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George Nicola

George is a seasoned interior designer and property marketing strategist with over 13 years of experience. He specializes in transforming properties into visually stunning spaces, helping clients recognize the potential and beauty in each property. With an impressive international client base of exciting projects throughout Europe and America.

Table of Contents

One of the most critical steps in any forever or starter home improvement project is setting a realistic budget. Any home remodeling budget should account for various sub-budgets, such as the kitchen renovation allocation, bathroom remodel funds, flooring update expenses, architect or designer fees and so on.

Estimating a reno budget accurately helps you avoid overspending and ensure that your renovation adds value to your home.

Start by determining the approximate value of your home, as each room’s renovation cost should align with its proportion of this overall value.

For example, areas like the kitchen often take up about 10% of the home’s value. Use online tools and calculators to get very rough estimate based on local market conditions and the specifics of your renovation project. Don’t forget to factor in a contingency of between 10% up to 25% for unexpected expenses, and be ready for seasonal and hiddent fees.

If a design firm is considered, the designer should provide that as part of their service, if a designer is not involved in the project, using a detailed budget template or worksheet can greatly simplify the process. 

Free templates are readily available online and can help you plan for every aspect of your renovation, from materials to labor costs. By having a well-thought-out budget, you’ll be better prepared to document and  manage your home improvement project efficiently.

Read how Construction Estimation works if you are considering building a new home, or how architectural and construction feasibility for larger reconsturcitons of a property.

George Nicola from TALLBOX advises: Determining your home renovation budget requires a balanced approach – improvements against luxury upgrades. Prioritize immediate fixes over future value additions to address critical needs first. To achieve the best outcome, start by listing all fixed and variable expenses. Fixed expenses include mortgage or rent, insurance, and utilities, while variable expenses cover freelance design help, subcontractor fees, materials and more.

Key points:

Consider DIY efforts for cost savings, but opt for expert craftsmanship on complex tasks. 80% of successful renovations involve professionals for key aspects. Balance predictable expenses with allowances for fluctuating charges, typically reserving 15-20% of your budget for unexpected costs.

Focus on foundational changes before surface-level updates. Structural improvements often yield a higher return on investment, potentially increasing property value by 5-10%. Weigh market value increases against quality of life improvements when allocating funds.

Work within financial limitations while pursuing aesthetic goals. Energy-efficient upgrades may have higher upfront costs but offer long-term savings, potentially reducing energy bills by 20-30% annually.

Evaluate whether a targeted update or whole-home overhaul better suits your needs and resources. Financing options include using savings or securing loans, each with distinct advantages depending on your financial situation.

By carefully considering these dualities, you create a comprehensive and realistic renovation budget. This approach ensures your project aligns with both your immediate needs and long-term aspirations.

How the define reno budget in a forever home and starter home?

Defining renovation budgets for forever homes and starter homes requires distinct approaches due to their different long-term goals.

Key five elements of an effective renovation budget include:

  1. Comprehensive planning: Account for all anticipated expenses, from materials to labor
  2. Prioritized spending: Focus 70-80% on essential upgrades that add tangible value
  3. Contingency fund: Set aside 15-20% for unexpected issues or cost overruns
  4. Quality-focused allocations: Invest in durable materials and skilled labor for longevity
  5. ROI consideration: Prioritize projects with potential returns of 70-80% or higher

Forever home renovations prioritize enduring quality and personalization. Allocate 20-30% more funds to high-end finishes and custom features that enhance long-term comfort. Invest in energy-efficient systems, potentially reducing utility costs by 25-40% over time. Focus on timeless designs rather than fleeting trends to maintain value.

Starter home budgets, conversely, emphasize cost-effective improvements with broad appeal. Target essential upgrades that boost resale value, typically yielding a 70-80% return on investment. Opt for neutral, universally appealing aesthetics to attract future buyers. Limit major structural changes, reserving 60-70% of the budget for visible, impactful updates.

Balance immediate needs against future aspirations in both scenarios. Forever homes benefit from comprehensive renovations, while starter homes profit from strategic, targeted updates. Consider professional expertise for 80% of forever home projects, compared to 50-60% for starter homes where DIY efforts can reduce costs.

Financing strategies differ between these home types. Forever home renovations often justify larger loans or extensive savings allocation due to long-term benefits. Starter home improvements typically rely on more modest budgets or short-term financing options to maintain positive equity.

What is renovation budget?

A renovation budget outlines the total costs allocated for home improvement projects. It encompasses all expenses related to updating, repairing, or enhancing a property.

Key components of a renovation budget include:

  1. Materials: Costs for items like flooring, paint, fixtures, and appliances
  2. Labor: Expenses for contractors, specialists, and any hired help
  3. Permits and fees: Legal costs associated with renovation work
  4. Design and planning: Costs for architects or interior designers, if used
  5. Contingency fund: Typically 10-20% of the total budget for unexpected issues
A man holding a red binder extends his hand to shake with a line of construction workers, all wearing helmets and work attire at a building site, discussing the home renovation budget.
A man holding a red binder extends his hand to shake with a line of construction workers, all wearing helmets and work attire at a building site, discussing the home renovation budget.

Renovation budgets vary widely based on project scope, home size, and location. A minor kitchen update might cost $10,000-$30,000, while a full home renovation could exceed $150,000. The rule of thumb a good renovation budget balances realistic costs with desired outcomes. It typically allocates 5-15% of the home’s value for major renovations, ensuring improvements align with property worth.

Careful budgeting prevents overspending and ensures project completion. It helps homeowners prioritize improvements, make informed decisions, and achieve desired results within financial constraints.

Effective budget management often leads to smoother renovations and higher satisfaction with the final outcome. Regular review and adjustment of the budget throughout the project helps maintain financial control and project success.

What is good renovation budget?

A good renovation budget balances realistic costs with desired outcomes. It typically allocates 5-15% of the home’s value for major renovations, ensuring improvements align with property worth. The idea of budgeting is avoiding over-improving a single area of your home, which could make it difficult to recoup your investment when selling.

Considering the value of your home as a whole when budgeting for renovations is a smart approach to ensure you don’t over-improve a single room relative to the rest of your house. Here are some examples to illustrate this principle:

  • $250,000 Home Value: • 10-15% range: $25,000 – $37,500 • Kitchen renovation budget: Up to $37,500 • Bathroom remodel: Up to $25,000 • Master bedroom update: Up to $25,000
  • $500,000 Home Value: • 10-15% range: $50,000 – $75,000 • Kitchen renovation budget: Up to $75,000 • Bathroom remodel: Up to $50,000 • Finished basement: Up to $75,000
  • $750,000 Home Value: • 10-15% range: $75,000 – $112,500 • Kitchen renovation budget: Up to $112,500 • Master suite addition: Up to $112,500 • Living room and dining room update: Up to $75,000
  • $1,000,000 Home Value: • 10-15% range: $100,000 – $150,000 • Luxury kitchen remodel: Up to $150,000 • High-end bathroom renovation: Up to $100,000 • Home office conversion: Up to $100,000
  • $1,500,000 Home Value: • 10-15% range: $150,000 – $225,000 • Gourmet kitchen overhaul: Up to $225,000 • Spa-like master bathroom: Up to $150,000 • Home theater installation: Up to $150,000

Well-structured budgets often lead to 30-40% fewer project delays and cost overruns. They enable homeowners to make informed decisions about where to splurge and where to save.

Flexibility remains crucial in good budgeting. Allow for adjustments as the project progresses, maintaining a balance between ideal outcomes and financial constraints.

A smiling man with gray hair holds a red binder labeled "BUDGET" and gestures toward a construction crew working in the background. Several workers, busy with what appears to be a home renovation project, are wearing safety helmets and high-visibility vests.
A smiling man with gray hair holds a red binder labeled "BUDGET" and gestures toward a construction crew working in the background. Several workers, busy with what appears to be a home renovation project, are wearing safety helmets and high-visibility vests.

How does Renovation cost breakdown look like?

A renovation cost breakdown typically provides a detailed itemization of expenses for a home improvement project, it is most used document in construction acitivities, followed by inspection protocols (snag lists).

A general structure of how a renovation cost breakdown might look, with approximate percentages of the total budget:

1. Pre-Construction Costs:

  • Architectural/Design Fees: Costs for hiring an architect or designer to create plans and drawings for your renovation.
  • Surveyor Fees: Costs for conducting surveys to assess the structural integrity of the property and identify potential issues.
  • Permits and Approvals: Fees for obtaining necessary permits and approvals from local authorities.

2. Construction Costs:

  • Permits and Inspections (1-5% of total budget)
    • Building permits
    • Inspection fees
  • Labor: The largest expense (30-50% of total budget), including wages for contractors, subcontractors (electricians, plumbers, etc.), and other skilled tradespeople.
  • Materials (30-40% of total budget)
    • Building materials (lumber, drywall, insulation, etc.)
    • Finishes (paint, tile, flooring, etc.)
    • Fixtures (lighting, plumbing fixtures, etc.)
  • Equipment Rental: Costs for renting specialized tools and equipment not owned by the contractor.
  • Demolition (2-5% of total budget)
    • Removal of existing structures or materials
    • Waste management and disposal fees
  • Waste Disposal: Fees for disposing of construction debris and old materials.
  • Temporary Living Expenses (if necessary)
    • Rent for temporary housing
    • Storage fees for furniture and belongings
  • Contingency Fund (10-25% of total budget)
    • Reserved for unexpected costs or changes
  • Site Work and Utilities (5-10% of total budget, if applicable)
    • Landscaping
    • Driveway or walkway improvements
    • Utility upgrades or connection

Post-Construction Costs:

  • Cleaning: Costs for professional cleaning services to prepare the renovated space for occupancy.
  • Appliances and Electronics (10-15% of total budget) • Kitchen appliances • HVAC systems • Smart home technology
  • Cabinetry and Countertops (10-20% of total budget) • Custom or pre-fabricated cabinetry • Countertop materials and installation
  • Windows and Doors (5-10% of total budget) • Replacement windows • Interior and exterior doors
Table detailing the percentage cost breakdown for a kitchen renovation, including categories like Pre-Construction, Construction, and Post-Construction with respective sub-categories and percentages. Essential for managing your home renovation budget effectively.
Table detailing the percentage cost breakdown for a kitchen renovation, including categories like Pre-Construction, Construction, and Post-Construction with respective sub-categories and percentages. Essential for managing your home renovation budget effectively.

Is renovation the same as remodeling?

Renovation and remodeling, while often used interchangeably, have distinct differences in scope and purpose. Renovations aims at restoring, remodeling aims at altering.

Components of renovation:

Restoring or updating existing structures
Refreshing worn or outdated elements
Preserving the original design and layout
Cosmetic improvements like painting or refacing cabinets

Components of remodeling:

Altering the structure or layout of a space
Changing the purpose or function of a room
Adding or removing walls, windows, or doors
Major overhauls that significantly transform the space

Cost differences are notable. Renovations generally cost 10-30% less than remodeling projects. Renovations often focus on surface-level updates, while remodeling involves more extensive, structural changes.

Timeframes vary. Renovations typically take 20-50% less time to complete compared to remodeling projects. This difference impacts both budget and living arrangements during the work.

Person carefully organizing rectangular tiles in open boxes on the floor of a modern, minimalist bathroom, meticulously working within their home renovation budget.
Person carefully organizing rectangular tiles in open boxes on the floor of a modern, minimalist bathroom, meticulously working within their home renovation budget.

Permit requirements differ as well. Remodeling usually requires more extensive permitting, potentially adding 5-10% to overall costs. Renovations may need fewer or no permits, depending on the scope.

Understanding these distinctions helps homeowners choose the right approach for their needs and budget. Whether opting for a refresh or a complete transformation, clarity on project type ensures aligned expectations and outcomes.

What are Renovation Goals and how to set them?

Managing a home remodeling project starts with setting up a solid budget. This involves estimating costs, setting aside funds for unexpected expenses, and finding ways to save money without compromising quality.

Setting specific, realistic, measurable, and limited goals is crucial for a successful design project. Instead of aiming for something vague like “good design,” goals should be clearly defined and attainable.

 
A person carrying three stacked boxes labeled "TALLBOX" while walking through a doorway, amidst the bustle of a home renovation.
A person carrying three stacked boxes labeled "TALLBOX" while walking through a doorway, amidst the bustle of a home renovation.

Five examples of applying “set goals” principle to interior design goals:

Energy Efficiency: Instead of “improve the building’s energy performance,” a specific goal would be to “reduce energy consumption by 15% within one year of project completion”. This goal is measurable through utility bills and establishes a clear timeframe for achieving the desired outcome.

Material Selection: Rather than simply aiming to “use environmentally friendly materials,” a more specific and actionable goal would be to “incorporate materials with at least 30% recycled content in 50% of the project’s finishes”. This goal sets quantifiable targets for both the type and quantity of sustainable materials used.

User Recycling: Instead of a general objective to “make recycling easy,” a more concrete goal would be to “designate clearly labelled recycling stations within 25 feet of every workstation”. This objective specifies the type of recycling support, its placement, and proximity to users.

Budget Management: Rather than a vague goal of “staying within budget,” aim to “complete the project within 5% of the approved budget, using detailed cost tracking and regular budget reviews”. This goal establishes a clear financial target and outlines specific actions for achieving it.

Project Schedule: Instead of aiming to “finish the project on time,” a measurable goal would be to “complete all design phases by the agreed-upon deadlines outlined in the project schedule, using weekly progress reports and proactive communication to manage potential delays”. This goal sets clear deadlines for each project phase and implements tools for tracking progress and addressing potential setbacks.

 

Should you hire interior designer to calculate budget?

Hiring an interior designer to calculate your renovation budget offers both advantages as accurate cost estimates and access to trade discounts and potential drawbacks, such as designer fees and potential for over-budgeting.

Designers typically provide within 10-15% accuracy and potentially saving the project 10-20% on materials and furnishings, this is a time-saving that reduces research time by 40-50% for homeowners, designer can address 90-95% of potential issues before they arise.

For some the drawback to hiring designer to just calculate budget is that designer fees will add 10-20% to overall project costs. Some designers may suggest high-end options, thus homeowners with more hands-on approach can have fewer direct decisions.

Rule of thumb: For complex renovations exceeding $50,000, designer input often proves valuable. Smaller projects under $20,000 may not justify the additional expense.

Alternative approaches include:

  1. Using online budget calculators: Provides rough estimates within 20-30% accuracy
  2. Consulting contractors directly: Offers project-specific quotes
  3. Researching costs independently: Time-consuming but gives more control

For large-scale renovations, professional input often leads to smoother execution and potentially better long-term value.

Can 3D interior renderings help with budget?

Yes, 3D interior renderings can be a valuable tool in managing and optimizing your budget for interior design projects. 3D renderings allow you to see the proposed design in detail before any actual construction or purchasing takes place. This helps identify potential design flaws or areas where changes can be made to optimize the budget early in the process.

Accurate cost estimation: By having a realistic visualization of the final design, you can get more accurate cost estimates for materials, furniture, and labor. This helps you make informed decisions and avoid unexpected expenses down the line.

Reduced rework and material waste: 3D renderings help ensure that the design is finalized and approved before any work begins, minimizing the need for costly changes or rework during the construction phase. This reduces material waste, as you’ll know exactly what you need and order accordingly.

Better decision-making: 3D renderings help you compare different design options and materials in a visual context, making it easier to choose the most cost-effective solutions that still meet your aesthetic preferences.

Effective client communication: 3D renderings provide a clear and tangible representation of the design, making it easier for clients to understand and approve the project. This can streamline the approval process, saving time and potential budget overruns caused by miscommunication.

Avoiding costly mistakes: 3D renderings can help identify potential spatial issues or functional problems with the design before they become costly mistakes during construction.

Prioritizing Renovation Activities

Once the scope is clear, the next step is to prioritize which activities should come first. Prioritize what will bring the most value to your property. For example, if your roof is old and leaking, addressing this before more cosmetic updates is wise to protect your home.

Kitchens and bathrooms are often top priorities since they significantly impact usability and property value. Meanwhile, updating cosmetic features like paint and flooring, though important, might take a back seat if structural updates are urgent.

Make a list of all the renovation activities and rank them based on importance, starting with safety and structural integrity, followed by rooms that add the most value. This approach ensures that your budget is spent wisely, focusing on critical updates before moving to less urgent design changes.

List of detailed aspects per room

Prioritizing room-specific renovations can improve budget, time, activities, efficiency, and value of the makeover. This systematic approach ensures that critical updates are addressed first, followed by improvements that enhance daily living and long-term property value.

Start from top to bottom when planing:

  • Living spaces (living room, bedroom, office)
  • Functional areas (kitchen, bathroom, laundry)
  • Auxiliary spaces (basement, attic, garage)
  • Transitional areas (entryway, sunroom)
  • Others
  • Living Room: a. Paint walls b. Install new light fixtures c. Replace window treatments d. Refinish hardwood floors e. Update electrical outlets and switches f. Install crown molding g. Add built-in bookshelves h. Replace windows i. Install a fireplace j. Reconfigure the room layout
  • Kitchen: a. Replace cabinet hardware b. Install new faucet c. Update light fixtures d. Paint cabinets e. Replace countertops f. Install backsplash g. Replace appliances h. Refinish or replace flooring i. Remodel cabinetry layout j. Expand kitchen space (remove walls)
  • Dining Room: a. Paint walls b. Update light fixture c. Refinish dining table d. Replace chair upholstery e. Install wainscoting f. Add built-in china cabinet g. Replace flooring h. Install coffered ceiling i. Expand room by removing wall j. Add bay window seating area
  • Bathroom: a. Replace toilet seat b. Update mirror c. Install new shower head d. Replace faucet and sink hardware e. Repaint walls and ceiling f. Replace vanity g. Retile floor h. Install new shower/tub i. Upgrade ventilation system j. Completely reconfigure layout
  • Bedroom: a. Paint walls b. Replace light fixtures c. Install new closet organizers d. Replace flooring e. Add crown molding f. Install ceiling fan g. Replace windows h. Build custom closet system i. Add en-suite bathroom j. Expand room size
  • Home Office: a. Paint walls b. Install new light fixtures c. Add shelving d. Replace flooring e. Install built-in desk f. Add electrical outlets g. Soundproof walls h. Install custom cabinetry i. Add skylights j. Convert adjacent space for expansion
A table displays total budget options of $20,000 and $50,000 with corresponding contingency fund ranges of $2,000–$4,000 and $5,000–$10,000 respectively, often used in feasibility studies.
A table displays total budget options of $20,000 and $50,000 with corresponding contingency fund ranges of $2,000–$4,000 and $5,000–$10,000 respectively, often used in feasibility studies.
  • Basement: a. Paint walls b. Install proper lighting c. Add area rugs d. Seal cracks in foundation e. Install drop ceiling f. Add electrical outlets g. Install egress window h. Waterproof walls and floor i. Finish as living space j. Add bathroom
  • Attic: a. Add insulation b. Install ventilation fans c. Add lighting d. Reinforce floor joists e. Install skylights f. Add electrical wiring g. Install flooring h. Add walls and finishing i. Install heating/cooling system j. Convert to bedroom suite
  • Garage: a. Organize with shelving b. Paint walls c. Seal and paint floor d. Upgrade lighting e. Install insulation f. Replace garage door g. Add electrical outlets h. Install climate control i. Convert to living space j. Build second story addition
  • Laundry Room: a. Paint walls b. Add storage shelves c. Install folding counter d. Replace light fixtures e. Add sink f. Install new flooring g. Upgrade washer and dryer h. Add cabinets i. Reconfigure layout j. Expand room size
  • Entryway/Foyer: a. Paint walls b. Update light fixture c. Add coat hooks or rack d. Install new door hardware e. Replace flooring f. Add storage bench g. Install wainscoting h. Replace front door i. Add skylight or transom window j. Expand and reconfigure space
  • Sunroom/Porch: a. Paint walls b. Add indoor plants c. Install ceiling fan d. Replace light fixtures e. Add window treatments f. Install new flooring g. Replace windows h. Insulate walls and ceiling i. Add heating/cooling system j. Enclose open porch

Bespoke Joinery Company vs Furniture store

Choosing between a bespoke joinery company and a furniture store significantly impacts your renovation budget and outcomes.

Bespoke joinery typically costs 30-50% more than store-bought furniture but offers customization and quality advantages. Custom pieces fit spaces perfectly, potentially increasing storage efficiency by 15-20%. High-quality materials and craftsmanship often result in furniture lasting 10-15 years longer than mass-produced alternatives.

Furniture stores provide more immediate and cost-effective solutions. Ready-made items can be 40-60% cheaper than custom options, allowing for quicker project completion. However, they may not maximize space utilization, potentially leaving 10-15% of room potential unused.

Consider long-term value: While bespoke joinery has higher upfront costs, its durability and tailored design can offer better value over time. Conversely, furniture store options allow for more frequent style updates within the same long-term budget.

The choice depends on your priorities: uniqueness and perfect fit versus cost-effectiveness and flexibility. For statement pieces or challenging spaces, bespoke joinery often justifies its premium. For easily furnished areas or temporary solutions, furniture store options can be more budget-friendly.

Construction and Installation Details

uring the construction and installation phase, coordination with professionals such as contractors and electricians is critical. This stage involves laying out the work, scheduling tasks, and ensuring high-quality workmanship.

Essential actions:

  • Hiring qualified professionals: Skilled workers can execute the plan efficiently.
  • Project timeline: Establish a clear timeline to avoid delays.
  • Quality control: Regular checks ensure that the work meets standards.

This phase demands attention to detail and good communication to manage timelines and costs effectively. Making sure that each step of the installation process is completed correctly can save time and expense in the long run.

How to get Accurate contractor Quotes?

Getting accurate quotes from contractors is crucial. Start by making a detailed checklist of all the work needed, including materials and specifics. Reach out to multiple contractors for bids to compare pricing and labor costs.

When seeking quotes, check references to understand the contractor’s past work. Ask for detailed breakdowns of labor and material costs. This helps identify potential areas where you might save money or need to allocate more budget.

A clear contract should outline all aspects of the project, including scope of work, payment schedules, and timelines. This document serves as a reference point throughout the renovation.

Discuss the timeline with your contractor in detail. Establish a start date and an expected completion date. Break down the project into phases, and set milestone dates. This helps keep the project on track and prevents delays.

Include clauses for handling delays or changes in the construction contract. Knowing how these situations will be addressed legally protects both you and the contractor. Establish communication protocols to stay updated on progress and any potential issues.

Be aware of Seasonal and Hidden Renovation Costs

The cost of home renovations can vary significantly depending on the time of year you choose to undertake your project. This is due to fluctuations in demand for both labor and materials.

Seasonal renovation costs refer to how the timing of your renovation project can affect its overall cost.

Winter (December-February):

Often cheaper for indoor renovations due to lower demand
Potential savings of 5-15% on labor costs
Materials may be less expensive as suppliers clear inventory
Outdoor projects may cost more due to weather challenges

Spring (March-May):

Costs begin to rise as demand increases
Material prices may increase by 5-10%
Contractor availability becomes limited, potentially increasing labor costs

Summer (June-August):

Peak season for renovations, especially outdoor projects
Highest demand for contractors, potentially increasing labor costs by 10-20%
Material costs may be at their highest due to demand

Fall (September-November):

Costs start to decrease as demand wanes
Potential for end-of-season sales on materials and appliances
Contractors may offer discounts to secure work for the slower winter months

Hidden renovation costs are unexpected expenses that often arise during a renovation project. To account for these hidden costs, it’s recommended to add a 15-20% contingency to your renovation budget. This buffer helps ensure you can handle unexpected expenses without derailing your project or compromising on quality.

Permit fees:

Can range from $500 to $2,000 or more, depending on the project and location

Structural issues:

Discovering mold, asbestos, or foundation problems can add 10-20% to your budget

Upgrading electrical systems:

Older homes may require rewiring, potentially adding $2,500 to $4,500 to costs

Plumbing updates:

Replacing old pipes or fixing leaks can cost $500 to $3,000 or more

Building code compliance:

Bringing systems up to current codes can add 10-15% to your budget

Temporary housing:

If you need to move out during renovations, factor in $1,000 to $3,000 per month

Storage costs:

Storing furniture during renovations can cost $50 to $300 per month

Post-renovation cleaning:

Professional cleaning services can cost $200 to $500

Landscaping repair:

Fixing damage to your yard from construction can cost $500 to $2,000

Dining out:

If your kitchen is unusable, increased food costs can add up to $500 to $1,000 per month