Renovation vs remodel: What’s the difference?


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If you’re a homeowner considering a range of home improvements, you may not know if what you’re planning is a renovation or a remodel. Does it matter? Yes, because there are key differences.

A renovation is an update of an existing room or structure, while a remodel affects the design and purpose of an area. The more extensive work in a remodel will influence the cost and length of your project.

Related: Home equity loans vs personal loans for home improvement

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What Is a Renovation?

Renovation vs remodel: What's the difference?

During a renovation, one or more rooms are updated and repaired. This might include new cabinets, flooring, and paint.

The bones of the room are typically left intact, though some structural issues may be fixed in a renovation, such as replacing rotting wood or swapping out window frames suffering from water damage.

A kitchen renovation might include replacing appliances, faucets and knobs, while a bedroom reno might call for paint, new rugs or new lighting.

Bathroom renovations often involve installing new tile, towel racks and faucets.

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Advantages of a Renovation

Renovation vs remodel: What's the difference?

Renovations are typically less costly than remodels, thanks to several factors.

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1. You Can DIY

Renovation vs remodel: What's the difference?

If you’re handy, you can slash some of the cost of hiring someone to undertake your renovation by doing some of the work yourself.

Because most renovations don’t require structural changes, you likely won’t be on the hook to hire licensed professionals to get it done. That means anything that you’re capable of—painting, wallpapering, floor sanding—you can do and pocket what it would have cost to hire help.

Just make sure you are skilled enough; hiring a professional to redo what you couldn’t complete may cost you money you didn’t plan on spending.

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2. You May Get a Better Return on Investment

Renovation vs remodel: What's the difference?

Since a renovation doesn’t call for major expenses like hiring licensed professionals or other construction-related outlays, in some cases the project offers more bang for the buck than a renovation does.

Renovation-related tweaks will still improve the look and feel of your home, and thus increase the value of your home, without the major expense a renovation entails.

You might want to try this handy home improvement ROI estimator.

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3. You Can Expect Fewer Hidden Costs

Renovation vs remodel: What's the difference?

When you’re renovating a room, your action plan is pretty cut and dry, and there aren’t likely to be surprises that require you to spend more than you planned.

Not so with a remodel, which, due to its scope, may result in additional costs to fix unforeseen problems such as hidden water damage, termites or asbestos.

These surprises can also lengthen the time of your project.

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What Is a Remodel?

Renovation vs remodel: What's the difference?

Remodels are typically more extensive than renovations. They include altering the function and sometimes the structure of an area of the house.

If your project calls for tearing down or adding walls or changing the layout of a room, you’re planning a remodel.

Some examples of remodels: changing a powder room into a laundry room, knocking down a wall between a dining room and kitchen to create a great room, building an addition to your existing home or expanding a closet into a dressing room.

Even if you’re not tearing down or adding walls, your project may be a remodel. This might include moving kitchen appliances around to improve room flow, tearing out a tub and installing a walk-in shower in a bathroom or turning a small guest bedroom into a home office.

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Advantages of a Remodel

Renovation vs remodel: What's the difference?

Many homeowners find there are pluses to a remodel as opposed to a renovation.

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1. You Have the Opportunity to Customize Your Home

Renovation vs remodel: What's the difference?

As homeowners grow with their home, they may find that their needs change.

Some may want an addition to accommodate an aging parent, while others may have expanded their families and need to convert a home office into a nursery.

Empty-nesters may want to use one of their bedrooms as a study or gym.

A remodel affords them more options than a renovation does because they can make the necessary changes—however major—to achieve their needs.

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2. You May Experience Hidden Benefits

Renovation vs remodel: What's the difference?

Adding an island to a kitchen and removing a wall to create a larger space might mean more than increased room to prepare meals. You may find your family spends more time together in rooms that are spacious and inviting.

Similarly, retrofitting your heating and cooling system, adding under-floor heating and replacing insulation might result in lower utility bills, freeing up money for hobbies or vacations.

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Why a Remodel May Cost More Than a Renovation

Renovation vs remodel: What's the difference?

All of that means remodels are costlier than renovations. Here’s why.

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1. You May Need Permits

Renovation vs remodel: What's the difference?

Thanks to the extensive nature of most remodels, many cities require homeowners to secure a permit before they begin work, especially if the project involves creating an addition to the home, or if new walls or new roofs are being installed. This is to ensure that building codes are followed.

If you need permits, you will want to factor the time it takes to secure them into your timeline. Once the permits are approved, the project may begin. And once it is completed, it will likely need to be approved by a local inspector.

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2. You May Need Professional Help

Renovation vs remodel: What's the difference?

If your remodel requires electrical, duct, or plumbing work, you will likely need to hire a licensed professional to complete it.

You may also need to hire a general contractor to hire and oversee these workers and others for larger remodels like adding a guest suite to the home or converting an attic to a home office with an en-suite bathroom.

These vendors, while necessary, can be costly since you are paying for their time in addition to any materials.

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3. You May Be Dealing With Construction

Renovation vs remodel: What's the difference?

While it can be exciting to imagine what your home will look like after a remodel, getting there can be taxing. That’s because you may be living in a construction zone as the project is underway.

It can be difficult to have to eat multiple takeout meals because your kitchen is being worked on, or deal with dust from work being done in the next room over.

If their remodel is especially extensive, some homeowners find they need to rent a home nearby until the remodel has been completed.

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Paying for a Remodel or Renovation

Renovation vs remodel: What's the difference?

Whether you’re undertaking a renovation or remodel, you’ll want to have a budget and a payment plan. Some renovations are small enough that homeowners can pay upfront.

Those tackling remodels and larger renovations might tap a home equity loan or home equity line of credit, when the home is used as collateral.

An unsecured, fixed-rate home improvement loan is another option.

A cash-out refinance also can free up part of the difference between the mortgage balance and the home’s value.

Recommended: Home Equity Loans vs Personal Loans for Home Improvement

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The Takeaway

Renovation vs remodel: What's the difference?

Undertaking home improvements can be exciting for homeowners. But before you embark on a project, know whether you’re looking at a renovation or a remodel, how much inconvenience you’re willing to put up with, and what you are willing to pay.

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