True Blue Remodeling

How much should I spend on a remodel?

Remodel Budgeting Basics

 

The obvious first step: budget

If you’re considering a major remodel project this year, you may be asking yourself an essential question. How much should I spend on my project? How will I know if I’m spending too much or too little? What is the best value for my project? Of course, the first step in your kitchen or bathroom renovation will be budgeting.

How much do I budget?

A successful remodel project takes careful planning and coordination before a hammer is picked up. The same goes for the budgeting process. Before you pick up the phone and call any contractors or designers, make sure you have a target number in mind. This will help set your team’s expectations for the scope of work, quality of materials, and construction methods. Having a solid spending plan will put you in control of your project during the planning phase.

The big WHY

Before you determine your budget, you’ll want to understand what goals you are trying to achieve by completing a remodel project. You may want to renovate to update the home, increase its value, or prepare your home for the market. These goals will directly impact how much you may want to spend. Also, the current condition of your home will determine how far you should take your project.

The ’80s called…

The ’80s called, and they want their polished gold trim back! Seriously, suppose your home has not been updated in over 30 years. In that case, you have the perfect candidate for a complete remodel budget. Not only is the out-of-date design style impacting your home’s value, but it’s also probably wearing on your nerves. Update immediately for property value and your sanity. In this instance, I recommend budgeting well within the recommended target percentages that we’ll get into below.

Increase home value

If your primary aim is to increase your property’s value, then take a good look at the current state of your home, especially compared to your neighborhood. You may want to call your realtor and ask about the characteristics of your community to help determine how far you take this remodel project. If the home has fallen into a state of disrepair or is severely outdated, then you’re on the right track, and you may want to invest in your property.

If your home was renovated only 10 years ago, a full-scale remodel might not be your best option for increasing the value of your home. Perhaps just changing some fixtures and finishes to keep up with your style is all you need. In this instance, hiring a general contractor may not suit you. Plan to spend below the percentage brackets outlined below.

Getting your home ready to list

If you’re getting your home ready to list, whether tomorrow or two years from now, you may not want to spend a dime on renovation, maybe not even paint. Please don’t choose new countertops and repaint the walls to cater to the masses. Your buyer may tear them out anyways and repaint the walls over your fresh, agreeable grey. Your real estate agent will have the best recommendations on getting the most bang for your buck.

Remodel Budget Rules of Thumb

The best way to plan what to spend is by looking at your home as an investment. It is recommended to spend as a percentage of the value of your home. This is the best way to prevent overspending or underspending. For example, it just doesn’t make sense to spend $25,000 on a bathroom remodel in a small investment property in the Midwest that’s worth $125,000. However, in Temecula, California, where the median home price is $670,000, that figure may be too low. Here’s the breakdown

Kitchen Remodel Budget

Kitchens typically yield the most return on investment but are also the most complex and involved remodel project.

Kitchens: 10% to 15%

$500,000 = $50,000 to $75,000

$750,000 = $75,000 to $112,500

$1,000,000 = $100,000 to $150,000

Master Bathroom Remodel Budget

Master bathrooms are typically the next most complex remodel project in your home, but also provide a very good ROI.

Master Bathrooms: 5% to 10%

$500,000 = $25,000 to $50,000

$750,000 = $37,500 to $75,000

$1,000,000 = $50,000 to $100,000

Guest Bathroom Remodel Budget

Guest bathrooms are nearly as complex as master bathrooms but have smaller square footage. These rooms also provide a good ROI.

Guest Bathrooms: up to 5%

$500,000 = $25,000

$750,000 = $37,500

$1,000,000 = $50,000

Other Rooms Remodel Budget

Other rooms, such as living rooms, bedrooms, and dining rooms, don’t require a large budget to renovate and cannot provide much ROI.

Other Rooms: 1% to 3%

$500,000 = $5,000 to $15,000

$750,000 = $7,500 to $22,500

$1,000,000 = $10,000 to $30,000

How much does a remodel actually cost!?

This is probably my most asked question. “Can you come out and give me an estimate of what it would cost to do my project?” I’m always happy to share with my clients what they could expect to pay for their project over the phone. It’s not like we’ll get a good answer when we punch into google “how much to remodel my bathroom the way I want it.”

For kitchens, our typical bids range from as low as $25,000 to $90,000.

For bathrooms, our typical bids range from $18,000 to $65,000

Budgeting Perspective

I hope this article has helped guide your understanding of remodeling budgeting. When we look at our budget as a percentage of our home’s value, the dollar amounts begin to make a lot more sense. As inflation continues to raise retail, remodeling, and home prices, we can use these percentages to avoid sticker shock.

Return on Investment

Following these guidelines will help ensure you get the best return on investment out of your project. Another way to determine if you’re truly getting the best value is to determine whether choosing a general contractor is right for you. One last thing to consider, remodeling your home can also have unexpected benefits. A client of mine in 2021 messaged me to inform me that her master bathroom remodeling project eliminated the PMI from her mortgage! Give us a call today to discuss how we can best serve you in accomplishing your remodeling goals.