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When you're staring at outdated cabinets or that bathroom tile from 1987, the question isn't if you should remodel—it's how much it'll actually cost and whether you can make the numbers work without depleting your retirement fund.
Here's what most contractors won't tell you upfront. That $52,275 "average" renovation cost everyone quotes? It hides massive variation. Your neighbor might spend $8,000 freshening up a bathroom while you're looking at $140,000 to gut your 1970s split-level down to the studs. The gap between these numbers isn't random—it comes down to decisions about scope, materials, labor markets, and how you handle the inevitable surprises hiding behind those walls.
I've spent enough time reviewing project budgets to know that the homeowners who fare best aren't necessarily the ones with the biggest checkbooks. They're the ones who understand which renovations deliver value, when to compromise on finishes, and how to structure financing so they're not house-poor when the project wraps.
Let's break down what home remodeling actually costs in 2026, room by room and decision by decision. We'll look at the real numbers from national data, explain why certain projects return more value than others, and walk through financing strategies that keep your monthly budget intact while you transform your living space.
When industry reports cite that $52,275 average for whole-home renovations, they're measuring homes in the 1,250-1,600 square foot range. According to Angi's 2025 cost data, this figure masks a range that stretches from $19,500 to $88,400 for most homeowners—and that's before you factor in regional differences, material quality tiers, or the age of your home.
Think of it like this. A 1,500 square foot ranch in rural Tennessee might need $35,000 to modernize its kitchen and two bathrooms. That same square footage in coastal California? You're looking at $75,000-$90,000 for comparable work. Labor costs in San Francisco run 40-60% higher than national averages, and material delivery to remote job sites adds another 10-15% to your baseline.
Here's the breakdown by scope tier:
Low-End Cosmetic Updates ($3,000-$19,500): Fresh paint, updated lighting fixtures, new flooring in select rooms, landscaping refreshes. These projects don't touch major systems or move plumbing. You're working within existing footprints and choosing builder-grade materials. A $12,000 budget might cover new laminate flooring throughout the main living areas, interior repainting, and updated light fixtures.
Mid-Range Renovations ($40,000-$75,000): Complete kitchen refresh with stock cabinets and quartz countertops, bathroom updates with new fixtures and tile, hardwood floor installation, window replacements. According to This Old House analysis, this tier represents the sweet spot for ROI—you're making substantial improvements without pricing yourself above neighborhood comps.
High-End Transformations ($100,000-$190,000+): Custom cabinetry, premium appliances, structural changes like removing load-bearing walls, basement or attic conversions, foundation repairs, complete system overhauls (electrical, plumbing, HVAC). You're often working with architects and engineers here, not just contractors.
The age factor creates cost multipliers that catch first-time remodelers by surprise. Homes built before 1980 frequently need electrical panel upgrades ($1,400-$2,800) before you can add that new kitchen with multiple appliances. Plumbing from the 1960s might require complete replacement ($10,000-$30,000) once you open walls. According to the National Association of Home Builders, older homes average 15-25% higher total renovation costs than newer construction due to these hidden system needs.
Labor isn't just part of your remodeling budget—it's the majority of it. Industry data consistently shows labor consuming 50-60% of total project costs, and that percentage has been climbing. Robert Dietz, Chief Economist at the National Association of Home Builders, stated in late 2025: "Labor continues to be the single biggest driver of remodeling costs. Skilled trade shortages mean homeowners should expect higher baseline pricing, even for small projects like bathroom remodels."
Here's what you're actually paying for when you hire professionals:
General Contractors: $50-$150/hour. Most don't actually charge hourly—they take 10-20% of total project costs as their fee. For a $60,000 kitchen remodel, that's $6,000-$12,000 for project management, permit coordination, subcontractor scheduling, and quality oversight. According to Angi's 2025 contractor data, experienced GCs in metro markets command the higher end of this range.
Electricians: $50-$130/hour plus $75 call-out fee. A complete house rewire runs $10,000-$30,000. New electrical panel installation: $1,400-$2,800. Adding circuits for modern kitchen appliances: $400-$800 per circuit.
Plumbers: $45-$200/hour depending on complexity and market. Relocating plumbing for a new bathroom layout: $2,500-$7,000. Complete kitchen plumbing update: $1,500-$4,000.
Carpenters: $25-$70/hour. Custom cabinetry installation, trim work, structural framing modifications. The Bureau of Labor Statistics reports median carpenter wages at $21.69/hour, but experienced finish carpenters in competitive markets command $50-$70/hour.
The labor burden—payroll taxes, insurance, benefits—adds another 20-30% on top of base wages. When a lead carpenter earns $40/hour, the contractor's actual cost is $48-$52/hour once you factor in workers' comp, liability insurance, and employment taxes. This is why crew-based pricing often shows $144/hour for a three-person team even though individual wages seem lower.
Here's a worked example for a typical bathroom remodel: Three-person crew (lead, journeyman, apprentice) at $144/hour collective rate, working 40 hours over two weeks: $5,760 in labor. Add plumber for 8 hours relocating fixtures: $1,200-$1,600. Electrician for 6 hours updating wiring and adding GFCI outlets: $450-$780. Total labor: $7,410-$8,140 before materials. If your total bathroom budget is $15,000, labor just consumed 49-54% of it.
Kitchens represent the most expensive room to remodel, but they also deliver the most consistent returns when executed strategically. According to Cost vs. Value data from multiple sources in 2025, the ROI spread is dramatic based on project scope.
Minor Kitchen Updates ($14,550-$27,492): Cabinet refacing instead of replacement, new countertops (quartz or granite), updated appliances, new backsplash, improved lighting. ROI: 72-96%. A $25,000 investment typically adds $18,000-$24,000 to home value at resale.
What this actually buys you: Professional cabinet refacing runs $4,000-$9,000 depending on kitchen size—you keep existing boxes, just replace doors, drawer fronts, and hardware. Quartz countertops for a 200-square-foot kitchen: $3,000-$5,000 installed. Mid-range appliance package (refrigerator, range, dishwasher, microwave): $4,000-$8,000. Ceramic tile backsplash: $800-$1,500 installed. Under-cabinet LED lighting: $300-$600.
Mid-Range Kitchen Remodel ($30,000-$75,000): Stock cabinetry replacement, engineered stone countertops, energy-efficient appliances, new flooring, reconfigured layout (within existing footprint), updated plumbing and electrical. ROI: 50-60%. This tier represents diminishing returns—you're spending significantly more for moderately better ROI than minor updates.
The cost breakdown: Stock cabinets for 200-square-foot kitchen: $8,000-$15,000. Countertops (quartz/granite): $4,000-$7,000. Appliances (better quality, more features): $8,000-$15,000. Flooring (hardwood or luxury vinyl plank): $3,000-$6,000 for 200 square feet. Plumbing/electrical updates: $2,500-$5,000. Labor (design, demo, installation): $10,000-$20,000.
Major/High-End Kitchen Overhaul ($85,000-$150,000+): Custom cabinetry, luxury countertops (marble, exotic granite), professional-grade appliances, structural changes, expanded footprint, high-end finishes throughout. ROI: 38-50%. You're spending $85,000 to add $32,300-$42,500 in home value—justified only if you're staying long-term and prioritizing personal enjoyment over resale.
Industry expert Jim Cory, senior editor at Remodeling magazine, offers perspective: "If you take $20,000 and spend it judiciously on a kitchen, you can make it look a million times better. The design and product selection are key." The implication? Diminishing returns kick in hard once you exceed $40,000-$50,000 in kitchen spending.
Bathrooms deliver stronger ROI per square foot than almost any other room—they're just smaller, so absolute dollar returns stay modest. According to aggregated 2025 data from multiple sources, bathroom remodels recoup 60-74% of costs depending on scope.
Small Bathroom Refresh ($4,500-$8,500): Tub/shower resurface or tile update, new vanity and sink, updated fixtures (faucet, toilet), improved lighting, fresh paint. This works for 35-50 square foot bathrooms where plumbing stays in place.
Cost reality: New vanity with quartz top: $800-$2,000. Toilet replacement: $250-$600. Tub/shower tile surround: $1,500-$3,000. Updated fixtures (faucet, showerhead, lighting): $400-$800. Labor: $1,500-$2,100 (20-30 hours at $50-$70/hour).
Mid-Range Bathroom Remodel ($6,634-$28,000): Complete fixture replacement, new tile floor and shower surround, updated vanity and lighting, improved ventilation, keeping existing footprint. ROI: 60-74%. National studies show a $25,251 investment returning $18,613 at resale.
What's included: Porcelain tile for floor and shower: $2,500-$5,000 installed. Quality vanity with double sink: $1,200-$2,500. Upgraded toilet (comfort height, dual flush): $400-$900. Glass shower enclosure: $800-$1,600. Ventilation upgrade: $300-$600. Labor: $3,000-$6,000.
High-End Bathroom Transformation ($29,200+): Luxury fixtures, heated floors, custom cabinetry, expanded footprint, high-end tile work, spa features. ROI: Under 50%. This is where you're remodeling for personal enjoyment, not financial return.
Professional remodelers consistently report that buyers prioritize bathrooms that feel clean, spacious, and easy to maintain. Overly luxury features may look appealing but don't always translate into higher resale value. Walk-in showers have replaced whirlpool tubs as the must-have feature—most people don't have time for soaking tubs, so you're giving away square footage for something rarely used.
That national $52,275 average? It's meaningless if you're remodeling in San Francisco versus Boise. Regional differences can swing total costs by 40-60% for identical scope.
High-Cost Markets (West Coast, Northeast Metro Areas): California, New York, Boston, Seattle, Denver. Labor rates run $90-$150/hour for general contractors. Material costs 15-25% above national average due to regulations, permitting complexity, and delivery logistics. A kitchen remodel quoted at $35,000 nationally becomes $55,000-$65,000 in these markets.
Emily LaMarque, founder of Emily LaMarque Design Studio in Southern California, provides context: "If you are currently tackling a kitchen renovation, you should expect to budget a minimum of $75,000 to $100,000 for a small kitchen remodel. A medium kitchen renovation will usually start around $150,000, while a large kitchen can easily start at $200,000 and quickly scale upwards."
Moderate-Cost Markets (Midwest, Southeast, Mountain West): Chicago, Minneapolis, Detroit, Atlanta, Salt Lake City. Labor rates $60-$100/hour. Material costs near national average. Lauren Jennifer Tolles of Maison Birmingham in Southeast Michigan reports: "Smaller refreshes usually start around $30,000 to $50,000 when the layout stays the same. A medium renovation often falls between $50,000 to $150,000. A large or full custom remodel can start at $150,000."
Lower-Cost Markets (Rural areas, smaller metros): Labor rates $40-$70/hour. Material costs potentially 10-15% below national average if sourcing locally. However, limited contractor availability can increase prices through basic supply/demand dynamics.
Industry reports cite $15-$60 per square foot for whole-home renovations, with luxury projects reaching $150/square foot. But this metric hides crucial details about what's actually being renovated.
Basic Cosmetic Work: $15-$30/square foot. New paint, updated flooring, fixture replacement. A 1,500 square foot home: $22,500-$45,000.
Standard Full Renovation: $60-$100/square foot. New flooring throughout, kitchen and bathroom updates, system improvements, modern finishes. Same 1,500 square foot home: $90,000-$150,000.
High-End Complete Overhaul: $100-$150+/square foot. Custom everything, structural changes, luxury materials. That 1,500 square foot home: $150,000-$225,000+.
Here's why square footage metrics break down: A "whole-home" renovation rarely means every square foot gets equal attention. You're gutting the kitchen and bathrooms while giving bedrooms fresh paint and flooring. Basements and attics cost less per square foot than main living spaces because they lack the plumbing and electrical density of kitchens/baths.
Better approach: Calculate by room and system, then aggregate up. Kitchen (200 sq ft): $35,000. Two bathrooms (150 sq ft combined): $25,000. Flooring in living areas (800 sq ft): $8,000. Interior paint (1,500 sq ft): $5,000. Updated lighting throughout: $2,000. Electrical upgrades: $3,000. Total: $78,000 for targeted improvements to a 1,500 sq ft home—$52/square foot, but not because every foot received $52 of work.
The estimate your contractor provided? It likely doesn't include these expense categories that can add 20-40% to final costs:
Permits and Inspections ($500-$2,500): Structural changes, electrical/plumbing work, additions all require permits. Some municipalities charge 1% of total construction cost. Failing to pull required permits creates resale liability—buyers' lenders may refuse financing on unpermitted work.
Architectural and Engineering Fees: Removing load-bearing walls requires structural engineer approval: $1,000-$3,000. Full house plans from licensed architect: $5,000-$15,000 (10-20% of construction budget for major projects).
Mold and Asbestos Remediation: Discovered once walls open in older homes. Mold remediation averages $2,230. Asbestos removal: $1,200-$3,100. These aren't optional—you must address them before continuing work.
Foundation Repairs: If inspection reveals settling or cracks, you're looking at $2,200-$7,700 for basic repairs, potentially tens of thousands for extensive work. Lenders won't finance homes with significant foundation issues.
Temporary Housing: Major renovations lasting 3-6 months may require alternate living arrangements. Extended-stay hotels or short-term rentals: $2,000-$10,000/month.
The Contingency Buffer: Industry standard recommends budgeting an additional 10-20% beyond quoted estimates for unexpected discoveries. That $60,000 kitchen quote? Set aside $66,000-$72,000. The 2024 U.S. Houzz & Home Study found 39% of homeowners exceeded their renovation budget, and 24% never set a budget at all.
Return on investment varies dramatically by project type. According to multiple 2025 Cost vs. Value reports, here's what homeowners actually recoup:
Highest ROI Projects (80-100%+ returns):
- Garage door replacement: 100% (invest $4,500, add $4,500+ value)
- Steel entry door replacement: 88-194%
- Minor kitchen remodel: 72-96%
- Deck addition: 89-95%
- Bathroom remodel (mid-range): 60-74%
Moderate ROI Projects (50-70% returns):
- Major kitchen remodel: 50-60%
- Window replacement: 60-70%
- Siding replacement: 65-75%
- Roof replacement: 60-68%
Lower ROI Projects (under 50% returns):
- High-end bathroom: 49%
- Master suite addition: 48%
- Upscale primary suite: 35-45%
- Finished basement: 23-70% (massive range by market)
- Swimming pool: Highly variable, often neutral or negative in cooler climates
The pattern? Exterior improvements and mid-range interior updates deliver strongest returns. Ultra-luxury upgrades and major square-footage additions rarely recoup costs at resale.
Location dramatically affects these numbers. HomeLight's 2025 data shows West Coast projects recover costs 23% better than national average. A minor kitchen remodel in San Diego that costs $35,000 might add $38,000-$40,000 to home value (108-114% ROI), while the same $25,000 project in the Midwest adds $18,000-$20,000 (72-80% ROI).
Real estate agent Peter Clark, who works Portland-area homes, summarizes: "I can tell you the average ROI for updating or remodeling a home: you get back seventy-four cents for every dollar invested on average."
Strategy 1: Keep Existing Layouts. Moving plumbing and electrical adds $5,000-$15,000 to kitchen/bath projects. Design around current fixture locations whenever possible. That kitchen island you want? Great, but if it requires running water and drainage across 12 feet of concrete slab, you just added $3,500-$5,000.
Strategy 2: Reface Instead of Replace. Kitchen cabinet refacing costs $4,000-$9,000 versus $15,000-$30,000 for complete cabinet replacement. If existing boxes are structurally sound, new doors and drawer fronts transform the look for one-third the price.
Strategy 3: Strategic DIY for Lower-Skill Tasks. Paint yourself: Save $3,000-$5,000 on whole-house interior painting. Demo yourself (carefully): Save $1,500-$3,000. Install your own light fixtures: Save $800-$1,200. Leave electrical rough-in, plumbing, structural work, and finish carpentry to professionals.
Strategy 4: Prioritize High-Impact, Lower-Cost Updates. Fresh paint creates dramatic change for $500-$2,000 per room. Updated lighting fixtures: $100-$400 per room. New cabinet hardware: $200-$600 for entire kitchen. Luxury vinyl plank flooring looks like hardwood at half the cost: $3-$7/sq ft installed versus $8-$15/sq ft for real hardwood.
Strategy 5: Source Materials Directly When Possible. Floor model appliances save 20-40% versus showroom pricing. Tile outlet centers offer designer tile at fraction of retail. Shop cabinet liquidators for high-end cabinetry from canceled custom orders. But respect contractor relationships—many have negotiated trade discounts that beat consumer pricing.
Strategy 6: Time Projects Strategically. Contractors offer better rates during slow seasons (late fall, winter in most markets). Book projects 3-4 months out instead of rushing—premium pricing applies when you need work "started next week."
Most homeowners don't have $50,000-$75,000 sitting in savings. Here's how to fund renovations strategically:
Home Equity Loan: Borrow against accumulated home equity, receive lump sum, repay at fixed rate over 5-30 years. Best for: Homeowners with 20%+ equity who know exact project cost. Rates typically 2-3% above prime (currently 8.5-9.5% as of December 2025). Interest may be tax-deductible if used for "buy, build, or substantially improve" your home—consult tax professional.
Example: $60,000 home equity loan at 8.5% for 15 years = $589/month payment. Total interest paid: $46,020.
Home Equity Line of Credit (HELOC): Revolving credit line secured by home equity, draw as needed during 10-year draw period, then repay over 20 years. Best for: Projects with uncertain costs, phased renovations, homeowners comfortable with variable rates. Current rates: 9-11%.
Advantage over home equity loan: Only pay interest on amount actually drawn. Disadvantage: Variable rate means payment uncertainty if rates rise.
Cash-Out Refinance: Replace existing mortgage with larger loan, keep difference in cash. Best for: Homeowners with rate above 7% who can also lower their rate. If current rate is 6.5% and refi rates are 6.75%, the 0.25% rate increase might not justify refinancing just for renovation cash.
Example: Home worth $400,000, current mortgage $200,000. Cash-out refi for $260,000, receive $60,000 for renovations. But closing costs ($3,000-$8,000) reduce net proceeds to $52,000-$57,000.
FHA 203(k) Rehab Loan: Single loan covering purchase price plus renovation costs for buyers of fixer-uppers. Limited 203(k) allows $35,000 in improvements. Standard 203(k) for major work. Best for: Buyers purchasing homes needing significant renovation. Not available for existing homeowners.
Personal Loan for Home Improvement: Unsecured loan, no collateral required, typically $5,000-$50,000 at rates 9-16% depending on credit. Best for: Homeowners with limited equity, smaller projects, those avoiding home-secured debt. Terms usually 3-7 years—shorter than home equity loans, so higher monthly payments.
Example: $25,000 personal loan at 11% for 5 years = $544/month. Total interest: $7,640.
Savings/Pay Cash: Obviously best if possible—no interest, no loan fees. But consider opportunity cost: If invested savings earn 7-8% annually and home equity loan costs 8.5%, you're only paying 0.5-1.5% net after accounting for investment returns you're giving up.
SUMMARY: MAKING YOUR 2026 REMODELING BUDGET WORK
Home remodeling in 2026 costs more than most homeowners initially expect, but strategic planning separates projects that enhance both quality of life and property value from those that drain savings without proportional return.
The numbers don't lie: National averages around $52,000 hide massive variation driven by scope, materials, location, and labor rates. Labor consumes half your budget—sometimes more—which means contractor selection and project efficiency matter enormously. Kitchen and bathroom renovations deliver the most consistent returns, but only when executed at mid-range scale; ultra-luxury upgrades rarely recoup costs.
Successful remodeling requires three elements: Realistic budgeting (including that 10-20% contingency buffer for surprises), strategic scope selection (prioritizing high-ROI projects over personal luxury preferences if resale matters), and smart financing (matching loan products to equity position, timeline, and cash flow capacity).
The homeowners who finish renovations satisfied and financially stable aren't necessarily those who spent the most. They're the ones who understood their true costs before signing contracts, made conscious tradeoffs between wants and needs, and structured financing to support long-term financial health alongside improved living space.
Before you start tearing out cabinets, do the math. Know what you're paying for, why certain projects cost what they do, and which investments actually return value when you eventually sell. That preparation makes the difference between a renovation you're proud of and one you regret financing.
According to Angi's data, the average cost of a full renovation in 2025 for homes between 1,250 and 1,600 square feet was $52,275. The average homeowner, on the other hand, spends between $19,500 and $88,400. The size of your project, the materials you'll need, the age of your property, and where it is will all affect how much money you'll need to finish it.
You can expect to pay between $3,000 and $15,000 for cosmetic changes like new paint, carpets, and fixtures. It could cost between $40,000 and $75,000 to remodel the kitchen and bathroom with new, high-quality fixtures and fittings. If you add up the cost of custom cabinetry, structural changes, and high-end finishes, a full renovation could easily cost more than $190,000.
Local contractor rates have a big impact on the total cost because labor makes up half to two-thirds of all costs. The cost of living in the West Coast and Northeast metro areas is 40% to 60% higher than the national average. Older homes (built before 1980) often cost 15–25% more than newer homes because they have hidden problems that need to be fixed, like old electrical panels, plumbing that needs to be replaced, and foundation problems that show up when walls are opened.
In 2024, 39% of American homeowners went over their budgets, and 24% never made one. The information in this article comes from Houzz and Home Study. Experts say that a good rule of thumb is to add 10% to 20% to the total cost. If you have a $60,000 remodeling budget, you should expect to spend between $66,000 and $72,000.
Renovating the kitchen and bathroom is the best way to get a good return on investment (ROI), but ROI depends a lot on the size of the project. A lot of cost-benefit analyses for the year 2025 showed that small kitchen renovations (costing between $19,000 and $27,492) paid back 72% to 96% of their original cost, while big kitchen overhauls (costing $85,000 or more) only paid back 38% to 50%.
You might get back 60–74% of what you spent on a mid-range bathroom remodel. For example, if you put in $25,251, your home will be worth about $18,613 when you sell it. The percentages stay the same even if the total cost of a small bathroom upgrade is between $4,500 and $8,500. The return on investment (ROI) for high-end bathroom renovations that cost $29,200 or more is less than 50%.
This trend holds true for all types of projects: moderate investments do better than high-end ones. Replacing a garage door is the best way to get a good return on your investment (ROI). It costs $4,500 and is worth more than $4,500. Replacing a steel entry door can give you a return on your investment of 88% to 194%. Most of the time, adding to a deck will give you a return on investment of 89% to 95%.
When you add on to a master suite, you only get back 48% of the money you spent on building it. When you finish a basement, you get back 23% to 70%, depending on the market. Expanding large square footage is not a good business move. Pools don't always pay for themselves, but they might in places where they are common and the weather is warm.
Place is very important. HomeLight's 2025 numbers show that renovations on the West Coast bring in 23% more money than the average national renovation. A small kitchen redesign in San Diego could get back 108 to 114% of what it cost, but in the Midwest, it could get back 72 to 80%.
"You get back seventy-four cents for every dollar invested," says real estate agent Peter Clark. This 74% number can help you decide if a project is worth the money.
Labor costs, which make up half or more of most renovation budgets, have been going up steadily because there aren't enough qualified workers. Robert Dietz, the NAHB's chief economist, said that "labor is still the biggest factor in remodeling costs" near the end of 2025.
General contractors usually charge by the hour, with rates ranging from $50 to $150. They also often charge a percentage of the total project cost, which is usually between 10% and 20%. For a kitchen that costs $60,000, the estimated cost of project management, scheduling, and getting permits is between $6,000 and $12,000. In the greater metro area, general contractors with more experience usually charge more.
Electricians, plumbers, and carpenters charge between $50 and $130 per hour, plus $75 for call-outs. Electricians charge between $45 and $200 per hour, and carpenters charge between $25 and $70 per hour. But hourly rates don't include the full cost of labor, which includes payroll taxes, insurance, and benefits that raise base earnings by 20–30%.
If three people worked on a bathroom makeover for two weeks at $144 an hour, the total would be $5,760. That's a total of 40 hours of work. A plumber can move fixtures and update wiring for $1,200 to $1,600 for 8 hours, and an electrician can do the same for 6 hours. Without counting the cost of materials, the labor alone will cost between $7,410 and $8,140. The cost of labor is only 49% to 54% of the total cost of a $15,000 bathroom renovation.
It would cost between $10,000 and $30,000 to hire someone to rewire your whole house. Installing a new electrical panel could cost between $1,400 and $2,800. The cost of upgrading the plumbing in your kitchen could be anywhere from $1,500 to $4,000. These are required by law when remodeling older homes.
The best way to pay for the project will depend on your current mortgage rate, equity, and how long the project will take. If your current mortgage rate is less than 7%, home equity loans are a good idea. You keep that low rate even though you are currently borrowing money to make repairs at rates between 8.5% and 9.5%. Take out a loan for a set amount and pay it back over five to thirty years.
If you took out a home equity loan for $60,000 at 8.5% interest for 15 years, it would cost you $589 a month, or $46,020 in total. If you use the money from a home equity loan to make major repairs, the interest you pay on the loan may be tax deductible. Talk to an accountant or tax expert.
Cash-out refinancing might be a good choice for you if your current mortgage rate is higher than 7% and you can lower it at the same time. You should get a bigger loan to pay off your current mortgage. Use the extra money to make improvements to your home. The closing costs, which range from $3,000 to $8,000, lower the net revenues.
For instance, if you have a $400,000 home with a $200,000 mortgage and a 7.5% interest rate. If you refinance your loan for $260,000 at 6.75%, you could save 0.75 percentage points on your interest rate and get $60,000 to use for repairs. Even though the loan balance is higher, you might be able to make a lower monthly payment.
HELOCs (Home Equity Lines of Credit) are a good choice for projects where the costs aren't clear or will be done in stages. During the 10-year draw term, you'll have to pay interest on the money you take out, but don't take out more than you need. Right now, prices are between 9% and 11%. Cons: If rates go up, you might be shocked at how much you'll have to pay.
People who own homes but don't want to or don't have a lot of equity in them can get personal loans of $5,000 to $50,000 with interest rates between 9% and 16%. For terms of 3 to 7 years, the monthly payments will be higher than with home equity products, but you won't have to worry about losing your house.
An FHA 203(k) rehab loan can be a good choice if you want to buy a house that needs some work because it pays for the down payment and any repairs that need to be made. People who own homes can't get this.
Instead of trying to make everything cheaper, strategic cost reduction focuses on making changes that will have a big effect. Don't move the fixtures around; it will cost you $5,000 to $15,000 more to remodel your kitchen or bathroom. Make the design based on where the fixtures are right now. Does the kitchen island's water and drainage system have to go through the concrete slab? You just added $3,500 to $5,000.
Instead of replacing your kitchen cabinets, you can reface them. Refacing costs between $4,000 and $9,000, while replacing everything costs between $15,000 and $30,000. If the boxes are in good shape, you can get a whole new look for a third of the cost by just changing the doors and drawer fronts.
Do the easier things by yourself. If you paint it yourself, you could save $3,000 to $5,000. If you do a good job of getting rid of rust, you could save between $1,500 and $3,000. You could save $800 to $1,200 just by putting in your own lights. It's best to let the pros do the finish carpentry, plumbing, electrical rough-in, and structural work.
Start with the changes that will make the biggest difference for the least amount of money. Changing the paint in a room can change how it looks for between $500 and $2,000. New lights in each room could cost anywhere from $100 to $400. For a whole kitchen, new cabinet hardware could cost anywhere from $200 to $600. The cost to install luxury vinyl plank flooring is between $3 and $7 per square foot. ft., which is half the price of real wood ($8–15/sq. ft.).
Get supplies directly when it makes sense. Floor model appliances are 20% to 40% less expensive. Tile outlet stores sell designer tile for very low prices. Cabinet liquidators often have high-end cabinets that were canceled after being ordered. But be careful when you work with contractors; many of them get trade discounts that are better than what consumers pay.
Use your time wisely. In the winter and late fall, when business is slow in most places, contractors sometimes give discounts. Make plans at least three to four months in advance. Extra costs will come up for work that needs to be "started next week."
Experts in the field say that the 10–20% contingency buffer isn't just a guess; it takes into account real shocks that could happen when walls are opened. You should expect to pay an extra $6,000 to $12,000 on top of the $60,000 that was estimated for the renovation.
Permits and inspections for structural improvements, electrical and plumbing work, and expansions can cost anywhere from $500 to $2,500. Some cities charge 1% of the total building budget. If you don't have the right permissions, you could be liable for resale. Lenders can't lend money for illegal work.
When load-bearing walls are taken down, you have to pay for architectural and engineering work. Getting a structural engineer's approval will cost you between $1,000 and $3,000. A licensed architect can draw up full plans for a house for between $5,000 and $15,000. This is about 10% to 20% of the total budget for a big building project.
When walls are opened up in older homes, they often have mold and asbestos cleanup surfaces. The average cost of getting rid of mold is $2,230. The cost of getting rid of asbestos can be anywhere from $1,200 to $3,100. You need to take care of them before you can move on with the job.
During the remodeling inspections, problems with the foundation are found. Basic repairs can cost anywhere from $2,200 to $7,700, and more work could easily cost you tens of thousands of dollars. People who own homes with serious foundation problems won't be able to get loans.
Short-term rentals or extended-stay hotels could cost between $2,000 and $10,000 a month, depending on the details of the renovation project.
First-time remodelers are surprised by how much work it takes to upgrade systems in older homes. A new electrical panel could cost anywhere from $1,400 to $2,800. It will cost between $10,000 and $30,000 to replace all of the plumbing. High-draw appliances are a must-have for modern kitchens.
A Houzz survey from 2024 found that 39% of homeowners spent too much. Was it a guess worth $60,000? You can expect to spend between $66,000 and $72,000.
A three-bedroom home renovation could take anywhere from two to eight months, depending on how big the project is and when the contractor is available. It usually takes between one and two months to finish small cosmetic procedures. Getting permission for and checking a major structural renovation could add six to nine months to the project's timeline.
The timeframe is affected by the project's difficulty, the contractor's schedule, the delivery times for materials, the time it takes to get permits, bad weather, and unexpected discoveries that require more work. Experts say that when you plan, deal with unexpected problems, and make special orders, you should add an extra month to the timeline.
It could take four to eight weeks just to redesign the kitchen. It will take a few weeks to reface the cabinets and replace the countertops. It will take 8 to 12 weeks to fully remodel the area, which includes changing the layout. It usually takes two to four weeks to make changes to a bathroom and redesign it. A full renovation that includes moving tiles and fixtures takes about six to eight weeks.
Processing delays for permits can add two to six weeks to project timelines, depending on the city. Before moving on to the next step, every change to the structure, every electrical and plumbing job, and every addition must be looked at. It takes 8 to 12 weeks to make and ship custom cabinets after they are approved.
It's better to renovate in stages because it's less disruptive and more efficient. This year, the kitchen might be the first room to be worked on, and the bathrooms might be the next. They can stay in their homes, and the costs are spread out. If you open walls in stages, though, you might have to do demolition and restoration work more than once.
How quickly contractors can get to you depends a lot on how busy they are. During the busiest times of spring and summer, it's best to arrive three to four months before you want to. Most markets start faster in the winter (November to February) because contractors have less work to do.
If you need to make major changes that will take more than six months, you may need to find a temporary place to live. Adding short-term rentals or extended-stay hotels to the project budget could raise monthly costs by $2,000 to $10,000.
It is common for the value of a property to go up after major renovations, even though the time and amount of a property tax reassessment may be different in different areas. Tax rates go up after renovations are done because most counties do this every year.
The amount that taxes go up is based on the local mill rate and the change in the assessed value. If the home's value goes up by $50,000 because of renovations in an area with a 1.2% effective tax rate, the property tax will go up by $600 a year, or $50 a month. At a rate of 2.5%, the amount goes up by $1,250 each year.
We often rethink what we need when we remodel our kitchens and bathrooms to make them more useful. If the value of the home doesn't change much, small cosmetic changes like painting, changing fixtures, or flooring may not be necessary. If a property gets major renovations that change its basic features, like adding more bathrooms, finishing a basement, or increasing the total square footage, it needs a new assessment.
There are homestead exemptions that keep the yearly assessment from going up too much, even if improvements are made in some areas. You should first look into the laws in your area. Some people don't just look at the value of a property when deciding whether or not to invest.
When figuring out the ROI of a renovation, you need to think about property taxes. That $50,000 kitchen remodel that adds $40,000 to the value of the house? If it also raises property taxes by $600 a year, your net value gain will drop to $34,000. This means that you will have to pay $6,000 more in taxes over the next ten years.
Before you choose between mid-range and premium improvements, think about your tax situation very carefully. Very expensive renovations that are very different from what is normal in the area cause tax increases that don't match the real rise in resale value. Most of the time, mid-range renovations (70–80% ROI) have a higher return on investment (ROI) after taxes than luxury projects (40–50% ROI).
Some common home improvements don't make enough money to pay for themselves and might even scare away potential buyers. There are swimming pools, first and foremost. They cost a lot to keep up, raise insurance rates, and make it harder to find buyers. Families who are worried are worried about the safety of their young children. In warm places like Florida and Southern California, where pools are everywhere, they mostly make money.
It's not worth it to spend more on upgrades than what is normal in the area. Putting in a $100,000 chef's kitchen in a $300,000 area where similar houses sell for $320,000 to $340,000 would not be a good investment. Your asking price should be between 10 and 15% of the median price in the area.
People who buy homes expect garages to have parking and storage space, but turning them into living space takes that away. Most housing markets don't like houses without garages, so your home will be worth $20,000 to $40,000 less.
Personalization makes the improvement less marketable. If you have bold wallpaper patterns, strange color schemes, and rooms made for specific activities like indoor climbing walls and recording studios, home buyers might wonder how you can get rid of them. For the best resale value, stick to neutral colors that everyone likes.
Most of the time, additions to existing homes don't live up to their promises. The Cost vs. Value report for 2025 says that master suite expansions only make back 48% of what they cost. Depending on the market, the return on investment (ROI) for finished basements can be anywhere from 23% to 70%. People who live in colder places like them because they give them more room inside during the winter. People who live in warmer places like them more because they give them more room outside.
Floor-to-ceiling carpeting is no longer in style. Buyers like hardwood or high-quality vinyl board better. Carpet shows that maintenance has been neglected because it wears out, collects dust, and makes a mess. Make sure you spend your flooring money wisely on surfaces that will last.
Projects that aren't done aren't worth anything. Buyers and appraisers may be wary of bathrooms that have been partially renovated, basements that are still unfinished, and extensions that are still not finished. If you can't finish the work before you sell, don't start making improvements. They don't make you more valuable, they just make you more responsible.
The contractor you choose will decide if the work is done on time, within budget, and to the right quality standards.Get three written estimates from contractors you can trust. They should be licensed, insured, and have references you can call. Remember that you should never pay for a job all at once. Instead, people usually pay a 10% to 30% deposit, 30% when the drywall is done, 30% when the work is mostly done, and 10% when the finish is acceptable.
Make sure you're licensed by checking with the contractor boards in your state.Make sure the contractor has liability insurance and workers' compensation insurance that covers $1 to $2 million. These policies will keep you safe if a worker gets hurt on your property or if the contractor purposely damages your property.To get insurance certificates, you should call the insurance company, not the contractor.
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