I Created the Ultimate Home Renovation Budget Template (2024)

FAQs

What is the 30% rule for renovations? ›

Home renovation is a huge undertaking, and almost invariably takes more time and costs more money than homeowners expect. Rasekh says it's a good idea to set 20 to 30 percent of the total cost of your project aside for the unexpected — that's up to 30 percent on top of the project's original cost estimate.

To get an approximate idea of what your remodeling budget should be, consider the value of your home as a whole. You don't want to spend more than 10 to 15 percent of your home's value on a single room. If you spend more, the value of the renovation will not proportionally add to the value of your home.

If you're looking for simple cosmetic update, a budget of $100k can potentially cover a complete exterior remodel. This may include landscaping improvements, upgrading siding, investing in new windows and doors, or even replacing your roof.

Full home renovation: $100—$400+ per square feet (psf)

Say you recently purchased your house for $450,000, and you're remodeling your kitchen. Your estimate from the contractor for the project is $50,000. To estimate your home value with improvements, a renovation value calculator will use this formula: Your estimated ARV would be: $450,000 + (70% x $50,000) = $485,000.

I wish I'd known that every task takes twice as long as you think, especially when you're self-renovating. I found that most of the time is spent on moving things out of the way, prepping the area and tidying, rather than on the task itself.

According to the National Association of Home Builders, remodeling companies have an average gross profit margin of 24.9% and a net margin of 4.7%. In addition, the report suggests that the average profit margin for home remodeling has declined and gone flat over the past few years.

Consider adding a family room, an additional bedroom, or even a home theatre to make the most of the space. Update your landscaping: A well-manicured lawn and beautiful landscaping can add curb appeal and value to your home. Consider planting some flowers, shrubs, and trees to enhance the look of your property.

What renovation adds the most value to a home? ›

Basic Budget Ranges

A mid-grade home renovation will cost an average of $40,000-$75,000.

Definitions. Technically, a renovation and remodel are defined differently. While a remodel changes the form of something (like adding a new shower to an existing bathroom), a renovation focuses more on restoring something old into good repair (fixing up a creaky floor, for example).

A popular standard for budgeting rent is to follow the 30% rule, where you spend a maximum of 30% of your monthly income before taxes (your gross income) on your rent. This has been a rule of thumb since 1981, when the government found that people who spent over 30% of their income on housing were "cost-burdened."

Compare your cost estimates and create a budget.

As a general rule of thumb, allocating around 10-15% of your total home value towards your renovation budget is a good idea.

Renovating a business or home is an expensive and time-consuming project that needs to be planned carefully. It is a good idea to get three renovation quotes from different providers before deciding which interior design firm and contractor to work with.

We recommend 3. By having at least 3 contractors, ideally from different sized companies, you're giving yourself enough scope to get an accurate idea of what is reasonable for your project.