If you are following along with my series, Planning Your Renovation, you know the first step of the process is to define your goals, prioritize the scope and organize your project into phases if your project is rather extensive.  Once you have a rough scope of your project, the next step is to do some homework and start determining cost estimates for each area to finalize your reno budget.  That is what we are discussing today!

Overall Cost Estimates

When deciding how much to spend on your renovation, it would be good to understand what your potential return on your investment will be.  Understanding the maximum value your home would be worth in an upgraded, newly renovated condition will help guide you when determining the budget for your project, as generally speaking, you wouldn’t want to “over-build” your home.

Typically, in Southern California, a renovation project that includes kitchen and bathroom remodels will cost between $125 – 200 per square foot to complete – for home improvements excluding kitchen or bathroom remodels, such as replacing flooring, expect to pay about $10 – 20 per square foot for these projects. 

With these in mind, a full kitchen remodel could cost anywhere between $20,000 - $55,000, depending on several factors, including the size of your kitchen, the luxury-level of the finishes you select and how old your kitchen is, to name a few.  Additionally, if you wanted to replace flooring with, say, hardwood flooring, 1,000 square feet could be between $15,000 – 20,000.  Older homes will likely cost more to renovate than newer homes, due to systems like electrical and plumbing likely needing to be brought up to current building codes. 

Here is a quick chart to give you an idea of how the most expensive areas to renovate would stack up depending on the size of the home:

DIY vs. Hiring a Professional

A great way to reduce renovation costs is to determine which parts of your project you feel comfortable doing yourself, such as painting or, if you’re super handy, maybe even laying tile or installing light fixtures.  You will still have material & miscellaneous costs for those areas, but since labor comprises about 30% of your renovation budget, you can save a substantial amount by rolling up your sleeves and getting your hands dirty!

Determine Labor Costs

Once you’ve determined which areas you will do yourself, start with estimating the costs of labor for the areas of the project for which you will hire a professional.  As I mentioned earlier, labor costs will make up about 30% of your total renovation budget.  In my humble opinion, this is an area where you should NOT simply choose the least expensive estimate.  Focus on quality and value when interviewing and selecting construction professionals (stay tuned for a later article on this topic!).

Obviously, the best way to start estimating these costs is to start meeting with contractors and requesting cost estimates.  When you do, try to request estimates from multiple contractors.  If you feel as though you are still too early in the process to meet with contractors, there is a ton of information available online for you to gain some knowledge on labor costs – HomeAdvisor is a GREAT source for average construction costs by discipline.

Determine Material Costs

Overall, the cost of materials will make up the other 70% or so of your total renovation budget.  Material costs can fluctuate a lot depending on the quality and luxury-level of the materials chosen, which means this could be a great way to cut overall construction costs. 

Many homeowners opt to buy their own materials and simply hire out the labor to install them, which can save some money.  Sometimes you can get lucky and find an interior designer who is willing to pass their trade discount on products & materials to you as part of their design services, which could be a great way to receive professional help with selecting the right colors & styles of material the first time while offsetting some the material cost – be sure to ask when you are interviewing designers!

Costs Often Overlooked

Finally, don’t forget to consider these often-overlooked costs when determining your total renovation budget:

• Gross-up your renovation budget by about 10% to cover unexpected costs during the construction process, such as electrical or plumbing issues, etc.
• If you are considering a kitchen remodel, you will likely be without a place to cook for a few weeks so be sure to budget for take-out and any other living expenses during that time.
• Will you need to board your pets during your remodel?
• Don’t forget costs of demo, delivery of material or appliances and costs to dispose of old material and debris.

I hope this gives you some idea of things to consider when you start budgeting for your renovation.  This doesn’t cover everything involved, and chances are, until you start getting some labor estimates from contractors, you won’t be able to get super precise.  However, this should give you a great place to start and come up with a fairly accurate reno budget.