You love where you live – from the location, to the neighborhood, to the nearby downtown, your current living situation is ideal. However, the home you live in needs some updating in order to be absolutely perfect, so you’ve decided to undergo a major home remodeling project.
You know which spaces are in crucial need of some TLC and other areas that are wishlist items. Naturally, you’ve got questions, the main one being what amount of money you should put aside for a healthy home remodeling budget?
The most common answer you will hear is: it depends.
The BrightLeaf Homes answer: it depends… on your budget and the size of your project.
There are a lot of elements that will influence your home remodeling cost. In this article, we’ll explore why a home renovation is a viable option, what a typical budget looks like if you are considering one, plus a few home remodeling budget tips.
The Popularity of Home Remodeling
First and foremost, when compared to selling and buying another home or building custom, home remodeling takes first place in cost efficiency when compared to the other options.
For a similar amount of space, a home renovation is generally going to cost less than a new construction home, while still getting the most out of your budget since there are so many aspects within your existing home that can be saved or built upon.
How much should you expect to spend on a home renovation?
Keep in mind that home renovations not only increase your enjoyment of your own home, but they also often add significant resale value and equity. You can expect anywhere from 40% to 80% return on investment for most home renovation projects.
Some of our most common and highly recommended home remodeling and renovation projects are:
- Complete basement renovation or finishing
- Renovating or reconfiguring the full first floor – that can include a new kitchen, a new bathroom, new floor coverings, etc.
- Full second story addition or renovation
- Exterior home renovation updating it to match your style
The above project options have the strongest return on investment, however, they also come with one of the highest price tags. Typical home remodeling budgets at BrightLeaf usually start at $400K.
After being thrust into the remote-everything lifestyle from 2020, a home needs to serve multiple purposes, from an office and classroom to a gym and resort. There is also increasing interest in bringing extended family members together under one roof, especially older adults, which requires expanding a home’s footprint or square footage to make appropriate space.
Believe it or not, 75% of homeowners say their home renovation budget for 2021 has remained the same if not increased from last year.
Home remodeling budget tips
Before you set your home remodeling budget or get too ahead of yourself in the planning process, it’s important to understand what you can actually afford. Determining your financing options in advance will set realistic expectations and prevent under budgeting for the overall project.
After securing financing for your home renovation, make sure you set aside 5-10% for a contingency budget. One issue commonly faced with large-scale renovation projects is discovering unexpected repairs once you begin ripping out the walls or flooring. While we strive to plan for this early on in the process, it’s nearly impossible to anticipate until demolition begins.
Ways to help plan for unexpected expenses is to prioritize each aspect of the home remodeling project. Details such as custom built-ins, expensive lighting fixtures, or other costly high-end design elements should have more economical alternative options you can fall back on.
Get started on your home renovation today
Interested in learning more about your home remodeling options and what makes sense for your specific budget? Click here to schedule an appointment with a BrightLeaf Remodeling Home Consultant.