When it comes to planning your next home remodeling project, you want to be able to set a realistic budget. One of the ways to do that is to understand the prices that are typically paid for certain projects, like renovating your kitchen or bathroom and finishing your basement or attic to create additional usable square footage.
Set Your Budget Based on Your Home’s Current Market Value
Before you start your home renovation project, you will want to make sure you are not overbuilding for your neighborhood. Before you can set a home remodeling budget, look at homes that are for sale in your neighborhood that are similar to yours. Make a note of the listing price, how long the home has been on the market and if the homeowner performed any renovations or updates. Finally, take an average of all the market prices for homes similar to yours and use that number as a basis for your renovation projects.
For the purpose of this article, we’ll use the National Association of Realtors’ Sales Price of Existing Homes for 2017, which is $252,800. Your home’s value is critically important because according to “Here’s the Right Amount to Spend on a Home Renovation” by Time, you should aim to spend a certain percentage of your home’s value on any particular renovation in order to avoid overbuilding.
For a kitchen renovation, you should spend up to 15 percent of your home’s estimated market value, according to Time’s article. For a $252,800 home, it means spending up to $37,900 on your kitchen remodel. That’s enough money to perform a minor kitchen remodel, which is estimated to cost $20,830, according to Remodeling.HW. Upon the sale of your home, you can expect to recoup about 80 percent.
You should budget to spend up to five percent of your home’s value on a bathroom remodel that isn’t the master bathroom. For a $252,800 home, that would mean spending up to $12,614 per hall or guest bathroom. The average cost of a midrange universal bathroom remodel in the United States, according to Remodeling.HW is $15,730, and you can expect to recoup about 68 percent.
If you are planning to remodel your master bathroom, Time recommends that you spend up to 10 percent of your house’s total value. For a $252,800 home, that means spending up to $25,280. According to Houzz, a master bathroom remodel can range from $12,000 for a basic bathroom to $60,000 for a luxury bathroom. You can expect to recoup about 65 percent when you sell your home.
Basement and Attic Finishing Projects
Basement and attic finishing projects add usable square footage to your home. According to the article in Time, you should spend up to 15 percent of your home’s value. In this example, your budget should be $37,920. According to Remodel.HW, the average cost of a midrange basement remodel is $71,115, and you can expect to recoup about 70 percent when you sell your home. According to House Logic, the average cost of converting an unfinished attic into a bedroom is $65,000, and you can expect to recoup about 61 percent.
Choosing the Right Remodeling Project
Of course, these are all just general guidelines, and personal needs will vary from person to person. To choose the right remodeling project for your home, you should determine which project would best benefit you while you are still living in your home, the potential return on investment (ROI) and your renovation budget. If you are having trouble deciding, potential homeowners tend to place a high value on updated kitchens and bathrooms and homes with private master bathrooms.