I’m sure you have heard the terms remodeling and renovation used interchangeably, but actually, they are two different home improvement styles.
While you might think that’s splitting hairs, it matters because each has its challenges, costs, benefits, and potential pitfalls.
Here is a quick comparison to help you decide which one works best for you when adding square footage to your home.
Remodeling Is done to correct a problem, change the layout of a space, or upgrade building systems. These are long-term projects that usually require you to live elsewhere while they are underway. After all, this isn’t your average home improvement project.
Remodeling could be adding windows and more light or removing a wall to open up the space. It might be adding an en suite bathroom and reconfiguring where your bedroom and closet are located.
While making these changes will give you more living space, it won’t increase the value of your home as much as adding on or expanding does—or at least that’s what real estate experts say.
Renovation is a short-term project that might include changing the color of your walls or putting in new flooring, countertops, and appliances. As opposed to remodeling, it doesn’t require you to move out.
These projects usually have a more immediate impact on the value of your home because they bring things up to date and make your home look modern and stylish.
Remodeling your kitchen will make it “look like new” in terms of design, but even though you might consider both renovations and remodels to be major projects, they are two different things.
Renovation is the right style for you if you want to add more space or a second bathroom instead of the kitchen upgrade.
Which costs more?
Remodeling projects cost more because they take a long time and might require you to live elsewhere while your home is under construction.
In general, renovations take less time and don’t add much resale value because the changes are not as dramatic. The price you pay for that speedier project depends on the extent of the work that needs to be done.
In most cases, both remodels, and renovations are subject to change orders additional expenses due to the discovery of problems that weren’t visible or anticipated at the start of either project.
For that reason, you might want to budget for an additional 10% above the initial contract price. It’s always better to have some wiggle room, whether it’s with your finances or your timeline, so you can respond to surprises that inevitably occur.
What are the types of remodeling contractors offer?
Here are some of the most common remodel projects that Denver contractors work on:
You might want to add a walk-in tub, reconfigure the layout, and upgrade the plumbing and lighting. These projects require professional experience to make dramatic changes in your home without running into problems later on.
These projects involve tearing down walls, reworking electrical and plumbing systems, and adding a second sink, dishwasher, and plenty of countertop space.
Whether it’s turning this underused space into more living or storage areas, basements are challenging to renovate because water is often a problem. There are all kinds of needs for basement remodels ranging from finishes like tile flooring to mechanical systems.
Decorative touches like landscaping, fencing, and stamped concrete can be part of exterior remodels or stand independently. These projects usually involve tearing down old structures and putting up new ones to make the exterior of your home look more modern.
These projects are all about overall renovations to the existing structure. Think new paint, flooring, and more light. Most of these items can be handled by homeowners without professional help, but there is still some risk that you might alter things in ways that make your home less valuable (i.e., removing historic woodwork).
How do I find reputable remodeling contractors near me?
Finding remodeling companies in Denver is easy. When you need them, they are right at your fingertips. But how do you know which contractors are reputable? And what are the warning signs of a shady contractor?
Here’s some advice on finding the best possible company for your project:
- Save yourself some time and check out their online reviews. Go to sites like Google, Yelp, Angie’s List, and Houzz. Look for reviews that mention timeliness, communication, customer service after the sale, etc.
- Ask your colleagues or friends if they have any recommendations for electricians, or other local contractors trusted in the community. Please do this even for home remodeling projects because their insight can help you find a contractor who understands your specific needs and will make the process as smooth as possible.
- Check with the Better Business Bureau to see if any complaints have been filed against the company. Unfortunately, even companies that do everything right from time to time fall short of expectations. If their track record with customers isn’t stellar, it’s best to go with someone else.
- Get answers about their approach to making changes during your project. Do they offer comprehensive estimates that include everything you can expect? Or will there be extra fees for random items along the way? Will they return your calls on time when you have updates or questions? If not, look for another company.
- Are they willing to put their quality of work on the line with a warranty? Can they provide references that vouch for their reliability and quality of work? If you are not satisfied with the answers to these questions, go with someone else.
- Get an in-home estimate from your top few choices (they all have to be in writing). Ask about their approach to the job and what you can expect. Make sure that they listen to your needs and then explain how they plan to meet them. If you aren’t comfortable with what you hear, keep looking.
- Finally, ask for a bid from at least 2-3 contractors before making your decision. Make sure to ask about which items are included and if there will be any surprises down the road.
All home remodeling contractors should also provide a timeline for your project and stick to it as closely as possible. They should also want you to sign off on the work they do before starting any project, just in case anything needs to be changed or improved (for example, if they notice some faulty wiring while doing the drywall).
Make sure that you communicate with your contractor throughout the project. If something goes wrong and you don’t feel like they’re taking responsibility, find someone else to finish your job.
Similarly, make sure that you provide them with clear instructions for what needs to happen and that you’re happy with the results. Let them know how much notice you need to get the job done right before your contractor schedules their team for work on your home.
Home Renovation Are Important
It is essential for people looking to get their home renovated to understand that there are many things they need to allow the contractor to do.
Houses need remodeling just like any other product of human engineering.
Homes need renovation because they will often deteriorate over time due to wear and tear, weather, pests, etc. The effects of renovations on the market price of a house can be unpredictable.
Homeowners who decide to renovate their property should also take steps not to depreciate their home’s value. They should find out the average cost in the area to know how much they will stand to gain or lose on this type of deal.
Home renovation costs can depend on a lot of factors. These include geographical location, type of renovation being done, and the extent of work being done, among other things.
Is a home renovation tax-deductible in the US?
The US federal government allows homeowners who renovate their homes to deduct the cost of renovations from their annual taxes.
However, this deduction is limited and can only be taken by those whose renovations add value to their home equal to or greater than the expenses incurred in carrying out the renovation work.
It should also be noted that if a homeowner spends money on renovations that reduce the value of their home by an amount greater than the renovation expenses they are up to, these expenses cannot be deducted from their income tax.
When a homeowner decides to finance a renovation project through a loan, they may use the loan interest paid as part of the cost of their renovation. It too can be deducted from the amount of income tax they owe.
For more information on how the financing of your renovation project affects your ability to claim deductions, speak with your CPA.
Lastly, it should also be noted that while renovations that increase the value of a home are deductible, this does not mean that you should live in a home for only a few years and then tear it down to make renovations. There is a risk of being audited by the Internal Revenues Services (IRS) if this happens.