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Are you sick of living with the pepto pink bathroom tile from the 1950s? Or, maybe you’re thinking of adding an in-law apartment for when your mom comes to visit. Both projects could increase your enjoyment of your home, but which would be a remodel, and which would be a renovation?
A renovation project focuses on restoring a home to its previous glory, while a remodel involves making more significant changes. The differences between a remodel and a renovation can be seen in the project’s final price tag and the amount of time you can expect your home to be torn apart. In some cases, a renovation will be a smarter investment before selling compared with a remodel, or vice versa! Let’s dive into a remodel vs. renovation.
What is the difference between a remodel and a renovation?
While you might hear the words used interchangeably, they actually have two very different meanings.
A renovation restores a home to what it was previously — this may mean restoring old woodwork, repainting cabinets, or refinishing floors.
Jerome Leyba, an experienced agent and house flipper in Santa Fe, New Mexico, describes a renovation as “going in and maybe doing easier stuff like changing out cabinets, countertops, and tile.” It could be adding finishing touches or customizing a space to your needs and taste.
If it’s a small renovation, you might be able to complete it yourself. It’s often unnecessary to pull permits for these kinds of small projects. The average cost nationwide for a renovation project can range from $18,000 to $72,000. The costs of these vary depending on the scope of the project, of course.
A remodel creates something new — it could mean blowing out walls and combining rooms, changing a home’s floor plan, or adding an addition. When you’re remodeling, you likely need to work with a contractor to pull permits, and the project might take longer. Remodels often involve demolition and structural changes — and because of this, a remodel typically costs more.
Other factors that influence cost include the size of the space you’re sprucing up or adding, the fixtures and finishes you choose, and your geographic area.
When should someone choose a renovation?
You might choose a renovation when you want to maximize your return on investment, or ROI, before selling. If you own a historic home, legal restrictions could prevent you from making any major structural changes. Budget constraints could also push you toward renovation vs. remodeling.
Renovations generally touch on a few areas: functionality, condition, and livability.
- Functionality. Is it impossible to open a pantry door when the oven door is open? That’s a functional issue. A kitchen renovation may be the answer. The National Association of Realtors® estimates that you’ll recover 67% of the cost of a kitchen upgrade when selling.
- Condition. Hardwood floors that have seen a lot of use may need to be refinished — the ROI on this project, per the NAR, is a whopping 147%! Patching and painting damaged walls, or replacing chipped tiles, also improves your home’s condition and sellability.
- Livability. Different families have different needs — if you have young children, you may want to frame the walls in a basement for a playroom.
When Leyba chooses to invest in a “fix and flip,” he has key things he looks at for sellability. “In kitchens, repurposing cabinets, or resealing granite countertops are always great upgrades. In bathrooms, it’s putting in new tile or changing out some of your fixtures.” Sometimes small changes can make a big difference.
When should someone choose a remodel?
A remodel is really only a good idea if you plan on staying in your home a while — this is due to the time and cost involved. A bathroom remodel could cost about $35,000, and adding a new bathroom could run you $80,000. Why would someone choose a remodel, instead of the cheaper option of sprucing up an existing room?
- Expand existing square footage. Adding a bedroom, bathroom, or a full addition can accommodate a growing family or make room for elderly parents. In some seller’s markets, where it’s difficult to find a new home, homeowners are choosing to remodel instead.
- Problems go too deep. A renovation is only an option if the underlying bones of a house are strong. You can swap out tile, paint, and change bathroom fixtures if the underlying subfloor, plumbing, and sheetrock are sound. But if the subfloor has rotted, the sheetrock has mold, and the plumbing has major issues, a renovation isn’t an option.
- Get exactly what you want. Even if you sell and decide to move to get more space, or another bathroom, you’re still living with someone else’s choices. Sometimes it’s easier to add onto your current home and get exactly what you want.
Which option is more expensive?
In general, a remodel will cost more than a renovation. Think of it as the difference between rebuilding a car from the wheels up instead of giving it a new paint job. Nationwide averages show the following differences:
The average cost of a bathroom renovation runs from $2,000 to $5,000 while an average bathroom remodel costs between $5,500 and $15,000. While the high and low end of both ranges are close, you’ll see a big difference in cost depending on where you live and if you pick luxury features such as a jacuzzi tub.
In your kitchen, simple renovations will almost always be less expensive than a full remodel, which would typically cost you anywhere between $11,000 and $75,571. Replacing the countertops? Between $1,856 to $4,329. Painting existing cabinets can be as low as $399 and rarely goes above $2,000. Again, prices will vary significantly depending on your choices, such as granite for a countertop, and if you can keep some appliances or buy new.
The average cost to add a room to a home ranges between $22,500 and $74,000. This could be less than the down payment and closing costs to buy a new home. If you’re unsure which is the better financial choice — a remodel or buying another home — talk to a local agent in your area. They can offer valuable market insights to help you pick the right path.
Choosing the right projects for your needs
Choosing the right projects depends on what you need to make living in the home a good fit for your family, necessary upkeep to keep the home in good shape, and when you plan on selling.
If the repair is urgent and unavoidable, such as a new roof, it’s best not to put it off. Neglected maintenance can lead to major problems in later years and reduce your home’s value.
But before embarking on a remodel or renovation, Leyba strongly recommends talking to a real estate broker. They can pull comparable sales in your neighborhood to guide your decision. For example, if a home with a newly remodeled kitchen and bathroom only sold for 7% more than what the broker thinks your house would sell for, it’s probably not worth the expense.
If you’re planning to sell soon, “You don’t want to shell out money on updates that aren’t going to bring you any type of return,” points out Leyba. “Leverage your broker to see what updates will bring you the most return and help you to sell that property.”
Whether you choose a remodel or a renovation, if this home isn’t your forever home, you’ll want to be smart when prioritizing and budgeting for any work you have done.
Header Image Source: (Point3D Commercial Imaging Ltd. / Unsplash)