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If you own a home, you should have homeowners insurance. (And in some cases, your mortgage lender may even require it.) That’s because this type of coverage can help you pay for losses and damage to your home and belongings if the unexpected occurs, such as a fire, wind, hail, or theft.

Homeowners insurance includes property and liability coverage. But it doesn’t cover every situation, so it’s important to read your policy’s fine print. Let’s dive in.

Property Coverage Explained

Most homeowners insurance policies include two categories of coverage: property coverage and liability coverage. Four types of property coverage include dwelling, other structures, personal property, and loss of use. Here’s a closer look at each.

Coverage A: Dwelling

Dwelling coverage covers your house structure. This includes things like walls, floors, roof, windows, attached garages, and attached porches. It also includes built-in components like furnaces or fireplaces.

Coverage B: Other Structures

Other stand-alone structures of your home, like sheds, detached garages, or fences, are also covered. If one of these structures is damaged from things like fire, snow, wind or hail, the insurance company would pay to repair it, minus your deductible.

Tip: Homeowners insurance involves a lot of terms, so check out a homeowners insurance glossary if you are confused.

Coverage C: Personal Property

Your personal property, which includes your personal belongings like furniture, clothes, art, jewelry, and sports equipment, is covered under homeowners insurance if items are stolen or destroyed by fire, hurricane, or other insured disasters. The coverage for personal property is generally 50 to 70 percent of the insurance you have on the structure of the house, according to the Insurance Information Institute.

Your homeowners insurance may even cover personal belongings that are stored outside of the home. However, there may be a limit for this coverage. Expensive personal items like art, jewelry, collectibles and other household items are often covered, but there is usually a dollar limit if they are stolen. Taking inventory of your belongings can help you determine how much insurance you need.

In most homeowners insurance policies, personal property coverage works differently than other types of coverage. A policy typically only covers personal property damage from disasters that are listed, instead of from any cause that isn’t excluded.

These disasters are called “perils” and may include an array of events or occurrences — from smoke, fire, and lightning to vandalism, theft, and damage from aircraft or vehicles. Ask your insurance company for a list of perils.

Coverage D: Loss of Use

Loss of use coverage helps pay temporary additional living expenses while your home is being repaired due to damage from a covered claim. Loss of use coverage could pay for things like hotel stays, food, or other expenses incurred in the event your home is deemed uninhabitable after a covered disaster. However, if your home is damaged from a disaster that is not covered under your homeowners insurance, like a flood, then your insurance won’t pay for loss of use.

Liability Coverage Explained

The other type of homeowners insurance coverage is liability coverage. Liability coverage includes personal liability and medical payments to others.

Coverage E: Personal Liability

Personal liability coverage helps if you or your family member are responsible for injuring someone else or damaging their property. This coverage also extends to damage done by your pets, like if your dog bites someone.

Personal liability coverage pays for the cost of defending you or your family member in court and for any damages a court rules that you must pay. Liability insurance doesn’t have a deductible like other types of coverage. And it won’t cover damages due to certain things, criminal acts, harm that is caused on purpose, or injuries or damage from a car accident.

Coverage F: Medical Payments to Others

Medical payments coverage pays if you cause physical harm to someone outside your home. For example, if someone receives a minor injury on your property, medical payments to others would cover the costs.

Typically, you will not receive coverage for exclusions like car accidents or intentional acts of harm.

What Does Homeowners Insurance Typically Not Cover

If you’re buying homeowners insurance, you’ll want to double-check what your policy will and will not cover. In many cases, you’ll get protection for damages due to fire, lightning, wind, and hail. But oftentimes, insurance companies won’t cover damages due to floods and earthquakes, wear and tear, maintenance issues, intentional acts, or war.

Flood and Earthquake Damage

Homeowners insurance does not cover damage due to floods or earthquakes, though you can purchase separate flood insurance or earthquake insurance.

If you live in an area that experiences floods, hurricanes, earthquakes or other natural disasters, you may want to look into additional homeowners insurance options. Be sure to do your research to find out what flood insurance covers when selecting policies.

Wear and Tear/Maintenance Issues

Damages or issues due to wear and tear, neglect, or not properly maintaining your home are not covered under most homeowners insurance policies. For example, homeowners insurance covers roof leaks if the leak is due to things like storms or a falling tree. But it generally won’t cover a roof leak due to typical wear and tear or lack of maintenance.

Certain Other Perils

Certain other perils, like intentional acts, nuclear hazard or government actions like war, are also not covered under typical homeowners insurance policies.

The Takeaway

If you own a home, homeowners insurance is important to have. But don’t assume that it will cover all damages. If your home is damaged from an event that’s not covered, such as a flood, earthquake, or war, you will likely have to pay for the repairs and other associated costs yourself (unless you have supplemental insurance).

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

FAQs

What are the main parts of a homeowners policy?

The main parts of a homeowners policy include dwelling, other structures, personal property, loss of use, personal liability, and medical payments to others.

Does home insurance cover other buildings on my property?

Home insurance covers other stand-alone structures of your property, like sheds, detached garages or fences. Attached garages are also covered.

How are my belongings covered differently from my house?

Personal belongings like furniture, clothes and art are covered under homeowners insurance if they are stolen or destroyed by disasters that are listed. Personal belongings that are stored outside of the home may also be covered, but there may be a limit. The coverage for personal property is generally 50 to 70 percent of the insurance you have on the structure of the house.

What liability protection does home insurance provide?

Homeowners insurance includes liability coverage for personal liability and medical payments to others. Personal liability coverage helps if you or your family member are responsible for injuring someone else or damaging their property. Medical payments coverage kicks in if you cause physical harm to someone outside your home.

Are natural disasters like floods or earthquakes covered?

Homeowners insurance often does not cover natural disasters like floods or earthquakes. If you live in an area that experiences floods, hurricanes, earthquakes or other natural disasters, you may want to look into additional homeowners insurance options.

Photo credit: iStock/Anchiy

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q225-039

Termites can be a homeowner’s nightmare because they can wreak havoc on your home. Consider this: Every year, the insects damage around 600,000 homes in the U.S., costing homeowners an estimated $5 billion in control and repair costs, according to Orkin.

And unfortunately, most homeowners’ insurance policies don’t cover termite damage or the cost to get rid of the bugs. This means if termites start chewing away at your home, you’ll likely be on the hook for the repairs and treatment.

When Homeowners Insurance Might Cover Termite Damage

As we mentioned, termite damage usually isn’t covered by homeowners insurance. However, in some rare cases, there may be exceptions — especially if the damage is caused by something your policy already covers, such as a fire.

For example, if termites chew through wiring and that leads to a fire, or if part of your home suddenly collapses because of hidden termite damage, your insurance might help pay for it. It’s a good idea to read your policy carefully so you know exactly what is (and isn’t) covered.

New to insurance? A homeowners insurance glossary can help you make sense of unfamiliar terms.

Why Homeowners Insurance Almost Always Excludes Termite Damage

Most home insurance policies don’t cover termite damage because insurance companies see it as something you can prevent. Termites usually work slowly over time, so it doesn’t count as an unexpected event.

One smart way to protect your home from potentially devastating damage is to schedule regular termite inspections.

Can You Get Termite Insurance?

Insurance providers typically don’t offer extra coverage options for termite damage. But there are still options.

Some certified pest control companies offer something called a termite bond or termite warranty. This type of service contract often includes an initial termite treatment, regular inspections, and, in some cases, will even cover the cost of repairs if termites cause damage. While costs can vary, most termite bonds range from $500 to $2,500.

You may want to think about getting a termite bond if:

•   You’re selling your home.

•   You recently found termites and are worried they’ll come back.

•   You live in an area where termites are common.

It’s worth noting that some home warranty plans might cover certain pest control services, like inspections. Check your plan details to see if termite coverage is included.

Recommended: Home Insurance Costs Explained

Preventing Termite Damage in Your Home

Here are some simple tips to make your home less inviting to these pests:

•   Get regular termite inspections. Consider scheduling yearly inspections if you live in a high-risk area, like someplace hot and humid. If you live in a place where termite infestations are less likely — such as cooler or drier regions — an inspection every two to three years may be enough.

•   Fix leaks. Termites love damp spaces. So, make sure to quickly repair leaky taps, toilets, and appliances. Also, check that water from AC units and hot water systems drains away from your home, and ventilate attics to reduce humidity.

•   Trim trees and bushes. Overgrown branches and plants can give termites a direct path to your home, so keep your yard and lawn nicely trimmed and maintained.

•   Keep porch and garden lights off when termites are active. Termites are attracted to lights. Turning off outdoor lights can help keep them away.

•   Seal cracks and cover crawl spaces. Use caulk to fill gaps in your home’s exterior and cover crawl spaces with plastic to block entry points.

•   Store firewood away from your house. Keep firewood and untreated wood off the ground and away from your home. Any wood you use for your home should be treated appropriately since termites thrive on untreated wood.

•   Keep water from pooling around your foundation. Make sure to fix drainage issues and regularly clean gutters and downspouts.

How to Spot Termite Damage

Termite damage can show up in all kinds of places, like ceilings, bathrooms, fireplaces, and walls. These pests eat wood from the inside out, which can cause moisture to build up. That can lead to warped floors and sticky doors.

Some early signs of termites include:

•   Flying or crawling termites inside your home

•   Mud tubes along walls or foundations (termites use these to travel safely)

•   Small piles of wings near windows or doors

•   Droppings that look like tiny pellets

•   Floors that feel soft, uneven, or saggy

•   Doors and windows that suddenly stick or won’t open easily

•   Paint that bubbles or peels, even if there’s no water leak

•   Wood that feels empty or thin when you tap it

What to Do If You Find Termite Damage

If you spot any of these signs of termite damage, the best thing to do is contact a pest professional right away. They’ll inspect your home to see if termites are still active and make sure there’s no ongoing risk of another infestation.

Once your home is in the clear, the expert can walk you through the damage and explain what needs to be repaired. They may also suggest treatment options and give you tips to help prevent termites from coming back.

You’ll want to make sure the infestation is fully taken care of before starting any repairs. Fixing the root of the problem first can help you avoid even more costly damage later on. Remember, since home insurance doesn’t cover termite damage, you’ll have to pay out of pocket for any repairs.

Recommended: Condo vs. Homeowners Insurance

The Takeaway

Does homeowners’ insurance cover termite damage? Unfortunately, many policies do not — and the cost of repairs and treatments can add up quickly. That’s why it’s important to help keep the pests out of your home in the first place. Scheduling regular inspections, controlling moisture, and staying up to date on basic home maintenance can all make a big difference. And if you live in a high-risk area, a termite bond might be worth exploring for extra protection.

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

FAQ

How much does termite treatment and repair typically cost?

The cost of termite treatment and repairs can vary depending on how bad the infestation is and the type of treatment needed. But on average, you can expect to pay around $1,000 for treatment and anywhere from $1,000 to $10,000 or higher for repairs.

Does insurance cover termite inspections or prevention plans?

Most home insurance policies won’t pay for termite damage. However, some pest control companies offer service plans — called termite bonds — that can help. These plans often include treatments, inspections, and sometimes even repair coverage. Remember that plan types and costs can vary, so it’s a good idea to look at your options and see if a termite bond is the right fit for your home.

Does homeowners insurance cover damage from other pests, like rodents or ants?

No, homeowners insurance usually doesn’t cover damage caused by pests like ants, mice, rats, or other critters.

What is a termite bond and how does it differ from insurance?

A termite bond, also known as a termite warranty, is a service plan from a certified pest control company that covers termite treatments and regular inspections. Sometimes, it may even help pay for repairs if termites cause damage after your home has been treated. Unlike homeowners insurance, it isn’t offered by your insurer and only covers termite damage.

Does renters’ or condo insurance typically cover termite damage?

Just like homeowners insurance, renters and condo insurance policies usually don’t cover termite damage. In most cases, you or your landlord would be responsible for the cost of treatment, removal, and any repairs caused by termites.

Photo credit: iStock/Aleksandar Pirgic

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q225-044

Whether you’re a first-time homebuyer or you’re thinking about putting your home on the market, it’s critical to know the value of the property. Property valuation also comes into play in home financing, property taxes, real estate investing, and home insurance. But who does the valuation, and how do they determine the value of a home?

The answers to both questions will depend on the situation. Read on to learn more about property valuations, including what they are and why they matter.

What Is a Property Valuation?

Broadly defined, a property valuation is a method of determining how much a property is worth for purposes of pricing it for sale, qualifying for a mortgage, or determining a property tax bill.

Someone selling their home, for example, may use a property valuation to determine how much their house is worth and how much they can charge on the open market.

If you are applying for a mortgage, the lender will typically have a home appraisal done to determine if the price you are paying for the house reflects its actual fair market value. Insurance companies and local tax authorities also do property valuations.

Typically, property valuations are done by an independent third party, such as a licensed appraiser. The lender, buyer, seller, tax authority, and insurer generally cannot have any relationship with the appraiser so that the valuation is unbiased.

The value of a property is determined by many factors, including its location, its size, the condition of the inside and outside of the building, and the current real estate market.

Types of Property Valuations

There are several different types of property valuations. Here are some of the most common you may encounter.

Appraised Value

When you are looking to qualify for a mortgage to buy a home, your lender will usually need to know the appraised value of the house you want to buy. The appraised value of a home is determined by a licensed appraiser who thoroughly evaluates the property’s size and features, market conditions, and comparable sales data. Typically, a lender will offer a loan for no more than 80% of the home’s appraised value (though some lenders and loan programs will allow you to borrow more).

💡 Quick Tip: When house hunting, don’t forget to lock in your mortgage loan rate so there are no surprises if your offer is accepted.

Assessed Value

The assessed value of your home is used in determining your property taxes. Depending on where you live, a municipal or county tax assessor will perform a property value assessment based on a number of factors, which may include sales of similar homes, square footage, current market conditions, and findings from a home inspection.

Local tax officials will use your home’s assessed value to calculate your property taxes. The higher your home’s tax-assessed value, generally the higher your property taxes will be. It is important to note that assessed values may not always accurately reflect the property’s market value, as they can vary depending on the jurisdiction’s assessment practices.

Recommended: Are Property Taxes Included in Your Mortgage Payments?

Fair Market Value

Fair market value of a property refers to the price at which the property would change hands in the open market between a willing buyer and a willing seller, with neither party under any pressure to buy or sell. Put another way, it’s the amount for which you could expect to buy or sell a property based on the current real estate market. This value is considered the most objective and widely used in real estate transactions.

Recommended: The Top Home Improvements to Increase Your Home’s Value

Actual Cash Value and Replacement Cost Value

Actual cash value and replacement cost value are methods used by home insurance companies to determine how they will pay out when you file a claim. Actual cash value takes into account depreciation and wear and tear when determining a property’s value. Replacement cost value estimates the cost of rebuilding or replacing a property with a similar one, considering current construction costs.

What If You Get a Low Appraisal?

If you’re buying a home and the lender’s appraised value is as much as the agreed-upon price or more, the lender will likely move forward with the home loan, assuming that the other aspects of the property and your application are in order.

If the appraisal comes in under the agreed-upon price, the lender may reduce the amount of the loan it’s willing to offer.

At that point, you or the sellers can dispute the appraisal with the lender or ask for a second look. If the value is still too low, there are a few different routes:

•  You can try to get the seller to reduce the price.

•  You can agree to contribute the difference in cash.

•  You and the seller may agree to split the difference.

If the purchase agreement contains an appraisal contingency, you are protected in the case of a low appraisal. This means that If you can’t get the seller to adjust the price or come up with the difference in cash, you can walk away from the sale and get your earnest money deposit returned to you.

Property Valuation Methods

There are different ways to assess the value of a property. Which method will be used will depend on the situation.

Sales Comparison Approach

The sales comparison approach determines a property’s value by comparing it to recently sold properties with similar characteristics in the same area, also known as “comps.” Appraisers make adjustments for differences in size, condition, and amenities to arrive at an estimated value. The sales comparison approach is the one most often used by real estate agents in determining the value of a property for sale.

Income Approach

The income approach is primarily used for investment properties that result in a stream of income, such as rental apartments or commercial buildings. It estimates the property’s value based on its income potential, taking into consideration factors such as expense statements, rental rates, vacancy rates, and market conditions.

Cost Approach

The cost approach evaluates a property’s value by estimating the cost required to rebuild or replace it on its current plot of land. This appraiser determines the replacement cost by considering the cost of materials and labor, then subtracts depreciation and adds in the value of the land to determine the property’s worth. This method is often used by insurance companies.

Automated valuation models (AVMs) are software programs that use data about other properties and sales combined with mathematical or statistical modeling to arrive at an estimate of the value of a property. There are commercial AVM providers, including Equifax®, as well as free AVMs available online, such as Zillow’s “Zestimate.”

Because AVMs are based on existing data, the property valuations they produce are only as good as the information available. An AVM may be inaccurate if the data is outdated or incorrect. While they can be speedy and convenient, at least for the time being, AVMs have not eliminated the need for appraisals or inspections.

The Takeaway

Understanding property valuations is essential for navigating any kind of real estate transaction, whether you are on the buying, selling, investing, or financing side of the deal. There are many different types of home valuations, including appraised value, assessed value, fair market value, actual cash value, and replacement cost value. There are also different ways of doing property valuations, such as the sales comparison approach, income approach, and cost approach. For a quick valuation, you can even use an online computer-generated valuation tool or AVM.

Whatever approach you take, a property valuation can help you confidently make informed decisions and negotiate effectively in the real estate market.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQs

How do you determine the value of a property?

The value of a property is typically determined by an independent licensed appraiser who considers factors such as the property’s location, size, condition, amenities, and recent comparable sales data in the area.

What are the 4 ways to value a property?

The four primary ways to value a property are: the market comparison approach, which compares the property to similar recently sold properties in the same area; the income approach, in which the value is estimated based on the property’s income potential; the cost approach, which involves evaluating the cost to replace or rebuild the property on the same land; and the appraised value, in which the value of the property is determined by a qualified appraiser through a comprehensive evaluation.

How does valuation work?

Valuation of a home typically involves having an appraiser inspect the property, analyze relevant data, and apply appropriate valuation methods (such as the market comparison approach or cost approach, for instance). Appraisers will generally assess factors such as location, condition, amenities, recent sales, and market trends to determine the property’s value. A comprehensive report is then prepared, detailing the value, data, and reasoning behind the valuation. Valuation serves as a crucial step in real estate transactions, providing objective estimates of property worth.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOHL-Q225-184

Is your bedroom cluttered, depressing, and lacking warmth and coziness? If so, perhaps it’s time for a bedroom remodel, an awakening of a room that can range from paint to structural changes.

If you’re a homeowner looking to spice up or calm down your bedroom, know that bedroom remodels can have a return on investment of 20% to 45%, according to Angi, the home improvement site, as of mid-2025.

The steps you can take to renovate rooms aren’t too onerous and can often be done without the help of a contractor or other professional. Let’s take a look at the cost to remodel a bedroom, bedroom remodel ideas, and how to pay for a bedroom remodel.

How Much Does It Cost to Remodel a Bedroom?

The typical bedroom costs $20,000 as of mid-2025, according to Angi. However, the amount of money you put into a bedroom remodel depends on what you’re trying to achieve. Do you simply want to change up your décor, including your bed, bedside tables, and desk? Or do you want to paint the room a different color and add some window treatments?

You may also be looking at more extensive changes, such as ripping up carpeting and putting in new flooring, installing new windows, or building custom cabinetry in your closet.

The good news is that most bedroom remodels are less costly than renovations that entail taking down walls, rewiring electrical systems, and installing pipes, though some bedroom remodels may call for these types of tasks.

With a bedroom remodel, you’re less likely to be doing major construction that requires hiring licensed professionals like a carpenter, plumber, or general contractor. And even if you have to rely on the services of a vendor, there are likely other aspects of the project you can tackle yourself.

Recommended: The Top Home Improvements to Increase Your Home’s Value

Simple Bedroom Remodel Ideas

Decluttering is a tried-and-true way to visually open up a room. That means organizing books and magazines, laundry or piles of clothes, and furniture. Here are some other ways.

Painting

What color will turn your current space into your dream bedroom? Some of the major brands and independent companies offer online color consultations. And then, if you feel up to the task, you can avoid hiring a painter by painting your walls yourself.

You’ll want to take stock of the current trim and match a color to it. You’ll also want to consider how the room changes color depending on the time of day. Sometimes a room that looks white in the evening can take on a yellowish tint during the light of day.

You’ll want to make sure you have all the equipment you need to get the work done efficiently and well. This includes paintbrushes, a paint roller and pan, rags, sandpaper, and drop cloths.

The great thing about paint is, if you feel you’ve done a poor job in spots, you can always paint over it.

Flooring

What you do with your floors is going to depend largely on personal taste. Your choices include wall-to-wall carpeting, wood or wood-engineered flooring with or without area rugs, and tile or ceramic flooring, which works best in humid climates.

You’ll want to think about how your flooring will complement the rest of the room, including furniture. You’ll also want to take your comfort into consideration. Carpeting, for example, muffles sound, while wood flooring does not.

Some people don’t like walking barefoot on anything besides carpet, for example, while others prefer the look of bare floors.

Cost may also come into play here as wood flooring is generally more expensive than carpeting, $6 to $25 per square foot. Carpeting typically runs $3.50 to $11 a square foot, HomeAdvisor notes.

Furnishings

While some homeowners may want to keep the bedroom furniture they’re currently using, others choose to sell or donate what they have and start over.

If you’re in the latter group, you’ll want to consider the paint and flooring you’ve chosen when looking for a new bed and headboard, bedside tables, desk, and dresser.

Looking online for bedroom remodel ideas can be a low-cost way to design your bedroom décor, with many blogs and websites linking to online retailers for easy purchase.

Social media sites like Houzz and Pinterest have scores of photos and boards delineated by room, color, and style to help you brainstorm.

If your budget allows, this might be an area to bring in the help of an interior designer. An interior designer may be able to see things you don’t, such as whether you need a large desk for working from home, a bench at the end of the bed for sitting, or a changing table if you plan to grow your family in the near future.

On a tight budget? Many people find cheap furniture online, at flea markets, and from freecycle resources. Refinishing it, painting it, or otherwise freshening it up can be a fun, affordable, hands-on way to update a bedroom.

More Extensive, and Expensive, Bedroom Remodels

While bedroom remodels are typically less wide-ranging than those of a kitchen or bathroom remodel, you may opt for larger changes that can drive up your cost.

These include altering the function and structural design of a room, which may require the use of a professional.

Structural Changes

If you own a home or are looking to buy a property, the lack of an ensuite bathroom might be a big deal. Maybe you’d like to be able to pad into the bathroom in the middle of the night without tiptoeing through the hallway.

Depending on the layout of the bedroom and the rooms near it, this may necessitate turning a closet into a bathroom or building a door through a wall that conjoins your bedroom with that hallway bathroom.

Either way, you’re probably looking at hiring a plumber, carpenter, electrician, and contractor. While this type of remodeling affords you more options than sticking with your current footprint, it comes with added costs to be aware of.

Lighting and Fans

Adding recessed lights requires the work of a licensed electrician, who may have to work around obstacles like heating ducts, and will charge for both installing and wiring each light.

Ceiling fans, while pretty and useful, will likely also require hiring a professional installer to burrow through your ceiling, connect to electricity, and complete the necessary patchwork afterward.

Recommended: Guide to Buying, Selling, and Updating Your Home

Paying for It

Creating a budget and payment plan is key, no matter the size of your bedroom remodel. Some changes are so small that homeowners can pay upfront.

Those with more extensive remodels might use a home equity loan or home improvement loan. These allow you to tap into the value of your home and use the funds to finance your bedroom remodel. They typically have comparatively low interest rates, since they are secured loans with your property as collateral, but obtaining them can take a little while.

Another option would be a home improvement loan. These are a kind of personal loan, which allows you to obtain a lump sum of cash and then pay it back over time with interest. This is usually a fixed-rate personal loan, and the term extends from one to seven years in most cases.

Recommended: Personal Loan Calculator

The Takeaway

A bedroom remodel currently costs $20,000 on average. This price reflects more than just a coat of paint and a new lighting fixture, so it is possible to do the job on a tighter budget and transform your space into a dream bedroom. It could also improve the value of your home. To pay for a bedroom renovation, you might use savings, consider tapping your home equity, or take out a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How much is the typical bedroom remodel?

The average bedroom remodel costs about $20,000 as of 2025, but it’s possible to spend much less or more, depending on the scope of your project.

How long does it take to renovate a bedroom?

Depending on the extent of the work you are doing, it could take a weekend, several weeks, or even months, if structural changes are part of the plan. It’s a highly individual process.

How can you finance a bedroom remodel?

To finance a bedroom remodel, you might dip into your savings, tap home equity, or take out a personal loan. Credit cards should typically be your last resort due to their high interest rates.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q225-086

Remodeling a closet can be a great way to get organized while getting rid of clutter. But creating an inviting, functional space involves more than just buying a few new sweater boxes.

When planning a closet model, you’ll want to keep a few things in mind, including what you intend on storing there, how much space you have, and your budget. Ready to roll up your sleeves? Use this guide to help you get started.

Clear Out the Closet

If you can, start a remodeling project with a blank slate. In this case, that means clearing out whatever is in your closet now. You’ll appreciate the extra breathing room when it comes time to measure the space (more on that in a minute). Plus, you’ll have a chance to see exactly what will be stored in the closet after the remodel, which will help you determine what clothing rods, drawers, storage bins, and containers might be needed.

Recommended: How Much Does It Cost to Remodel or Renovate a House?

Size Up Your Space

Accurately measure the size of the closet and, if desired, see what potential extra space exists. The following tools can help you get the job done:

•   Measuring tool: This can be a 25-foot flat tape measure or, if preferred and needed, an electronic measuring tool. The latter can measure longer walls.

•   Acrylic square finders (two): With these, verify whether closet corners are actually square.

•   Angle finders for closets with slanted ceilings: This allows the angle of the roofline to be properly measured.

•   Paper: Record all numbers; graph paper can be especially helpful when sketching out measurements and closet remodel ideas.

New to measuring? Here are some tips to help you get the right figures the first time.

•   When doing a hard measurement, round down by the nearest quarter of an inch.

•   When doing soft measurements, round down to the nearest whole number.

•   Measure walls in three places and use the smallest of these measurements: near the top, in the middle, near the bottom.

•   Measure from top to bottom.

•   Check inside corners.

•   Check the angle of pitch for any sloped ceilings.

•   Note and measure any obstacles, which can include light fixtures and switches, trim, and vents.

Consider Closet Features You’d Like

Not sure what to include in your closet remodel? Here are some ideas to get your creative juices flowing.

Bright Lighting

From LED lights that shine on specific areas of the closet (like the furthest corners) to illuminated rods and shelves to lights that focus on cabinets, lights are popular closet features.

A Dressing Room

Because not every house has bedrooms with enough square footage for dressing room space, some homeowners are choosing to transform an extra bedroom — or even an underused dining or living room — into a walk-in closet/dressing room.

These rooms typically have some kind of seating and mirrors, and even pieces of art. They can range from reasonably simple rooms containing a makeup table and comfy seat to luxurious spaces.

Walls That Wow

People who have a more straightforward paint color or wallpaper pattern in their rooms are sometimes willing to experiment with bolder hues or eye-catching patterns on the walls in their closets.

Stylish Extras

If your budget and lifestyle allow, here are some features that are in demand today and may be worth considering. Some are DIY, while others may require the help of a contractor.

•   Ventilation systems to remove smells and dehumidifiers to remove moisture

•   Entire walls devoted to shoes or handbags

•   Crown molding

•   A sliding ladder

•   Built-in drawers, called cellarets, to keep socks, ties, and more well organized

•   Laundry cabinet storage with a removable liner to carry the load to the washer

•   Jewelry organizer with multiple compartments, some with locks

Closet Remodel No-Nos

The best remodel is one that allows you to make the most of your closet. As you’re making your plans, be mindful to avoid the following:

Dead Space

People often waste space above the top shelf in their closets. It’s true that you can fold and store clothes on that shelf or use the space for storing boxes. But keep in mind that the higher an item is, the more difficult it is to access. It may be best used for out-of-season items vs. clothes you want to wear regularly.

Wasted Space Behind Swing-in Doors

If possible, try to avoid closet doors that swing in, because shelves can’t be built there and clothes hung there will continually be banged into. But if this is your setup, fear not. The space can still be salvaged by the addition of a hook board where scarves, ties, and other thin objects can be placed.

Shallow Shelving

When shelves are too shallow, clothes hang over top of them and the closet can look sloppy or fall from their designated spot. Lots of closet systems have 12-inch shelves; make sure this is deep enough for your needs or choose other shelving with more depth.

What Will a Closet Remodel Cost?

On average, a closet renovation costs around $2,300 to $6,700, with an average of $4,100, according to the home improvement website Angi. Other sources, like Thumbtack, put the price closer to an average of $771, so there’s obviously a range of costs possible.

A good rule of thumb is that the cost per linear foot is $125. Add-ons will affect the cost. Here are some amounts that someone might expect to spend:

•   Professional organization services: $40 to $60 an hour

•   New lights and outlets: $55 to $65 an hour

•   New door: $180

•   Paint job: $200

Designing a custom closet costs between $1,500 and $2,500 on average, according to HomeAdvisor.com. The materials used, organization elements included, permits, and whether a wardrobe is added affect the pricing. Of course, if you’re looking to sell a home, a custom closet design may be of more value to a buyer than an off-the-shelf closet organizing product.

Another factor is whether the closet is a reach-in or walk-in type. Reach-in closets are typically smaller, but when organized well can be functional. Remodeling these closets, which are often found in smaller bedrooms and hallways, may cost less than redoing a walk-in closet.

How to Afford a Closet Remodel

When it comes to paying for a closet remodel, homeowners have several options. Examples include using your personal savings, using a credit card and then paying the balance in full to avoid high interest charges, or taking out an unsecured personal loan.

When used for home renovation projects, these are typically called home improvement loans. They provide a lump sum of cash, which is then paid back (typically over a couple or several years) with interest in installments. The rates are usually considerably lower than those of credit cards.

Recommended: A Guide to Unsecured Personal Loans

The Takeaway

A closet remodel can cost hundreds or thousands of dollars, depending on how extensive it is, how luxurious the materials you choose are, and how much customized work is done. Plan exactly what you want — first deciding whether to expand the space or enhance what you have — and then carve out a budget for that vision. A home improvement loan, a kind of personal loan, can help you finance this type of project.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How much does a closet remodel cost?

A closet remodel typically costs a few thousand dollars, but for smaller spaces or less extensive renovations (primarily cosmetic), you may be able to get the job done for less than $1,000.

What is the rule of 3 for cleaning closets?

The rule of three says that if you can’t imagine wearing an item three different ways or to three different occasions, you should probably find it a new home, either giving it to a friend or relative, donating it, or selling it.

Is it worth it to remodel a closet?

Whether a closet remodel is worth it is a personal decision. Some people feel it’s definitely an improvement, making it easier and more enjoyable to get dressed and store their clothes. Others think it isn’t worthwhile to spend money on a small space, especially if it’s working fairly well as-is.

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