Renovation Vs. Remodel: Is There a Difference?

Are you someone who has longed to make changes to your home, but you are confused about renovation or remodeling? It’s common to use these terms interchangeably, but there are differences between them. Knowing the distinction between renovation vs. remodeling can help homeowners make informed decisions when embarking on their next home improvement project. Let’s take a closer look at renovation Vs remodeling, so you can navigate your home renovation journey with clarity and confidence.

Renovating and Remodeling: What’s the Difference?

Renovation and remodeling are terms often used interchangeably when it comes to home improvement projects, but they refer to slightly different processes. Here’s the difference between renovation and remodeling:

Renovation

A renovation typically refers to the process of restoring something old or existing to a good state of repair. It involves updating or reviving a space, structure, or building without necessarily changing its layout or design. The primary goal of renovation is to improve the existing conditions, maintain the original character, and extend the lifespan of the property.

Examples of renovation projects include:

• Painting walls and ceilings
• Refinishing floors
• Updating light fixtures and plumbing fixtures
• Repairing or replacing windows and doors
• Resurfacing countertops or cabinets
• Restoring historic elements or features

Remodeling

Remodeling, on the other hand, involves making significant structural changes or alterations to the existing layout or design of a space or building. It often involves reconfiguring or modifying the layout, changing the functionality of a space, or incorporating new elements or features.

Examples of remodeling projects include:

• Knocking down walls to create an open floor plan
• Adding or removing rooms
• Changing the footprint or layout of a kitchen or bathroom
• Relocating doors or windows
• Finishing an attic, basement, or garage to create additional living space
• Updating the exterior façade or adding an extension

The main difference between renovation and remodeling lies in the scope and extent of the changes made. Renovations typically aim to improve and update the existing structure, while remodeling involves more extensive alterations and modifications to the layout, design, or functionality of a space.

Renovation Vs. Remodeling: Cost and Value

While renovations and remodels can breathe new life into your living space, they differ significantly in terms of cost and the value they add to your property. Let’s delve deeper and help you decide which path best suits your budget and goals.

1. Renovation

Renovations are a great way to update your home without spending much money. For example, you can change the look of a room by painting the walls or updating the light fixtures. Renovations usually cost a few hundred dollars, making them affordable for most budgets.

• Cost

• Typically less expensive than a full remodel
• Costs can vary depending on the scope of work and the condition of the existing space
• Often involves cosmetic updates and repairs, which are generally more affordable

Examples: Painting, refinishing floors, updating fixtures, minor repairs

• Value

• Can increase the value of a home by enhancing its appearance and condition
• May not add significant resale value, but can make the home more appealing to potential buyers
• Can extend the lifespan of the property and prevent further deterioration
• Provides an opportunity to update outdated features and improve energy efficiency

2. Remodeling

Remodels are a whole different ball game. They tackle more substantial changes that can significantly impact the space’s functionality and layout. Imagine knocking down walls to create an open-concept kitchen-living area, relocating plumbing to accommodate a luxurious walk-in shower, or completely rewiring the electrical system for modern appliances. These are all hallmarks of a remodel.

• Cost

• Generally more costly than a renovation
• Involves structural changes, reconfiguring layouts, and potentially adding square footage
• Requires more extensive labor, materials, and potentially permits or architectural plans

Examples: Kitchen or bathroom overhauls, room additions, open floor plan conversions

• Value

• Has the potential to add more resale value to a home, especially if it increases square footage or functionality
• Significant remodeling projects, such as kitchen or bathroom renovations, often provide a good return on investment (ROI)
• Can improve the flow, layout, and overall livability of a home, making it more desirable for potential buyers
• Allows for customization and personalization to suit specific needs and preferences

How To Finance a Renovation Or Remodeling

When deciding which home upgrades to prioritize, it is best to consider which projects will deliver the highest return on investment.  However, with careful planning and consideration, you can find the perfect financing solution to bring your renovation dreams to life.

1. Assess Your Budget and Needs

Before diving into financing options, it’s essential to assess your budget and the scope of your renovation project. Take stock of your financial situation and determine how much you can afford to spend on the renovation. Consider the specific needs of your project, such as materials, labor costs, and any unforeseen expenses that may arise.

2. Personal loan

You can often get a personal loan in an amount that is greater than any credit card limit, and it will probably also have a lower interest rate than a credit card. This makes personal loans a less expensive way to finance any major housing project you take on.

Rates fluctuate with personal loans, but interest rates currently range from 5 percent to 36 percent, depending on the lender and factors like your income, debt-to-income ratio, and credit score. Personal loan terms can range from one to 10 years, and loan amounts range from as little as $1,000 to as much as $100,000.

3. Tap into Your Home Equity

If you’ve built up equity in your home, tapping into it can be an excellent way to finance your renovation project. Home equity loans and HELOCs allow you to borrow against the equity you’ve built in your home, using your property as collateral.

This type of loan works well for large remodels, as you can borrow a significant amount of money at a low-interest rate. The downside is that your home will be used as collateral for the loan if you can’t repay it.

4. Consider Government Programs

In some cases, government programs and incentives may be available to help finance home renovations. For example, the Federal Housing Administration (FHA) offers 203(k) loans specifically for home renovations, which allow borrowers to finance both the purchase of a home and the cost of renovations in a single loan.

Additionally, some local governments offer grants or low-interest loans to homeowners for certain types of renovations, such as energy-efficient upgrades or accessibility modifications.

5. Save and Budget Wisely

If taking out a loan isn’t feasible or desirable, saving up for your renovation project may be the best option. Start by creating a savings plan and setting aside a portion of your income each month towards your renovation goals. Cut back on discretionary expenses and look for ways to reduce costs without sacrificing quality. By prioritizing your renovation goals and adhering to a budget, you can gradually accumulate the necessary funds to finance your project without accruing debt.

Should You Remodel or Renovate

When deciding whether to remodel or renovate, consider the purpose of the project, the scope of work, budget constraints, and timeline. If the goal is to make cosmetic changes or minor upgrades, a renovation may be sufficient. However, if there are functional necessities or a need to change the layout significantly, a remodel may be necessary. It’s essential to assess the specific requirements of the project, budget accordingly, and seek expert advice to determine the best approach for your fitout project.

How Do I Decide If My House Needs Renovation or Remodeling

When deciding between renovation and remodeling, consider the condition of your home’s key features, the scope of work required, your budget and return on investment, your long-term plans for the home, and consult professionals for guidance. Renovations are typically less expensive and offer a higher ROI, while remodels involve more extensive changes and can be costlier but may better suit long-term needs and goals

The Bottom Line