How Much Does A Bathroom Remodel Cost?

Have you recently taken stock of your bathroom and realized that it no longer sparkles? Have you started to wonder whether it’s time to renovate, but are fearful of the costs and whether you’ll ever recoup those costs?

Bathroom renovations can be lavish and expensive, but they can also be modest yet impactful. In this article, we’ll break down the costs to help you decide how much renovation is right for you.

As you may have expected, the answer is: it depends on what you want to accomplish, where you live and how much work you can do by yourself.

Start With A Wish List And A Must-Have List

It’s easy to have grand plans for a space. But even for a small space like a bathroom, grand plans can still cost grand dollars. According to a report from the National Association of REALTORSⓇ, a complete upscale bathroom renovation can cost as much as $35,000.

On the other hand, just adding some new countertops, tiling and fixtures can make an old bathroom feel new. This type of renovation will cost substantially less. According to Remodeling.net, the cost of a mid-range bathroom renovation will run homeowners about $20,000, but again, that’s with all labor costs included. Doing at least some parts of the renovation yourself can save you a large portion of these costs.

The Budget Breaker: Changing Your Bathroom’s Footprint

While no two bathrooms are the same, you can pretty much count on all expensive remodels significantly changing the footprints of their homeowners’ bathrooms. If you want to move your shower from one wall to another, or install a bathtub in an area that doesn’t offer a plumbing hook-up, it’s going to be a major expense, particularly if your bathroom is on the second floor of your home.

To find out how much this type of remodel will cost, your best bet is to meet with a contractor who can take a look at your home and its plumbing and give you an estimate of the ultimate cost.

According to HomeAdvisor.com, materials for your bathroom renovation run about 50% of your total budget, with labor taking up the other 50%.

Materials Costs

Of course, if you choose custom materials, the prices will tend toward the higher end, while choosing your materials from a big box store will keep you on the lower end of the price range.

Labor

If you can do the bulk of the work yourself, you’ll save a ton of money – but you should know your limitations. Skilled labor costs more because the finished product is superior to most DIY efforts.

Particularly in the bathroom, you don’t want to skimp on plumbing or tile work if you aren’t already skilled at this work. If done incorrectly, bad plumbing will haunt you in the form of water damage for years to come. Looking to scratch a DIY itch? You can certainly paint or do some demo work to reduce costs.

It’s easy to focus on the costs of a project you’re thinking of undertaking, but it’s important to remember that home remodeling can add to the value of your home. That means that some of your actual costs will be reimbursed to you at a later date, when you sell the home.

Resale Value

Our homes are generally our biggest financial asset, and it’s important to maintain and improve them to protect the value of that asset. An increase in resale value attributed to the renovation is what’s known as the return on your investment, or ROI.

According to NAR and remodeling.net, you can expect your home’s value to increase between 57% and 64%. That’s money that will go back into your pocket when you decide to sell. In the meantime, you get to enjoy the fruits and personal comfort of your investment.

Tax Benefit

Although our primary residence doesn’t enjoy the same tax benefits as a real estate investment property might, one important tax consideration is that capital improvements to your property increase your cost basis in your home. If you bought your home 20 years ago for $200,000, and you resell it in this tax year for $800,000, you’ll have a realized capital gain of $600,000. Here’s how we figured that:

$800,000 (sales price) − $200,000 (cost basis) = $600,000

If you’re an individual taxpayer, you’ll be able to claim a $250,000 exemption, and if you’re married and filing jointly, you’ll be able to claim a $500,000 exemption:

Applying either a 15% or 20% tax rate on the capital gain, the home seller could face a tax bill as high as $70,000 on this sale.

One way to lower that bill – and increase your enjoyment of your home – is to reinvest in your home on a regular basis. Remember that $35,000 upscale bathroom remodel? That expenditure is added to the cost basis of your home, which then reduces the amount of your capital gain when you sell.

In the meantime, you’ll be soaking in that infinity tub.

Home renovation projects can be costly, but those costs are also investments in the future resale value of your home, and you’ll be getting a significant reimbursement down the road. Ready to get started? Apply for a personal loan today.