What is the 30% rule when remodeling?

Homeowners looking to begin remodeling or renovation projects around their home might stumble across something called the 30% rule when beginning their research. But what exactly is the 30% rule, and how does it apply to you?

Put quite simply, the 30% rule is a guideline for budgeting, where it is said that your total home renovation budget should not exceed 30% of the total value of your home. For example, a home valued at $200,000 would try to keep their remodeling budget under $60,00o. Now, as those of you who may have tackled renovation projects before know, budgets can be tough to stick to, especially when unexpected costs arise. So how firm really is the 30% rule? When should you follow it, and when can you push the envelope? Let's discuss.

Every home renovation project carries a small amount of financial risk. Are you going to open up a wall in your bathroom and find the plumbing needs to be re-routed? Perhaps the tile you picked for the kitchen floor doesn't quite match the backsplash as well as you imagined. Or maybe, once you're sitting down and looking at the catalogs, you find you like the finer fixtures much more than their cheaper alternatives. By setting a 30% budget, you can protect yourself from some of that risk, helping to keep in mind a maximum spending number for you to budget around. By preventing overspending, you prevent yourself from investing more into your home than it's worth.

The 30% rule can also help with prioritization. Since that 30% must cover all renovations you plan to do with your home, you are encouraged to focus on projects which in turn will add the most value.

All that said, there are still times when you should feel free to fudge the 30% rule a little bit. If you know you're in your forever home, and you're not looking to resell in the near future, then you should feel free to invest in creating your dream home how you wish. If a space is particularly special to you - for example, if you love cooking gourmet meals in the kitchen, or the bathroom is your personal spa oasis - then investing a little more on those projects could absolutely be worth a little extra.

In conclusion, while the 30% rule is a great guideline to rely on, don't feel as though you can't make your own decisions when it comes to budget and scope of your home renovations projects. And if you need a helpful hand to guide you, Oriole Home Renovations is always happy to help!