How Much Does It Cost to Renovate a House? Guide for Real Estate Investors
When a real estate investor is looking at the cost to renovate a house, there are several factors to consider, especially when your goal is to keep the project as affordable as possible and get the best return on investment. According to HomeAdvisor, the typical range to renovate or remodel a house in 2020 is between $18,385-$75,991.
It’s no secret that the cost to renovate an older home will be higher than renovating newer ones. Generally, older homes will more likely have underlying issues that come about during construction, including foundation, plumbing, or structural problems. There is also more work that goes into older homes so they can meet current building codes, and that work and cost can be more extensive.
Another significant factor besides age is size. The bigger the home or more square footage it has, the higher the cost to renovate. A house that is 1,000 square feet estimates a cost to renovate at $19,000, where a house that is 4,000 square feet can cost upwards of $100,000 to renovate.
The cost to renovate a house will also depend on the cost of living in the area you’re working in. The average refurbishing and remodeling cost in Chicago, IL, is around $42,250, whereas in Dallas, TX, the cost to renovate averages $31,500. The prices fluctuate between regions due to the base costs for materials like countertops, appliances, and labor costs associated with projects.
Full Home v. Select Rooms
When you’re looking to renovate a house, the cost can change dramatically based on what your goals are. Completely renovating a full house, including the exterior, can drive up costs, whereas if you’re only looking to renovate the kitchen and bathroom with a few minor updates to spaces like the living room or bedrooms, you’ll be looking at a lower cost overall.
Real estate investors know that budgeting appropriately for any home remodel is the key to making a profit at the end of the project. When done correctly, a home renovation can give you more equity.
Considering your financing options is generally the first step to budgeting. When you work with Renovo, we can partner you with the best financing options for your situation.
When budgeting the cost to renovate a house, you should always get a few estimates, especially when you want to stick to the budget. Asking contractors for a “hard” estimate is a good idea for you to get a detailed list of the costs involved and a timeline for completion.
If the house you’ve chosen to renovate is older or has more square footage, you should always plan for the unexpected. Renovo suggests adding an additional 10-20% to the budget for those unanticipated expenses.
Costs associated with building permits are sometimes overlooked and can add an additional $400-$1,800 to your project. Permits are generally required for:
- New Construction
- Major Renovations
- Structural Changes
- Electrical, Mechanical and Plumbing Work
Contact Renovo today to talk to one of our specialized loan officers about options you have to get the financing for the cost to renovate a home.