How much should you spend and where should you spend it? When it’s time for an update, kitchen remodel costs are no small thing. If I somehow spend $100,000, then my return is $75,000 to $100,000 which doesn’t make sense for most houses since a $100,000 bathroom would be a waste of money. An upscale kitchen remodel costs $125,721, with a 53.5 percent ROI. If you're considering a renovation, there's one question that's probably at the top of your list: "How much should I spend?" Remodeling spending is expected to approach $340 billion in 2018, a 7.5 percent increase over last year, according to Harvard's Joint Center for Housing Studies. Sit down with your contractor, be realistic about your budget and set a contingency line item for 20% of the projected costs. There's a big difference between renovating your own home versus renovating your investment property. Rachel Morgan Cautero and her husband, Mike, spent $40K to turn their first house into their dream home. Here are a few tips to help you budget for your renovation. As a home owner you should avoid taking risks when renovating and spend your budget wisely. They typically need a transformational makeover, which adds value to the property. As a home owner you should avoid taking risks when renovating and spend your budget wisely. So, roughly, how much can you spend on a renovation project? Renovations can transform our homes and create big profits. So if I spend $10,000 on a new bathroom, then my return is $7500 to $10,000. HomeAdvisor.com’s study on renovation costs puts the average cost of a multi-room renovation between $17,000 – $68,000. You might want to renovate your home to increase its value, to make it more energy efficient, or just for a change of look. This is to make sure you don’t spend more on the improvements than the value it will add to a property (overcapitalising). This depends on several factors ranging from how much you’re willing to spend on interior renovation fit-outs to the area the renovation is going to cover. Here's some tips. Firstly will it be a structural renovation or a simple cosmetic makeover? How much should you spend and where should you spend it? How much should you spend on your renovation? How much to budget for a renovation Homeowners should be budgeting at least 20% over the estimated cost of the renovation. If you’re considering a home remodeling project, you may be wondering how much you can afford to spend, or better yet, how much you should spend.. Home remodeling projects can be expensive and it’s not always clear if you’ll be satisfied with the results once the project is complete. Things like paint and carpet are relatively low cost, and can really change the look and feel of the home. Courtesy of Rachel Morgan Cautero. Renovation costs: How much should I spend? For instance, slab granite costs $40 to $75 per square foot, compared with only $10 to $40 per square foot for laminate countertops, according to home remodeling resource Fixr.com. Amy Hamilton-Chadwick Posted 21 January 2016 Renovations can transform our homes and create big profits Please note: this article was first published in November 2014.