Remodel vs. Renovation: Which Is Right for Your Home?

If you want to invest in some changes in your home, you’re probably comparing two things: a remodel vs. renovation. But what’s the difference, and which one is the best choice for your property?

Put simply, a renovation involves repair and modernization, while a remodel involves changes to the home’s structure or floor plan. But that’s just a surface-level examination. To understand which option is best, we’ll have to take a closer look at both options, as well as their costs and benefits. Let’s get started!

What Is a Renovation?

The word “renovate” comes from the Latin word “renovatio,” which means “make new again.” In the Roman world, the word was often used for political causes, so some of the nuance has changed. Nowadays, when we renovate a property, we’re taking an old property and making it feel new.

A home renovation includes repairing, updating, or making safety upgrades to a property. For example, let’s say you decide to renovate your kitchen. You might reface the cabinets, replace the countertops, or update your 50-year-old plumbing and wiring. You might even go further and replace your old windows with newer, more energy-efficient windows.

Renovation has some major benefits when compared to remodeling. For one thing, you can work on one room at a time instead of doing multiple rooms at once. This makes it a better option for DIYers, since you can work during your free time and get the job done at your own pace. Not only that, but as we’ll see, renovations are significantly more affordable than remodels.

What Is a Remodel?

When you think about the word “remodel,” it’s pretty literal. You’re remaking your home according to a new model. So, where a renovation is a repair or a minor change or upgrade, a remodel literally reshapes the room or even the entire house.

Let’s go back to our earlier example of a kitchen renovation to understand the difference. Suppose we made all of those changes, but we also knocked out a wall between the kitchen and the living room to combine the two rooms. Then we move some of the cabinets to create an island, completely transforming the entire space. A job of this scope would be considered a remodel, not a renovation.

Essentially, a remodel is any job that alters the floor plan. Remodels can also involve changes that substantially alter the home’s style – for example, if you were to replace all your old plaster walls with sheetrock, that would be considered a remodel.

Remodels tend to be more expensive than renovations, and they involve a lot more work. That said, a remodel gives you the freedom to make changes you couldn’t otherwise make. You can add or combine rooms, change the home’s floor plan, or change its entire style. If you want to get the best use of your space, a remodel is often your best option.


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remodel vs renovation

Renovation vs. Remodel: Key Differences

Now that we understand the basics, we can talk about some of the major differences between renovations and remodels. Ultimately the differences come down to:

Let’s take a closer look at each of these factors.

Costs

Because remodeling can involve significant changes to a home’s physical layout, you often incur additional costs. For example, suppose you’re moving a wall two feet to the side. You don’t just have to frame up a new wall and apply the sheetrock, and you’ll have to move electrical wiring and potentially even plumbing and ductwork. And if it’s a load-bearing wall, things can get even more complicated.

By comparison, renovations tend to be less complex, so less overall work is involved. The work is frequently less complex, which means you can do a lot of it yourself.

Permits & Zoning Restrictions

Depending on your local zoning laws, there could be significant restrictions on the types of remodel you can perform. For example, you might not be allowed to add another story or build an addition within a certain distance from your neighbor’s house. Even more modest remodels can require permitting, which introduces delays and drives up your costs.

You’ll also want to see if there are any other restrictions on your home. For example, if you’re part of an HOA, there may be limits on your exterior paint color or the type of siding you use.

Return on Investment (ROI)

Because renovations are more affordable, they generally provide a better return on investment. Not only that, but renovations often involve upgrading some of the home’s basic features, such as fixtures and appliances, and this makes the home more attractive to buyers.

On the other hand, remodels often involve changes that are a matter of taste. Knocking out a wall to combine two rooms might make a lot of sense for your family, but it doesn’t necessarily add anything to your home’s value. After all, the square footage is still the same.

Tax Implications

Unlike the other things we’ve looked at, the tax implications of renovations and remodels are the same. However, whether or not your expenses are tax-deductible depends on whether this is an investment property or your home.

If you remodel or renovate an investment property, that’s typically considered a business expense and will be tax-deductible. Check with your accountant to be sure. On the other hand, renovations and remodels on your personal home are not tax-deductible.

Renovations Are More DIY-Friendly

Depending on how handy you are – and how much free time you have – a renovation can be a better option than a remodel. You can repaint your walls, install new windows, or even refinish your hardwood floors without spending more than the cost of material.

Remodels, on the other hand, require more skill and know-how. Unless you’re already a professional, you probably don’t want to install your own wiring or plumbing. And larger jobs like additions can require heavy equipment and the work of multiple laborers.

Remodeling Can Fix Poor Home Design

One thing a renovation won’t do is improve your home’s overall design. Some problems can only be solved by making a more radical change to your home. Let’s say your bathroom’s water supply lines run through an exterior wall, and they freeze every time it gets cold out. You’ll need to re-route those pipes through an interior wall, which requires some significant surgery on your home.

To be fair, this is the kind of issue you won’t see on a newer home. But if you’re trying to update an older home, some remodeling can be in order.

You Can Only Renovate Historic Homes

Some local and federal codes dictate what you can and can’t do with a historic property. For example, suppose your home is listed on the National Register of Historic Places. You’re not allowed to alter the floor plan, and repairs typically need to be completed with the same materials as the original. For example, if an interior wall is damaged, you’d have to repair it with plaster, not replace the wall with sheetrock. The only real exceptions are energy efficiency upgrades, such as installing storm windows over old single-pane windows.

Summary

Renovations and remodels are two sides of the same coin. It largely comes down to what you’re trying to achieve, and how much you’re willing to invest. If the home is an investment property, renovations represent a better return on investment. They also don’t typically require permits, and you can do most of the work yourself.

On the other hand, if you’re living in the home long-term, you should do whatever work you feel needs to be done. Even if a major remodel won’t generate big financial returns, the quality of life improvements alone could be worth your investment. Now you have all of the information you need to decide between a remodel vs. renovation for your property.


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