What’s REALLY the cost of a renovation?
We all view cost differently. For some people, the emotional cost or the time cost are more important than the number of dollars and cents we spend.
But not in all things!
Really, if we had unlimited time and resources, we could study WHATEVER we needed and then never hire anyone for anything. We could all be master carpenters, car manufacturers, pilots, and so much more.
Most of the things we pay for, however, set such a high bar for the education and experience required that we NEVER think twice about hiring someone to do it.
For most people, renovating the home is one of the things that we hire someone to do instead of devoting years (and years) to learn how to do it. A real look into design and construction is enough to steer anyone straight to the professionals!
One of the first questions homeowners ask professionals, though, is: “how much will it cost?”
Maybe what you want will cost more than you realize to build out your dream renovation. Or maybe you’re willing to cut things to stay within a budget that simple won’t budge.
Let’s see how that looks in the real world…
How are renovation costs determined?
How much a renovation project costs will depend in large part on these two factors:
- The selections you make (appliances, finishes, materials)
- How much of the work you want your renovator to handle
When it comes to your selections, custom cabinets for a kitchen can easily cost $20,000. And if you’re in love with a certain countertop material or tile selection, those investments add up, too.
And don’t forget about that Sub-Zero refrigerator!
The point is that, before you know it, a kitchen renovation that someone hopefully imagines costing $30,000-$50,000 can actually cost twice that in selections alone. Which brings us to the second essential factor…project management and labor.
A large renovation will require the expertise of carpenters, electricians, masons, plumbers and many other trades specialists.
The easiest way to manage all the subcontractors and the schedule for their work (not to mention the schedule of material deliveries based on who needs what and when) is to work with a renovation firm that also provides project management.
For example, in our process at Signature Home Services, we have on-staff designers and an on-staff Production Manager so that we can handle every detail of each client project. From the dream through design to every last nail hammered and appliance installed, we take care of everything.
Cost vs. Time vs. Quality
If we all had our way, our dream renovations would be done “yesterday!” The time that a project takes is another factor that impacts cost, though, and rushing a project isn’t an option for everyone.
When a project needs to be finished fast, it will take more resources from the renovation firm. To allot more resources to your project, there will be an increase in cost.
The quality, too, is another opposing weight in the balance of cost. Obviously, lower quality work and selections will come at a lower investment…
To save even more, you could also sacrifice more of the quality in craftsmanship, or you could accept a longer timeline to get work done.
Conversely, if quality is more important to you, you have to move further away from that lower price point and explore a larger investment.
Where do YOU fall on this spectrum?
Cost vs. ROI vs. ROE
If everyone could afford it, the whole world would opt for the renovation experience where an experienced team manages every aspect of the project. Heaven!
The investment for that level of service, however, is an investment that some households feel unable to make.
This kind of cost-benefit look at renovation isn’t the only thing to juggle cost with, either. There’s also the return on investment (ROI) and the return on enjoyment (ROE, in other words our preferences) like that counter surface we love or that Sub-Zero fridge.
To have more of one, you need to sacrifice more and more of the others.
Where do YOU fall on this spectrum?
Remodel Magazine’s Cost vs. Value Report
Every year, a report is compiled by Remodel Magazine with the average costs of certain common renovations in each region of the United States. Those numbers are charted out along with the average return on investment when the house is sold.
We share the Cost vs. Value report on our website—see the numbers for yourself.
It’s surprising to many homeowners how most projects only recoup between 25% and 60% of their cost.
Our homes are like the cars we buy. We expect to get utility and enjoyment out of them between the time we buy and sell. Why, then, should homeowners expect high ROIs on projects which, at their core, are done to make the home more comfortable and livable for them while they’re there?
The Cost vs. Value report is an invaluable resource, which is why we send it to everyone we speak with. It’s even divided into superficial (or “face lift”) renovations and full gut jobs, and also denotes upscale renovation costs vs. more mid-range costs.
It does not, however, provide luxury renovation costs.
The investment associated with luxury finishes and selections is unsurprisingly higher than the Cost vs. Value report shows in “mid-range” or “upscale” renovations. The numbers in any renovation also vary based on where in the country the homeowner lives, because labor and material costs change by region.
When considering a budget for a big kitchen renovation (or even a larger bathroom remodel), start by calculating 17% of your home value. That typically gives you a more realistic idea what a luxury renovation might cost…
The cost-versus-value question is more nuanced than it first seems! The cost and benefit of a home renovation will depend on what kinds of selections you want and how much you want your renovation firm to guide you through the process.
It will also depend on where you live.
It will also depend on whether you plan to stay in your home for at least three years, or are preparing to sell your home.
These factors are a LOT to piece together, which is why we provide in-depth consultation to homeowners who connect with us. Over our process, we determine what your priorities are, what your wants are, and what your needs are. We provide a look at your budget and discuss how many of your “must-have” boxes can be checked for that investment.
Curious to find all that out for yourself? Start a conversation with us today…