In fact, in the real estate world ‘renovation’ and ‘remodel’ can have different connotations that make a big difference when it comes to costs and property values. If you’re considering investing in a property to fix or flip, understanding these differences can be important in knowing what to look and plan for.
Here’s what you should know…
Renovations are Restoration
When it comes to defining the differences between renovations and remodels, the simplest way to understand renovations is as restoration work. This can include touchups and repainting as well as updating appliances and fixtures that are old and outdated.
The purpose of a renovation isn’t necessary aesthetic, though that is huge benefit. Renovations focus more on the durability and immediate value of the property and as a result are typically not as big of projects as remodels.
Home Advisor estimates the average cost of a whole home renovation is $15,000 to $200,000 depending on the quality of materials and size of the home. These are costs that are highly recoupable in resale value.
Remodels are Transformations
On the other hand, remodels are more structural. These large-scale projects focus on an overhaul of a property that makes some change to layout and usable square footage. Think of remodels as projects that involve getting below the surface of the home, like taking out walls to combine rooms or redoing a kitchen to install an island.
Remodels change the function of a space, and as a result can be a lot more time, work, and money. Remodels can also raise the value of a property and see returns on investment (ROI), depending on the room and the remodel. However, seeing a return is highly dependent on where you focus your efforts.
For example, Remodeling.hw.net estimates costs for garage door replacement are recouped at a 98.6% rate in the mountain region of the US, while a master suite addition may only recoup 48.5% of the price of the remodel.
The cost of a full home remodel typically varies between $33,000 and $150,000, according to Home Advisor.
Is a Renovation or a Remodel Right for You?
To determine which home-upgrade route you want to take, you want to examine your budget and goals for the property.
If you’re flipping a home and looking for quick updates that will bring up your resale value, renovation may be what you want to do. You can make simple, cost-effective upgrades that boost the property value without risking much of a loss.
If you’re truly invested in a property, looking to turn it into a dream home or have the budget for projects that will really change up your home experience, you may be more interested in a remodel. Remodeling allows you to truly mold the property to your desires and can potentially help you recoup your investment through durable upgrades that cut down on your maintenance costs down the line. Focus on rooms like bathrooms and kitchens that will give you higher returns on your resale value—should you decide to sell—and remodel for energy efficiency to save on heating and cooling costs.
Every property has different needs, and every property owner has a different budget. Renovate where needed and remodel when your property needs a big face-lift. Through careful planning, you can maximize the effectiveness of these upgrades to see returns on your investment and improve your home experience.