How to Remodel a Home: Steps to Plan It Out and Save Money

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Table of contents

Set your plan

Keep costs in check

Rachel and Bill* loved their Kensington neighborhood in San Diego where they could walk to shops and restaurants. But their charming 1928 Spanish Eclectic-style had a funky layout and dated features.

In a recent pandemic remodel, they removed a wall between the kitchen and living room, replaced some cabinets with windows for more light, added energy efficiency, and put in hardwood floors. They also transformed a closet into a small office — all in a four month period.

“I’m so glad we went through the process,” says Rachel. “I love the quality of the space, the light, and that everything is fixed and clean.”

If you’re reading this, you want the same joy and satisfaction out of your own major remodeling project that this couple was able to achieve. Here we share some of the aspects of their careful planning that led to a speedy and successful remodel, plus tips for cutting costs that can easily swell during a big renovation.

A kitchen in a home that has been remodeled.
Source: (Greg Rosenke / Unsplash)

Dream big, but consider resale value

For many people, spending hours scouring Pinterest and home décor websites is the fun part of planning a remodel. But don’t let your hunt for the perfect fixtures and paint colors distract you from the big picture.

Are you adding space and features to create a forever home that reflects your personality? Then go for that vintage claw-foot tub and crystal chandelier in your ensuite bathroom.

If your goal is to sell your home, a thoughtful remodel has great potential to increase resale value. But avoid choices that are too quirky or pricey.

“You really want to think about what you’re doing, especially if you’re planning to sell soon,” says Timothy Belko, a top performing New Jersey real estate agent. “A buyer’s probably not going to care if you put $50,000 worth of gold leaf trim in your house. People worry about catching that one buyer’s attention when in reality, you want to attract as many buyers as possible.”

A gourmet kitchen with custom French Country cabinets and a backsplash of hand-painted Italian tile may be your dream. But a classic kitchen with streamlined Shaker cabinets and simple subway tile will cost less and pay off later.

Determine who you need to hire

You have a clear vision of what you want to accomplish with your remodel. But it’s unlikely that you’re doing it all yourself unless you’re a contractor by trade. Here’s an overview of the main players who can help you score a win with your remodel. 


Web magazine Urdesign, which covers design and architecture, recommends hiring an architect if your remodel will cost more than 5% of your home’s value or involves major structural or layout changes. Architect rates range from about $60 to $125 per hour to help with design and draw plans that meet building code requirements.

“If a job requires things like rearranging interior walls, putting new windows in exterior walls, or a fair amount of additional design beyond what a general contractor can offer, it makes sense to use an architect,” says Michael Lonsdale, a general contractor in Oakland who’s been remodeling homes for 31 years.


For complicated kitchen or bathroom remodels, hiring a savvy interior designer can be worthwhile. In addition to helping you come up with a functional layout and attractive look for your new space, designers also understand local building codes and regulations.

HomeAdvisor reports the average cost to hire a designer is $6,550. But investing in one could save you money in the long run. Designers get trade discounts they pass on to their clients and offer guidance on where to cut corners in a project and where to splurge.

General contractor

If your remodel doesn’t demand extensive changes to your existing layout and you’re confident with your design decisions, you can skip the designer or architect and work directly with your general contractor. Your contractor is responsible for bringing your vision to life and managing the other subcontractors you’ll need to complete the project, including plumbers, electricians, and paint and drywall repair.


A general contractor will hire all subcontractors needed for your renovation. Hiring and managing a team of individual subcontractors yourself is another alternative. You can save money by ordering your own materials and avoiding a general contractor’s markups. But the headaches he would handle, such as overseeing labor and keeping different phases of the project on track, will fall on you.

San Diego resident Kim T. and her husband learned this the hard way. They hired subcontractors for a remodel that included two bathrooms, a kitchen and a staircase. Seemingly little things they hadn’t considered, like what kind of lights to put under the new kitchen cabinets, often stalled the project.

Although they saved a chunk of money, Kim wouldn’t take the same approach again. “It was a lot to manage and we ran into timing issues,” he explains. “The process took way longer than it should have.”

A contractor on a home that is being remodeled.
Source: (Zohair Mirza / Unsplash)

Assemble your crew

You know who you need to hire. Now, you must find the right people for the job. According to a recent study by Houzz, 30% of homeowners cited finding service providers as the biggest hassle they faced when going through a remodel. Follow these tips to ease the process.

Get personal referrals or go online

Start by collecting contractor recommendations from your social circle. Rachel found her contractor through friends who used him for a kitchen remodel and were thrilled with his work.

“I could tell he understood design and was very picky,” she shares. “I wanted someone who wouldn’t make assumptions about design details or finishes but would come to me with those questions. He was good at recommending places for products we needed and letting us know when we had to make decisions about specific things in order to stay on schedule.”

In addition to getting referrals from friends, you can check out sites like Thumbtack, HomeAdvisor, and Houzz for vetted reviews of contractors in your area.

Vet your candidates

Lonsdale suggests starting with basic questions when vetting general contractors, like how long they’ve been in business and how many employees they have.

Anyone you’re considering should have at least seven years of direct experience as a contractor. Verify that they’re licensed and insured — many states have a Contractors State License Board where you can find this information.

Some government organizations advise getting at least three written bids on a project when shopping for a contractor.

Look for relevant expertise

It’s also important to make sure a contractor’s skills are suited to your particular remodel. A guy who’s a whiz with kitchen renovations may not be the best fit for a new bedroom addition, and vice versa. Request a tour of ongoing or recent projects, especially ones that are like yours.

“I like to show people a job we’re currently doing so they can hear from that customer what it’s like to work with me,” says Lonsdale.

He adds that homeowners should be alert for red flags, such as a contractor asking for cash instead of checks. Or requesting checks written directly to them instead of their company.

Plan ahead and be patient

Begin your search for a contractor as soon as possible.

“I started looking for a contractor two years before we began construction,” says Rachel. “One of my biggest recommendations is that when you find the right contractor based on personal experience others have had with them, get in line and wait.”

Her neighbors went through a similar remodel. When their top two choices weren’t available, they went with a third option and had a terrible experience.

A credit card used to pay for a home remodel.
Source: (Towfiqu barbhuiya / Unsplash)

Figure out your financing

Before you embark on a remodeling project, you need to know how you’ll pay for it. Pat yourself on the back if you’ve squirreled away enough cash to cover the costs. You’re in good company — data from Houzz shows that 79% of homeowners use cash to pay for extensive renovations.

Find a few more options for funding your remodel below:

Credit card: According to Houzz, paying with plastic is the second most popular way to cover renovation costs. The upside is you get a revolving line of credit to spend as you wish. The downside is high interest rates if you can’t pay off your balance each month.

Home equity loan: Using your home as collateral, this type of loan works like a mortgage and provides you with a lump sum of money for your renovations. You’ll need at least 10% equity in your home to qualify. A home equity loan typically has fixed interest rates and payments.

Home equity line of credit (HELOC): Similar to a home equity loan, a HELOC lets you tap into your home’s equity. But instead of getting your money in one chunk, a HELOC is a revolving line of credit that works more like a credit card. You’ll use money as you need it and make monthly payments until the loan expires — usually within 10 years — and the remaining balance is due. Unlike a home equity loan, a HELOC has variable interest rates.  

Home improvement loan: Because these are personal loans, you won’t have to use your home as collateral to secure one. And the approval process is fast and easy compared to home equity loans. The tradeoff? Higher interest rates and a shorter time to repay the loan, typically within three to five years.

For more information on renovation loans, see our full article on the topic.

Be realistic with your budget

According to Lonsdale, it’s not uncommon for people to be way off the mark when it comes to budgeting for a remodel.

“Sometimes clients tell me they have a $60,000 budget for their kitchen remodel,” he explains. “Then they start rattling off what they want and I see that it’s actually a $150,000 project. So we have to change the plan or increase the budget.”

To give you an idea of how far your dollar will go, here are examples of what four different budgets can cover based on price estimates of popular home improvement projects from

Need help getting started with your budget? Try an online tool like this Remodeling Calculator.

A planner used to remodel a home.
Source: (2H Media / Unsplash)

Hammer out a count-down-to-construction plan

Before your remodel kicks off, you need to complete a few more important tasks on your to-do list:

Review and sign contract

Go over your contract carefully to make sure you understand the scope of the work and costs. At a minimum, it should specify the following:

  • The contractor will get all permits and approvals
  • A payment schedule
  • Start and end dates for the project

Map out a timeline

Make sure you and your contractor are on the same page when it comes to your timeline for completing the renovation. Ask about conflicting projects that could leave him short-staffed or prevent him from being on-site to oversee work.

Get permits

You’ll need permits for electrical, mechanical and structural work, as well as anything that changes the footprint of your home, such as a room addition. Permit requirements vary depending on where you live, so visit your city‘s website to make sure you know what you need. While your contractor can secure them for you, you’re responsible for having them in place. Failing to do so can bring construction to a screeching halt, result in costly fines, and even require you to re-do completed work.

Decide if you’re staying or going

If you can cope with the disruption of staying put during your remodel, you’ll save big bucks. Kristi W. and her family, who live in California, toughed it out at home during a recent five-month renovation. The project went smoothly, although the noise and having workers underfoot was stressful.

“It got old after a while, especially since I was working from home,” she admits.

Many people, like Rachel and Bill, don’t want to deal with the chaos of living in a torn-up home. If you’re moving out, look for a place as soon as possible. When Rachel and Bill started apartment hunting, they discovered many require a year lease. They also hadn’t anticipated all the application fees.

Prepare for surprises and delays

Problems come with the territory during a remodel, so it’s smart to include an extra 10%-20% in your budget to cover unexpected expenses.

Good contractors try to identify potential trouble spots ahead of time, but some things aren’t apparent until they dig into the job. For example, your contractor might discover a bad case of dry rot when he tears into your bathroom wall. Other common hidden issues include electrical and plumbing problems.

“Those things really aren’t predictable because they’re in the wall,” says Lonsdale. “But you need to let people know what you might find and how you might resolve the issue.”

Problems also arise when design plans can’t be completed due to structural issues. For example, a wall may not be plumb or require more framing.

Keep the lines of communication open

From the first meeting with your contractor to the final day of construction, good communication is critical to ensuring your remodel story has a happy ending. For some homeowners, that might mean daily or weekly check-ins. Others may only want to hear from their contractor when a problem comes up. Let your contractor know what works for you.

“There has to be agreement at the beginning of a job about the way it will go,” says Lonsdale. “You’re paying your contractor to run the project the way he thinks is best — he should be able to explain his reasons. The customer should feel comfortable with his plan before signing the contract.”

An appliance in a home that needs to be remodeled.
Source: (Erik Mclean / Unsplash)

Keep remodeling costs in check

Even with careful planning, it’s easy for remodeling expenses to get out of hand. So it’s worth exploring some practical and creative ways to rein them in:

Avoid impulsive budget busters

It’s easy to get lax with your budget once a project’s underway. Lonsdale says lots of homeowners don’t realize that things like tweaks to cabinets or going with more intricate tile for a backsplash can make the cost of a remodel skyrocket.

“If you ask to redo or add something that’s not included in the original budget, it’s important to ask your contractor to put in writing how much it will cost,” he explains. “Otherwise, little things can slip by.”

Repurpose existing materials

Recycling materials from your original home is good for the environment and your budget.

Shop seasonal sales

If timing allows, take advantage of seasonal discounts on major appliances like refrigerators and washing machines. Maytag, for example, offers hefty rebates on its fridges in May.

Find alternatives to high-end options

Substitute affordable look-alikes for expensive products to yield big savings. If you love luxe marble countertops, for instance, consider a more affordable choice like quartz. According to Fixr, a 30-foot marble countertop could cost as much as $5,000 while the same size countertop in quartz will run about $3,760. Websites like Wayfair are great for scoring deals on everything from bathroom vanities to cabinet knobs. 

Schedule in the off-season

Contractors are busiest during spring and summer. Work tends to slow down in winter — some contractors extend off-season discounts. Even if yours doesn’t, he can dedicate more time and labor to your remodel, which can speed up the job and translate into reduced costs.

Tackle your renovation with confidence

Now that you’ve got the inside scoop on how the remodeling process works, perhaps you’re ready to take the plunge. Whether you’re focused on creating the forever home of your dreams or want to wow potential buyers with a stylish, updated house in turnkey condition, careful planning will reduce your stress — not to mention boost your odds of loving the end result.

*Rachel and Bill are pseudo names; the couple asked to be anonymous for privacy reasons.

Header Image Source: (Mike Newbry / Unsplash)