Home Improvement

Budgeting a Home Renovation

Have you come to the conclusion that it is time to renovate your home?  Maybe you have been inspired by all the shows on television or you have done a little research about real estate speculation and realize now is as good a time as any to make good on this investment.

Yes, home ownership is an investment: you either invest in the comfort and safety of your family or you invest in making more money down the road.  But making the decision to renovate is far easier than actually doing the work. After all, many projects can take several months to complete and that, of course, depends on the type of worok you want to do.

With that in mind, it can help to establish a budget. This will help you to determine which Renovco home renovation projects make the most sense.

COST-TO-BENEFIT RATIO

The first thing you need to look at when planning a home renovation is the cost-to-benefit ratio of each room.  Realtors across North America will tell you that the kitchen tends to be the smartest investment, with the average cost of a kitchen remodel project around $15,000 (in the United States), and an average return of 80 percent or more. Obviously, you can spend as little or as much as you want on the kitchen—or any other room, really—but knowing the numbers can really help you to decide the best place to put your money and effort.

BREAKING DOWN A BUDGET

Again, it cannot be stressed enough the importance of establishing a budget.  You need to know how much money you have, how much money you are willing to spend, and then how much money things will cost. And yes, you need to have both an idea of your total budget and your preferred budget; this is so important it bears repeating.

For home renovations, here is a breakdown of what you should expect to spend on various projects:

  • between 10 and 15 percent of your home’s value to remodel a kitchen
  • roughly 5 percent of your home’s value to remodel a bathroom
  • roughly 10 percent of your home’s value to upgrade a master bath suite
  • between 10 and 15 percent of your home’s value to finish an attic or a basement
  • between 1 and 3 percent of your home’s value on second and third bedrooms
  • between 2 and 5 percent of your home’s value on outdoor fixtures and other aesthetic elements