How Much Should You Spend Remodeling A House For Max Profit?

$15 $60 Per square foot $19,800 $73,200 Average whole house remodel

Completely remodeling a 3-bedroom house costs $20,000 to $100,000 or between $15 to $60 per square foot on average. Remodeling a kitchen costs $25,000 on average, and a bathroom renovation runs $10,000. A total gut to the studs and remodel costs $100,000 to $200,000.

Get free estimates from home remodelers near you, or view our cost guide below.

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Not All Rooms Are Created Equal

If you include the kitchen, living room, and laundry room, the house has a total of eight rooms. The value of each room is therefore around $62,500 ($500,000 building value divided by 8 rooms). You can consider $62,500 as the max you would ever spend doing anything to a room.

But of course, not all rooms are considered equal. Even though a master bedroom is very valuable, it’s not as expensive to construct as your typical kitchen due to the lack of plumbing, complicated electrical wiring, and installation of appliances.

Further, not all rooms are the same size as well. Therefore, you’ve got to therefore make a judgement call on the value of each room based on its size, amenities, and importance to you. When remodeling a house for maximum profits, you must focus on the highest value rooms first.

If you have any budget left, then you can remodel the lower-value rooms. Please note that creating more outdoor space since the pandemic began is huge. Therefore, to the extent that you can create more decks off of living areas, the better.

Interior After

 What I Spent: About $25,000  What I Got: All new

  • What I Spent: About $25,000
  • What I Got: All new plumbing, electrical and HVAC systems for the house. New drywall in places and refinishing of the home’s original hardwood floors. New light fixtures for the home (and a few I got for free through a sponsored partnership with  Supply.com).
  • Money Spent Since 2013: $1,800 on a brand-new set of stairs up to the attic.

Shop the room: Progress Lighting Chandelier (c/o Supply.com), living room light fixture (similar here). Paint: Benjamin Moore – November Rain. All furniture is either a hand-me-down or a secondhand thrift store find.

Here’s a quick overview of the difference between the two

A home equity loan is a second mortgage (loan) against your home. The money comes in one lump sum, and you pay it back every month.

A home equity line of credit is an amount you can borrow against the equity in your home. It isn’t paid as a lump sum. Instead, you can borrow amounts over a specified period of time (usually 10 years) and then pay it back over another term (the next 10-20 years after you take out the money, for example).

Pro Tip: You can tap into your home’s equity better and faster with FigureHomeEquity. It just takes five minutes to apply and five days to fund.

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8 Home Renovation And Remodeling Trends For 2022 Refinancing – 7-minute read Sam Hawrylack – May 23, 2022 Are you looking to make updates to your home this year? Take a look at some of the most popular 2022 home renovation and remodeling trends and get inspired! Read More

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Cost to remodel other buildings

Building refurbishment costs $25 per square foot to remodel multiple rooms in a house or apartment, and between $100 and $250 per square foot for completely gutting a building and making structural changes.

Apartment renovation cost

Apartment renovation costs $25 to $60 per square foot on average or up to $200 in large cities like New York. Renovating a 1-bedroom apartment costs $18,000 to $45,000, depending on the location and whether it’s major structural changes or minor alterations.

 Apartment renovation cost   Size Average cost

Apartment renovation cost
Size Average cost
Studio apartment $10,000 – $30,000
1 bedroom apartment $18,000 – $45,000
2 bedroom apartment $25,000 – $60,000

Mobile home remodel cost

Completely remodeling a mobile home costs $10,000 to $30,000, depending on if it’s a single wide or double wide. Individual projects cost $2,000 to $5,000 each, such as kitchen remodeling or roof replacement.

Mobile home remodel cost
Project Average cost
Replacing windows $2,500 – $5,000
Roof replacement $2,100 – $4,700
Kitchen remodel $3,000 – $5,000
Bathroom remodel $2,000 – $8,000
Replacing HVAC $1,800 – $2,500
Painting $1,200 – $2,400
Rewiring electrical $1,600 – $3,800
Plumbing $2,000 – $4,000

Cost of renovating a 100-year-old house

The average cost of renovating a 100-year-old home is $100,000 to $250,000 or between $100 and $200 per square foot. Prices depend on it’s historical value and the electrical, plumbing and HVAC updates needed to meet code requirements. Heritage landmark buildings cost up to $400 per square foot to remodel.

Old house renovation price list
Renovation Average cost
Replace windows $4,500 – $20,000
Electrical work $3,500 – $8,000
Electrical panel replacement $800 – $2,000
Replace plumbing $2,000 – $15,000
New foundation costs $20,000 – $40,000
Install central air conditioning $660 – $4,600
Foundation repair costs $2,318 – $6,750
Insulate walls $874 – $2,926
Install furnace $2,150 – $5,900
Install HVAC (includes AC, furnace) $4,820 – $9,350

Old homes often have hidden problems, such as lead paint, asbestos, rotting wood, or outdated plaster, which are more labor-intensive. Contractors often end up gutting all the walls, repairing the foundation and structural damages, and replacing the subflooring.

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Ways to Save Money on Home Renovation

While you can’t control the supply chain, you can find ways to save money on your home renovation. Karp recommends working with people who will share costs with you upfront. 

“I think the number one thing is to have the right team, a team that you trust,” she says. “As much as possible, homeowners should try to get an idea of the cost of the project, meaning architectural fees, compliance fees, and build costs at the schematic design, development, and construction stage.”

Allow space in your timeline for unexpected delays, Weiss says.  

“Make a sort of renovation calendar that has enough space for any sort of interruptions,” she says. “Even [prepare for] things like your contractors have to be out because they may have been exposed to COVID. There’s nothing worse than expecting a renovation to be done months and months before it’s actually done, so make sure you can dedicate ample time to the project to account for the hiccups you may face.”

Finally, Lavinder reminds homeowners to solidify their renovation plans before they get started. 

“People may have a plan for the remodel, but then they change their mind in the middle,” he says. “That has a ripple effect that affects all these different costs. Going into a project and sticking with it and not changing your mind is one of the most important parts of doing a successful remodel.”

Tips for Saving on Home Remodeling Costs

If you’d like to save on home remodeling costs, you can always do more of the work yourself. Just be forewarned, if you do the job wrong, you could experience more costly repairs in the future.

Further, if you are doing your home remodel with a city permit, you may not pass inspection if you don’t really know what you’re doing. The electrical inspection is the hardest to pass. But building and plumbing inspection isn’t a cake walk either.

Here are some ways you can save on home remodeling costs:

  • DIY demolition: You don’t need to be an expert to pound a hammer into the wall and remove all the debris.
  • Order and pick up all the finishes: Instead of having the contractor charge you an hourly fee to order and pick up all the finishes, do it yourself. After all, it’s up to you to decide what you like. The contractor is focused on the rough finishes.
  • DIY painting. Painting is one of the easiest things all of us can do to save on home remodeling costs. I slowly painted all my bedrooms in the last house I bought while the subcontractors were remodeling the bathrooms and kitchen. Painting is also very relaxing, especially if you put on some music or listen to a podcast.
  • Buy used. If you are really frugal, you can buy slightly used appliances for less.
  • Skip getting a permit. If you are doing big structural and electrical work, I highly recommend getting a permit. The permit gets inspectors to come out and expect that your project is done correct at every stage. However, a permit also costs money and increases your property tax bill. Your increased property tax bill will equal the cost of your remodel times a percentage. And property tax bills last forever.

These five things are a low-risk way to save on home remodeling costs. I really wouldn’t do the plumbing, building, and electrical by yourself. You want to pass the multiple stages of inspection on the first try. Once you fail one stage, it may take a week or months to pass again.

How much does it cost to create an open floorplan?

(Image credit: Kirsty Noble)

One of the most popular alterations to an old home is to open up the downstairs living space to create an open floor plan.

Again, the exact cost of removing walls will depend on your home, and things like:

  • Whether or not the wall is load bearing
  • If there’s plumbing and electricity in the wall
  • Whether or not you’ll need to repair or refinish floors where the wall once stood. 
  • If your home is one or two stories.

Whether or not the wall is load bearing will make the biggest impact on your budget. For non-load bearing walls, expect costs to range from $400-$1,500 to take out a wall. To remove a load-bearing wall and install a support beam, costs range from $3,000 – $10,000+. Prices tend to be on the higher side of that range for two-story homes.

(Image credit: Brent Darby)

3. Get multiple quotes

One of the best ways to make sure you’re getting a fair price on materials and labor costs for your renovation is to get quotes from multiple service providers. That way, you’ll get a true idea of the going rate for your job.

While it can be tempting to choose the design firm, plumber or contractor who comes in with the lowest bid, this cost-saving strategy can backfire if the project is poorly managed or work isn’t done properly. It’s important to make sure you’re balancing the constraints of your budget with quality work, and that a low price isn’t an indication of a lack of experience or expertise.  

The best way to make sure you’ve got trustworthy tradespeople? Research their background beforehand. Find out about their professional certifications, credentials, and local association memberships through organizations like the National Association of the Remodeling Industry, the National Association of Home Builders, or the National Kitchen and Bath Association. It’s also a good idea read reviews on sites like Houzz or Facebook, and always be sure to ask for (and check!) references. Paying a little bit more up front for quality, reliable contractors is always worthwhile. 

Is it Cheaper to Remodel or Build a New House?

“Most clients don’t want to hear those words,” says Paul Irwin, design director with Landis Construction, in the Washington, D.C., area, “but it really needs to be considered on major remodels. “In one case, for example, plans for a 1,300-square-foot addition revealed that the house’s existing foundation wasn’t up to code and would have to be replaced—a $30,000 proposition.

After crunching the numbers, the owners concluded that it would cost as much to update the house, a former summer cottage, as it would to reproduce it new. “For a relatively small additional cost,” says the owner, “we get all the benefits of new construction while preserving the character and feel of our old house.”

  • Cost to remodel: $570,000
  • Cost to replicate: $588,000
  • Saved: For $18,000, the owners gained as much as $60,000 worth of new living space, plus improved safety and energy efficiency.

Additional Costs and Considerations

A home renovation project can be complex or straightforward, and sometimes it can turn into a full-blown house remodeling adventure. It’s not uncommon for unexpected costs to pop up while planning a renovation. You may need to hire an architect to assist with planning a structural adjustment, or you could discover a problem with the foundation that must be addressed. Here are several other considerations for home renovation costs to help guide your planning process.

Home renovations need an expert hand Get free, no-commitment project estimates from contractors, builders, painters, and more near you. Find a Pro ++

Home Age

It’s no secret that older homes tend to hide structural or mechanical issues that must be addressed when they’re discovered. An old house might have great bones, but updating electrical wiring to current safety standards is a good (and sometimes necessary) idea that could save you money in the long run. Add approximately 20 percent to your total budget for unforeseen costs.

Structural Changes

If structural changes are planned, consult with an engineer to ensure load-bearing walls are appropriately handled. Expect to pay $300 to $700 for a consultation and plan review. On average, removing walls will cost between $300 and $10,000. Non-load-bearing walls cost less to remove.

Hiring an Architect

You might find the planning process much easier for more complex renovation projects if you hire an architect early on. Your ideas can come to life with the help of an architect who can recommend current trends, upgrades, structural needs, and more. An architect is also helpful as a cost estimator who can determine a rough estimate on expected costs. Architects usually charge between $125 and $250 per hour.

Electrical, Plumbing, and HVAC Systems

Some renovation projects begin with an intention to upgrade mechanical systems for better efficiency or reliability. Updating plumbing, wiring, and HVAC systems improve home value in the long run. A typical plumbing job costs $300, electrical work costs $350, and installing a new HVAC system runs between $500 and $7,200.

Foundation

“Foundation problems” is likely the most dreaded phrase to hear during any home construction project. Any issues with a foundation will push the renovation costs to the high end of the estimate, which is why a budget cushion is helpful. If major foundation problems exist—along with roof and mechanical issues—it’s sometimes cheaper to demolish and rebuild. Consult with your contractor to determine the best solution for you.

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Changing the Floor Plan of the Home

The cost to adjust the floor plan can range from between $750 and $3,000 and up. Since floor plans affect the foundation and structural components, you’ll need to consult a structural engineer. Additions usually require a building permit from your city, and some cities may require an architect, too. A floor plan change will require an update to nearly every system from wiring to HVAC and finishing work to make it suitable.

Appliances

Upgrading appliances is another common reason to begin a home renovation. New appliances can cost between $200 and $10,000. An array of options are available, and it’s easy to get carried away, especially with kitchen appliances. From six-burner stoves to smart fridges, consider what meets your needs and expectations to stay within your budget.

Photo: istockphoto.com

Home Renovation Costs: DIY vs. Hiring a Professional

A plethora of home improvement shows have convinced many homeowners that home renovation is a reasonably straightforward operation that any reasonable person could complete. In some cases, that’s true. Not every renovation includes major structural work. If the renovation is more cosmetic, you might be comfortable painting, installing a medicine cabinet, putting up a kitchen backsplash, or replacing a faucet. These projects don’t require permitting or structural considerations, and they can usually be done in a short time frame.

Sadly, up to 63 percent of DIYers regret large renovation projects that took excessive time to complete or were done improperly due to lack of knowledge. Any renovation that includes changes to floor plans, structures, or mechanical systems will likely require a building permit from local authorities. In many states, significant renovations that touch structures, roofs, electrical or gas, or foundations require a contractor’s oversight to ensure all building codes are followed. Home additions can be nearly as complex as building a home.

Beyond legal restrictions regarding DIY renovations, the biggest reason you’ll want to hire a pro is peace of mind. An architect and contractor have the know-how to bring your dream to life. You won’t have to stress about scheduling multiple subcontractors, organizing deliveries, or solving problems. A contractor should have warranties against future issues as well. Contractors can also identify ways to save money by sourcing materials through wholesale dealers or offering alternate suggestions. Home renovation costs are well invested in a qualified contractor.

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Photo: istockphoto.com

What you need to know about home renovations

Using our home renovation estimation sheet, you can start getting a better idea of what costs are associated with the work that house needs.

Armed with that knowledge, you can make informed decisions on what parts of your home need to be prioritized first, what it would cost if you did it yourself, and what it would cost if you hired labor to handle it for you.

Some really valuable information to add to that is identifying what modifications or upgrades to your home are going to bring it the most value.

With the property, the estimate was above the $30k mark, and we needed to rein that in to get it within a range that made the numbers work for us.

In general, with almost any project, the total cost of materials and labor are going to vary. But there is a rule of thumb for homeowners and that is to give a buffer that is higher than your original estimate, so for any estimate you get, you want to create a buffer up to 25-50% on top.

For some homeowners, this miscalculation means the project goes way over budget and they’re unable to complete it, leaving the home in a state that’s worth even less than before the project began.

If your budget is too tight and there is a lot to be done, you might be better off not going down the route of renovating the house yourself.

In 99% of cases, there are surprises with either the estimate being off or some issue revealing itself that wasn’t included in the original estimate.

These surprises can make the entire job not only more costly but take longer than expected.

Sometimes much longer.

So, what did $30k accomplish for our property?

Cost To Renovate A Kitchen

Kitchens are traditionally one of the first rooms homeowners remodel and doing so costs $23,000 – $135,000. When buyers look at homes that are for sale, a modern kitchen is what often encourages them to make an offer. With budgets below $4,000, homeowners avoid making upgrades to countertops, cabinets and appliances in the kitchen2.

High-end average cost: $149,079

Additional home value: $80,284

Return on investment: 54%

Mid-range average cost: $75,571

Additional Home Value: $43,364

Return on Investment: 57%

Low-end average cost: $26,214

Additional home value: $18,927

Return on investment: 72%

Return On Investment For Top Renovations

When embarking on any major remodeling project in your house its important to think about the prospective return on investment.

Some remodels are done right before the sale of the house in order to boost its value, while others are done for personal enjoyment with the goal of adding long terms value to the home.

Here are the National Average ROI figures for the most popular remodeling projects.

Project Type Remodel Cost Average ROI Your Return
Minor kitchen remodel $21,198 81.10% $17,191
Mid-range full kitchen remodel $63,829 59% $37,637
High-end full kitchen remodel $125,721 53.50% $67,212
Mid-range full bathroom remodel $19,134 70.10% $13,422
High-end full bathroom remodel $61,662 56.20% $34,644
Interior Painting $3,185 107.00% $3,408
Floor replacement (hardwood) $18,500 75.00% $13,875
Finishing the attic (with bathroom) $47,240 62.00% $29,289
Finishing the basement (with bathroom) $56,850 73.00% $41,501
Window Replacement (wood) $19,391 69.50% $27,901
Window Replacement (vinyl) $15,995 74.30% $11,884

Keep in mind that the actual return on investment on any remodel will largely depend on local real estate market trends as well as the level of renovation you are doing.

If you are not sure whether a specific remodel is a smart investment, its best to contact a local experienced real estate agent for advice.

How Much Should I Spend on a Home Renovation?

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.

For example, if your home is worth $100,000, the maximum you should spend on a kitchen or bathroom renovation is $15,000. If your house is worth more, the spend on a renovation could be higher.

“Most of the time, it’s really hard for a homeowner to know where to start. I recommend bringing in a design build contractor early on in the process. In their initial consultation they can talk about your needs and priorities and help guide you through a project that is realistic for your budget.”

Danny Niemela | ArDan LLC

Determine Financing Before Finalizing Your Budget

Before setting the budget for your home renovation, you need to determine how you are financing it. If you are paying in cash, taking out a loan or applying for credit, the budget of your renovation will need to fit within the limit of your available funds.

Once you know how much you can afford to spend, set aside 10 to 20 percent of your available funds for unexpected expenses. This is important. Something will go wrong or cost more than originally projected. By setting aside a percentage before beginning, you know you will have the funds available to finish your project no matter what happens.

“I recommend setting aside between 10 to 20 percent for a cushion. If you hire the right contractor to do some exploratory demolition or investigative work early on there should be very little unforeseen work that needs to happen. However, in our experience once a project starts many of our clients pull out the ‘While you are here, can you also do…’ list and if client has the money set aside, we can easily accommodate it in duration of the project.”

Danny Niemela | ArDan LLC

Once you’ve decided how much to spend, use the following steps to create a detailed plan and budget.

Where to Start?

If you don’t have a wad of cash to makeover your house from top to bottom, focus on the renovations that add the most value to your property. Home renovations that generate the highest return on investment are kitchens, bathrooms, interior/exterior painting, decluttering, and updating décor.

“On the real estate market, those equal dollars,” says Salter. “It’s the first thing people see and want. It’s going to make your house more valuable and more appealing.”

One caveat: Watch out for “over-improving.” Depending on the real estate market and area, adding unnecessary, over-the-top finishes or creating unique features may not fetch the best financial return. For instance, dropping $65,000 to upgrade your basement when homes in your neighbourhood sell for $200,000 isn’t a wise choice. Adding a pool or wine cellar might actually turn off some buyers. When planning a project, research what houses are currently selling for in your neighbourhood and tailor your budget and expectations accordingly.

*The percentage of your cost that you may recover when you sell your home Data source: The Globe & Mail and Ontario Securities Commission

ROI aside, always prioritize pressing “911” projects first. For instance, tackle the leaky roof, crumbling brick, or dying furnace ASAP before moving on to renovations that have aesthetic value. Can’t afford a major home renovation? Luckily, there are plenty of budget-friendly alternatives that can boost your home’s appeal without costing a fortune.

“The easiest things are to paint, change your kitchen backsplash, or paint the kitchen cupboards,” says Salter. “Put in some pot lights and add storage with build-ins to give a new look and function for the space. Even simple things like adding drapery or decorative elements can change your space.”

Houses we’ve recently purchased for cash

Houston, TexasHouston, Texas

Bought for cash to help the owners facing foreclosure and flood damaged.

Cleveland, OhioCleveland, Ohio

Bought for cash from tired landlords, with extensive tenant damage.

Memphis, TennesseeMemphis, Tennessee

Bought for cash from tired landlords, with extensive tenant damage.

Phoenix, ArizonaBought for cash from an owner dealing with death in the family.

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