The number one reason renovations go over budget isn’t material costs — it’s poor planning. Every renovation budget, regardless of size, breaks into the same categories. The percentages shift by project type, but the structure doesn’t.
| Category | % of Budget | What It Covers |
|---|---|---|
| Materials & Fixtures | 40–50% | Cabinets, countertops, tile, flooring, hardware, appliances, fixtures, paint |
| Labor | 30–40% | Demolition, framing, plumbing, electrical, drywall, tile setting, painting, installation |
| Design & Engineering | 5–10% | Architectural drawings, structural engineering, interior design, 3D renderings |
| Permits & Inspections | 2–5% | Building permits, plan review fees, required inspections, HOA applications |
| Contingency | 10–20% | Hidden damage, material price changes, scope adjustments, weather delays |
The contingency line is not optional. Homes built before 2000 should budget 15–20% contingency. Newer homes can get away with 10–15%. If your contractor tells you that you don’t need contingency, that’s a red flag — experienced contractors know there’s always something behind the walls.
Your total renovation spend shouldn’t exceed 20–25% of your home’s post-renovation value if you plan to sell within 5 years, or 30–35% if you’re staying long-term. In Metro Atlanta, where median home prices sit around $400,000–$450,000, a reasonable resale-conscious budget tops out around $80,000–$112,000. In South Florida, where medians are higher, budgets can scale accordingly.
Cash is simplest, but most homeowners finance some or all of a major renovation.
| Option | Rate Range | Best For | Watch Out For |
|---|---|---|---|
| Home Equity Loan | 7–9% fixed | Defined budgets with predictable payments | Your home is the collateral. Closing costs add 2–5%. |
| HELOC | 7–10% variable | Phased projects where you draw as needed | Variable rates mean payments can increase. Draw period limits. |
| Cash-Out Refinance | Current market rate | Only if your existing rate is higher than market | Resets your mortgage. Closing costs can be significant. |
| FHA 203(k) | FHA rates + MIP | Buying a fixer-upper (bundles purchase + renovation) | Strict requirements, approved contractors only, longer process. |
| Personal Loan | 8–16% | Small projects under $25,000 | Higher rates. No tax deduction. Shorter terms. |
| 0% Contractor Financing | 0% promotional | Short-term projects you can pay off in 12–18 months | Deferred interest can spike if not paid in full by deadline. |
The Consumer Financial Protection Bureau provides neutral guidance on comparing home loan products. Always get loan estimates from at least two lenders before committing.
Licensed in Georgia and Florida with over 15 years of experience, Bowser Construction Group provides detailed line-item estimates, milestone-based payment structures, and dedicated project management on every job.
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