Renovation vs. Remodel: What's the Difference?

The terms renovating and remodeling are often used interchangeably. But to housing professionals, they are different. Both involve physical changes to a property, but they differ in cost and types of construction involved.

If you're thinking about changes to your home or buying one to fix up or flip, it can be helpful to know which one your project is so you can estimate the scope and cost.

What's the Difference Between Renovation and Remodeling?

Renovations typically involve some restoration work. For example, you might repaint the walls or cabinets or replace fixtures or hardware. You could update old or outdated items. Renovations are work that revives a room or home but doesn't change the layout. They also may be used to add value to a home before you list it for sale. Because of this, renovations are often small-scale projects.

On the other hand, remodels include changes to a home's structure or layout. They function to transform a home rather than update one or two rooms. They often involve changing the use of space (or many spaces at once).

Renovation vs. Remodel Examples

Examples of common renovations include:

• Repainting
• Refacing cabinets
• Installing new light fixtures
• Replacing windows
• Updating appliances
• Adding new hardware
• Replacing tiles or flooring
• Replacing outdated systems

Examples of common remodeling projects include:

• Combining two rooms into one
• Installing a kitchen island
• Removing walls
• Raising ceilings
• Changing the layout of a room

Which Costs More?

Renovations can range significantly in price depending on the project. The price also depends on how much of the house you're renovating and how old the home is. In most cases, a renovation will be a less expensive choice than a remodel.

Because remodels are more involved than renovations, they tend to cost more. You might require more professional help than you would in a renovation. This help could be from experts such as architects, electricians, or plumbers. On top of this, many remodeling projects require permits, which can add even more costs.

Here are the major factors you'll need to take into account when gauging the costs of a remodel or renovation:

• Materials (wood, flooring, paint)
• Labor, contractor, and consulting fees
• Permits (if required)
• Appliances, fixtures, cabinets, and hardware
• Size of the space being renovated or remodeled
• The age and condition of the home

Which Is Right for You?

It can be tough to decide whether to renovate or remodel your home. You'll want to account for your budget (what can you afford and how will you cover the costs), time (how much do you have and when you want the work finished), and your final goals for the property.

If you're looking to update a few aesthetic areas or increase the value of your home in time for a sale, a quick renovation may be your best bet. If you're going to live in the home and aren't happy with the look or some functional aspects, a full remodel may be in order.

Picking the Right Projects

No matter which you choose, it's important to consider the potential return of the investment. This is especially true if you're looking to increase the home's value or resale potential.

According to Remodeling Magazine's 2021 Cost vs. Value Report, the highest-ROI home projects include:

• Garage door replacement (93.8% of costs recouped)
• Stone veneer siding addition (92.1% recouped)
• Minor kitchen remodel (72.2% recouped)
• Siding door replacement (68.3%–69.4% recouped)
• Window replacement (67.4%–68.6% recouped)
• Deck addition (63.2%–65.8% recouped)
• Steel entry door replacement (65% recouped)
• Fiberglass grand entrance (60.9% recouped)
• Asphalt shingle roof replacement (60.7% recouped)
• A mid-range bathroom remodel (60.1% recouped)

A project that adds the most resale value (in terms of total dollar value) is a master suite addition, which adds an average of between $85,672 and $152,996 to your home's value. Likewise, a major kitchen remodel can add $80,284 on average. Bathroom additions and remodels can also add a large amount of value to your home.

The Bottom Line

The choice between a remodel and a renovation comes down to cost, need, want, and return. You'll have to compare each factor to what you want to do and the condition your home is in. The timing also has to be just right because you don't want the project or your life to be interrupted at the wrong time. Before you decide on which is right for you, be sure you know the ultimate goal for your project and what you'll get back from it in value, function, or both.