If you’re a homeowner considering a range of home improvements, you may not know if what you’re planning is a renovation or a remodel. Does it matter? Yes, because there are key differences.
A renovation is an update of an existing room or structure, while a remodel affects the design and purpose of an area. The more extensive work in a remodel will influence the cost and length of your project.
Key Points
• Renovations involve updating existing rooms with minor, often cosmetic, changes.
• Remodels are more extensive, altering the function and structure of spaces, and are typically more expensive.
• Homeowners may be able to reduce renovation costs by tackling DIY tasks like painting and floor installation.
• Remodels often require permits and professional assistance, adding to their overall cost and complexity.
• Potential benefits of remodeling may include increased family time and potential energy savings.
What Is a Renovation?
During a renovation, one or more rooms are updated and repaired. This might include new cabinets, flooring, and paint, for instance.
The bones of the room are typically left intact, though some structural issues may be fixed in a renovation, such as replacing rotting wood or swapping out window frames suffering from water damage.
A kitchen renovation might include replacing appliances, faucets, and knobs, while a bedroom reno might call for paint, new rugs, or new lighting.
Bathroom renovations often involve installing new tile, towel racks, and faucets.
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Advantages of a Renovation
Renovations are typically less costly than remodels, thanks to several factors.
You Can DIY
If you’re handy, you can slash some of the cost of hiring someone to undertake your renovation by doing some of the work yourself.
Because most renovations don’t require structural changes, you likely won’t need to hire licensed professionals to get it done. That means anything that you’re capable of — painting, wallpapering, floor sanding — you can do and pocket what it would have cost to hire help.
Just make sure you are skilled enough; hiring a professional to redo what you couldn’t complete may cost you money you didn’t plan on spending.
You May Get a Better Return on Investment
Since a renovation doesn’t call for major expenses like hiring licensed professionals or other construction-related outlays, in some cases the project offers more bang for the buck than a remodel does.
Renovation-related tweaks will still improve the look and feel of your home, and thus increase the value of your home, without the major expense a remodel entails.
You Can Expect Fewer Hidden Costs
When you’re renovating a room, your action plan is pretty cut and dried, and there aren’t likely to be surprises that require you to spend more than you planned.
Not so with a remodel, which, due to its scope, may result in additional costs to fix unforeseen problems such as hidden water damage, termites, or asbestos. These surprises can also lengthen the time of your project.
What Is a Remodel?
Remodels are typically more extensive than renovations. They include altering the function and sometimes the structure of an area of the house.
If your project calls for tearing down or adding walls, or changing the layout of a room, you’re planning a remodel.
Some examples of remodels: changing a powder room into a laundry room, knocking down a wall between a dining room and kitchen to create a great room, building an addition to your existing home, or expanding a closet into a dressing room.
Even if you’re not tearing down or adding walls, your project may be a remodel. This might include moving kitchen appliances around to improve room flow for a kitchen remodel, tearing out a tub and installing a walk-in shower in a bathroom, or turning a small guest bedroom into a home office.
Advantages of a Remodel
Many homeowners find there are pluses to a remodel as opposed to a renovation.
You Have the Opportunity to Customize Your Home
As homeowners grow with their home, they may find that their needs change.
Some may want an addition to accommodate an aging parent, while others may have expanded their families and need to convert a home office into a nursery or finish an attic and turn it into a bedroom. Empty-nesters may want to use one of their bedrooms as a study or gym.
A remodel affords them more options than a renovation does because they can make the necessary changes — however major — to achieve their needs.
You May Experience Hidden Benefits
Adding an island to a kitchen and removing a wall to create a larger space might mean more than increased room to prepare meals. You may find your family spends more time together in rooms that are spacious and inviting.
Similarly, retrofitting your heating and cooling system, adding under-floor heating, and replacing insulation might result in lower utility bills, freeing up money for hobbies or vacations.
Recommended: Guide to Buying, Selling, and Updating Your Home
Why a Remodel May Cost More Than a Renovation
All of that means remodels are costlier than renovations. Here’s why.
You May Need Permits
Thanks to the extensive nature of most remodels, many cities require homeowners to secure a permit before they begin work, especially if the project involves creating an addition to the home, or if new walls or new roofs are being installed. This is to ensure that building codes are followed.
If you need permits, you will want to factor in the time it takes to secure them into your timeline. Once the permits are approved, the project may begin. And once it is completed, it will likely need to be approved by a local inspector.
You May Need Professional Help
If your remodel requires electrical, duct, or plumbing work, you will likely need to hire a licensed professional to complete it.
You may also need a general contractor to hire and oversee these workers and others for larger remodels like adding a guest suite to the home or converting an attic to a home office with an en-suite bathroom.
These vendors, while necessary, can be costly since you are paying for their time in addition to any materials.
You May Be Dealing With Construction
While it can be exciting to imagine what your home will look like after a remodel, getting there can be taxing. That’s because you may be living in a construction zone while the project is underway.
It can be difficult to have to eat multiple takeout meals because your kitchen is being worked on, or deal with dust from work being done in the next room over.
If their remodel is especially extensive, some homeowners find they need to rent a home nearby until the remodel has been completed.
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Paying for a Remodel or Renovation
Whether you’re undertaking a renovation or remodel, you’ll want to have a budget and a payment plan. Some renovations are small enough that homeowners can pay upfront.
Those tackling remodels and larger renovations might tap a home equity loan or home equity line of credit, in which the home is used as collateral.
A home equity loan lets you borrow a set amount of money based on your equity in the home. You start paying it back in regular payments immediately, and if you don’t or can’t, you risk foreclosure. If you have a relatively solid sense of what your remodel will cost and are sure you can afford the added monthly payments, this could be a good option.
A home equity loan of credit (HELOC) also draws on your home equity but offers more flexibility. Instead of getting a lump sum, you can access a revolving line of credit (up to a set maximum) and draw from that when you need it, paying interest only on what you’ve taken out. Usually the “draw period” (the time during which you can pull out funds) lasts for a number of years, which should cover even lengthy remodels. However, when the draw period is over, your payments of principal and interest will depend on what you’ve taken out, so they can be less predictable than home equity loan payments. And if you default, you could lose your home.
Recommended: Home Equity Loans vs Personal Loans for Home Improvement
The Takeaway
Undertaking home improvements can be exciting for homeowners. But before you embark on a project, know whether you’re looking at a renovation or a remodel, how much inconvenience you’re prepared to put up with, and what you are willing to pay.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
FAQ
What is the difference between a remodel and a renovation?
A renovation involves making minor updates and/or repairs to an area in your home. A remodel is larger in scope and can include making structural changes to your house, like taking down walls or adding new rooms. Typically, a remodel is more expensive than a renovation.
How much does it cost to remodel vs. renovate?
A remodel is typically more extensive than a renovation and generally requires professional help, so it’s a more expensive proposition, potentially costing thousands of dollars. A renovation is usually more limited in scope and may be largely cosmetic, meaning that if you’re handy, you may be able to do much of it yourself, which can keep the cost much lower
Is painting considered a renovation?
Yes, painting walls or cabinets in your house is generally thought of as a renovation, since it’s essentially cosmetic, rather than a structural change. Other common renovations include installing a smart or programmable thermostat, changing light fixtures, replacing cabinet hardware, and putting in a bathroom vanity or new faucets.
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