Renovation v Remodel: Which one does your property need?

Renovating and remodeling are often used interchangeably when investors want to make improvements in their home, but the terms’ meanings are a world apart for contractors and building professionals. Which of the two is actually suitable to your investment plan?

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What’s the difference?

While both renovations and remodelings alter parts of the home and ultimately raise the asset’s value, the processes involved, professionals to engage and costs to shoulder are different.

Essentially, a renovation entails restoring buildings and houses that have declined to a state of disrepair. Renovation projects could range from subtle cosmetic changes to major structural repairs.

When renovating, you generally:

  • Renew the space with new fixtures and fittings
  • Update the existing structure
  • Improve the aesthetics of the room

Some of the most common renovation projects are repainting, installing new light fixtures, adding finishes and fixtures, retiling and refacing cabinets.


While the more extensive projects can be mistaken for remodeling, renovations typically focus on restoration and repairs on existing structure. In other words, renovation projects aim to make the old seem new again.

On the other hand, a remodeling entails a changing of structure and form. Unlike renovations, it focuses on altering the appearance, structure or function of a space in the house.

When remodelling, you generally:

  • Change the structure and use of the space
  • Improve the functionality of the home
  • Give the space a new look and feel

Remodelings significantly affect the existing design or layout of the room or even the overall floor plan of the house. Essentially, they work to transform the space or expand its use rather than merely update it.

For instance: In a kitchen renovation, you may replace the cabinets and add stainless steel appliances and granite countertops. In a kitchen remodeling, you may combine the kitchen and the living room to create an open kitchen layout.

Due to more complex and extensive construction and design requirements, remodelings usually cost more and takes up more time than renovations.

Why is it important to know the difference?

Aside from the varying costs associated with renovations and remodelings, there are also several factors to consider when picking between a renovation and a remodel. These include:

  • Probable sale price/revaluation range
  • Target market
  • Budget allocation

Contractors, builders and other tradesmen have different understandings of renovation and remodeling. To be able to communicate your expectations in the best way, it’s critical to be accurate when explaining the steps of the project.

Chances are, there will be a specific set of experts for your needs. Remodelings are likely to require contractors, architects and building engineers while simple renovations will only need an experienced handyman or home repair expert. Conversely, you might even be able to DIY some of the simpler aspects of the project and consequently, save money.

Moreover, if you’re planning to put your home up for sale or for rent, renovation and remodeling will have different implications on your asset’s value as well as the demand for it.

Attracting buyers that aren’t part of your target market will be a waste of time and resources. Imagine setting up meetings or entertaining them in an open house only to find out that they aren’t interested at all in the property — they just misinterpreted your listing.

Which one do you need?

The first thing to consider when choosing between doing a renovation or a remodel is your budget for the project. Both projects will entail hundreds to thousands of dollars, but which one will result in a resale price or rental rate that will get you your money back and more?

When determining your budget, factor in the price of your home and all ongoing costs, compare the potential expenses related to renovating and remodeling and make sure that you can leave room for buffers for any unexpected costs.

Investors usually prefer renovations over remodelings due to its high price, but in some cases, making extensive changes to your home might result in a more positive long-term added value.

If you’re still torn between the two after taking your budget, design plan and investment goals into account, remember that it’s not necessary to pick just one. There are investors who have chosen to renovate one part of the house and remodel the other.

For instance, for the kitchen, you can simply remove and replace the sink, countertops and finishes, upgrade the flooring, add new equipment and repaint the walls, while for the bathroom, you can add a wall and split the room into two, extend the room next to it and essentially create a new bathroom.

Having said that, it’s important to be able to determine how the project will contribute to your long-term investment plan. Will the decision not be detrimental to your other properties’ cash flow and capital growth?

At the end of the day, the main goal is to maximise the benefits of the renovation and remodeling and ultimately increase the value of your whole portfolio — all without overcapitalising. 


The information has been sourced from Domain,, Northfield Construction and the Smart Property Investment website.

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