit, you may not pass inspection if you don’t really know what you’re doing. The electrical inspection is the hardest to pass. But building and plumbing inspection isn’t a cake walk either.

Here are some ways you can save on home remodeling costs:

  • DIY demolition: You don’t need to be an expert to pound a hammer into the wall and remove all the debris.
  • Order and pick up all the finishes: Instead of having the contractor charge you an hourly fee to order and pick up all the finishes, do it yourself. After all, it’s up to you to decide what you like. The contractor is focused on the rough finishes.
  • DIY painting. Painting is one of the easiest things all of us can do to save on home remodeling costs. I slowly painted all my bedrooms in the last house I bought while the subcontractors were remodeling the bathrooms and kitchen. Painting is also very relaxing, especially if you put on some music or listen to a podcast.
  • Buy used. If you are really frugal, you can buy slightly used appliances for less.
  • Skip getting a permit. If you are doing big structural and electrical work, I highly recommend getting a permit. The permit gets inspectors to come out and expect that your project is done correct at every stage. However, a permit also costs money and increases your property tax bill. Your increased property tax bill will equal the cost of your remodel times a percentage. And property tax bills last forever.

These five things are a low-risk way to save on home remodeling costs. I really wouldn’t do the plumbing, building, and electrical by yourself. You want to pass the multiple stages of inspection on the first try. Once you fail one stage, it may take a week or months to pass again.

Steps for Creating a Detailed Home Renovation Budget

Step 1: Prioritize Remodeling Needs

The easiest way to stay on budget during a renovation is to know exactly what you want. Create a list of everything you would like the project to include and then separate items into wants and needs.

“Think about the proper order to do things in. It makes no sense to get new kitchen counters if you know that later on you’ll likely need to upgrade your cabinets or change the floor plan, right? Doing things in the right order saves time and money in the long run.”

Christine White | The (mostly) Simple Life

Ask yourself these questions:

  • What do you want this project to do?
  • What details are required to make that happen?
  • What are you willing to compromise on?
  • What are you willing to splurge on?

Step 2: Create a Detailed Remodeling Plan With Cost Estimates

After setting the goal for your home renovation, create a detailed plan that includes expected costs. This will help you build a remodeling budget and communicate exactly what you want with your contractors.

Build a spreadsheet that includes each portion of the project and the estimated cost for labor and materials. To develop cost estimates:

  • Use resources like HomeAdvisor to estimate labor costs for engineers, architects, plumbers and handymen. Labor usually accounts for 20 to 35 percent of a project’s budget.
  • Choose fixtures and finishes and calculate what you will spend on them. Include paint, knobs, faucets, tile, flooring and anything else you’ll need. Don’t forget to include taxes and shipping costs in the estimates for your materials.
  • Include the appliances you want and what you expect to spend on them. Include costs for installation, delivery and how you plan to dispose of appliances.
  • Consider what living expenses you will incur during your project. Consider the costs for living without a functioning kitchen, boarding pets or staying outside the home during your project and include these costs in your spreadsheet.

If you can create a plan that is detailed enough and includes your choice of finishes and fixtures, your conversations with contractors can focus purely on labor costs and time estimates.

“Don’t forget to budget for small things. You may need paint brushes, tape, sandpaper, drop cloths, hand tools, and other supplies. While none of those costs too much, they can easily add up to $100 or much more when you need a bunch of random little things.”

Christine White | The (mostly) Simple Life

Step 3: Request Bids From Multiple Contractors

Now you know what you need, what you want and what you can afford to pay for each item. It’s time to find a contractor that can complete your project within your budget.

Find local companies with good reviews and ask them to create a bid for your project. Get bids from at least three companies to accurately compare the costs.

When choosing a contractor:

  • Complete interviews and check their references.
  • Be very clear about both your project and your remodeling budget. If your contractor knows you’re sticking to a tight budget, they will be more likely to talk through additional expenses, time delays and project changes with you.
  • Make sure the contractor thoroughly understands your needs and has a clear idea of how you plan to prioritize parts of the project.
  • Talk through how you will approach any unforeseen issues and how it will affect the budget of the project.

If one contractor’s bid is well below the others, toss it out. Cheap labor sounds appealing but opens the door to errors which can cost you more money later. Use competing bids to negotiate with your preferred contractor.

If none of the contractor estimates fit into your remodeling budget, cut down on the project until you’re comfortable with the cost. Use your list of wants and needs to eliminate parts of the project you previously deemed less important.

Once you’ve selected your contractor, ask them to look at your project plan and home renovation budget to see if there are any costs you may have overlooked.

Use the contractor’s estimate as well as feedback to make a final update to your project plan before beginning work to make sure the final project stays on budget.

Revisiting My Last Home Remodel

My last home project entailed building a 275 square foot deck off my master bedroom while also replacing two, 50-year-old aluminum windows spanning nine feet in width with a 12-foot sliding glass door. I called this project Phase Two when I bought my fixer in 2014.

Phase One entailed remodeling my kitchen, updating the electrical, refinishing the floors, painting the entire interior, replacing the roof, updating the plumbing, painting the exterior, and building a new master bathroom.

If you’re living in the house, it’s a good idea to space projects out over time. You’ll have more time to save money so the expense won’t feel as painful. You’ll also get to think more thoroughly about the things you want to be done so there should be fewer remodeling redos/regrets.

Finally, if you’re flexible on time, your contractor may give you better pricing because you may be employing him during slow periods.

Questions to Ask About Home Renovation Costs

The steps involved in a home renovation are complex and confusing for first-time renovators. Talking openly with your general contractor can help clear up questions and avoid miscommunication on home renovation costs.

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  • How much does a house cost compared to a whole-house renovation?
  • Is it cheaper to renovate or gut and remodel?
  • How long will my project take to complete?
  • Will you obtain all building permits?
  • Do you hire and pay for subcontractors?
  • Will they come to my house to inspect the job and provide an estimate?
  • Are your crews licensed and insured?
  • Have you completed many home renovations like this before?
  • Do you typically have cost overruns?
  • Are we on the same page about this idea?
  • Can we review the estimate line by line?
  • My house was built in the 80s. What kind of problems do you expect we might find?
  • What if I change my mind about a design partway through the project? What will that cost me?
  • What kind of payment structure do you require?
  • How do you handle challenges or material delays?
  • What kind of warranties do you provide?

Return On Investment For Top Renovations

When embarking on any major remodeling project in your house its important to think about the prospective return on investment.

Some remodels are done right before the sale of the house in order to boost its value, while others are done for personal enjoyment with the goal of adding long terms value to the home.

Here are the National Average ROI figures for the most popular remodeling projects.

Project Type Remodel Cost Average ROI Your Return
Minor kitchen remodel $21,198 81.10% $17,191
Mid-range full kitchen remodel $63,829 59% $37,637
High-end full kitchen remodel $125,721 53.50% $67,212
Mid-range full bathroom remodel $19,134 70.10% $13,422
High-end full bathroom remodel $61,662 56.20% $34,644
Interior Painting $3,185 107.00% $3,408
Floor replacement (hardwood) $18,500 75.00% $13,875
Finishing the attic (with bathroom) $47,240 62.00% $29,289
Finishing the basement (with bathroom) $56,850 73.00% $41,501
Window Replacement (wood) $19,391 69.50% $27,901
Window Replacement (vinyl) $15,995 74.30% $11,884

Keep in mind that the actual return on investment on any remodel will largely depend on local real estate market trends as well as the level of renovation you are doing.

If you are not sure whether a specific remodel is a smart investment, its best to contact a local experienced real estate agent for advice.

Average cost to gut & remodel a house

The average cost to gut and remodel a house is $100,000 to $200,000, depending on the square footage and age. Gut renovation costs $60 to $150 per square foot and includes demolition, structural improvements, new electrical and plumbing, new roof and HVAC, appliances, and finishings.

Cost of gutting a house and remodeling
Renovation Average cost
Gut a house to the studs $2,500 – $7,000
Complete gut and remodel $100,000 – $200,000

Cost to gut a house

The average cost to gut a house to the studs is $2,500 to $7,000 or more, which includes permits, labor, and material disposal. If the home has asbestos inside, it costs $1,200 to $2,800 extra for safe gutting and removal.

Cost to rehab a house

The average cost to rehab a house is $20,000 to $75,000 or $20 to $50 per square foot. A full gut rehab costs $100,000 to $200,000 to remodel a house completely. Generally, the cost per square feet gets cheaper as the house size increases.

Rehabbing is a term used interchangeably with remodeling and renovating. The extent of the remodel, location, and choice of materials affect the total cost.

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Gifts

It’s nice if your parents want to pitch in to help financially. If given the choice between using the money for a down payment on a home or for renovations, choose the latter. When you use cash to help finance a home purchase, the bank will want to see documentation for the money, and that can be a hassle.

I also like to say that using gifts for home renovations instead of the actual purchase helps buyers get into a home they can actually afford.

Ways to Save Money on Home Renovation

While you can’t control the supply chain, you can find ways to save money on your home renovation. Karp recommends working with people who will share costs with you upfront. 

“I think the number one thing is to have the right team, a team that you trust,” she says. “As much as possible, homeowners should try to get an idea of the cost of the project, meaning architectural fees, compliance fees, and build costs at the schematic design, development, and construction stage.”

Allow space in your timeline for unexpected delays, Weiss says.  

“Make a sort of renovation calendar that has enough space for any sort of interruptions,” she says. “Even [prepare for] things like your contractors have to be out because they may have been exposed to COVID. There’s nothing worse than expecting a renovation to be done months and months before it’s actually done, so make sure you can dedicate ample time to the project to account for the hiccups you may face.”

Finally, Lavinder reminds homeowners to solidify their renovation plans before they get started. 

“People may have a plan for the remodel, but then they change their mind in the middle,” he says. “That has a ripple effect that affects all these different costs. Going into a project and sticking with it and not changing your mind is one of the most important parts of doing a successful remodel.”

Bathroom Renovations

 Average Bathroom Renovation Costs

Low-end cost $2,500
Average cost $10,500
High-end cost $50,000 +

The most common bathroom renovation updates and their average prices include:

  • Sinks: $50 – $500
  • Vanities: $200 – $18,000
  • Toilets: $100 – $1,000
  • Showers/Tubs: $200 – $6,000
  • Countertops: $4 – $100 per square foot
  • Tiles: $1 – $100 per square foot
  • Lighting: $20 – $100

Small Bathroom Remodels

Partial half-bath remodel projects typically cost $500 – $1,500 and include:

  • Sink
  • Toilet

A full half-bath remodel costs $2,000 – $7,000 on average and include updates like:

  • Floor
  • Sink
  • Toilet

Mid-Size Bathroom Remodels

A partial bathroom remodel costs $2,500 – $7,500 on average and includes updates like:

  • Tile
  • Toilet
  • Sink

Full bathroom remodels generally cost $6,000 – $10,000 when updating things like:

  • Tub and shower combo
  • Flooring
  • Toilet
  • Sink

Large Bathroom Remodels

Partial master bath remodels can still be quite involved, costing $14,000 – $18,000 on average and including updates like:

  • Shower
  • Vanity top and sink
  • Toilet
  • Flooring

Full master bath remodels are essentially double the price, costing $25,000 – $35,000, and include updates like:

  • Separate tub and shower
  • Double vanity
  • Dual sinks
  • Toilet
  • New flooring

Learn more about bathroom renovations:

Total house makeover: A real-life example

Holmes shared a recent proposal for a complete remodel of a 3,750 square foot home where his firm did most of the labor, but the buyer saved some costs sourcing appliances and hardware:

Full Gut Remodel Labor Materials (Estimate) Cost
Demolition/Disposal $1,500 $1,000 $2,500
Structural Repair $8,000 $6,725 $14,725
Plumbing $25,000 $1,500 $26,500
Installing HVAC $8,000 $3,500 $11,500
Electrical $12,000 $2,400 $14,400
Drywall & Primer Accounted for in materials $1.50 per sq ft. $25,143.50
Interior Doors $50 $125 per door $1,750
Flooring $2 per sq ft. $3 per sq ft. $18,625
Kitchen Cabinets $1,750 $4,800 $6,550
Kitchen Counters $45 per sq ft. (labor included) $3,037.50
Kitchen Backsplash $15 per sq ft. $5 per sq ft. $560
Bath tile $5 per sq ft. $4 per sq ft. $5,400
Vanities $100 $500 (per vanity) $3,000
Total $133,691

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