“If you think good design is expensive, you should look at the cost of bad design.” – Ralf Speth, Former CEO of Jaguar Land Rover
Whether you’re a property owner or manager, you know that every dollar spent on a renovation should add value. But let’s be real: underestimating costs is one of the biggest pitfalls in the renovation game.
Unexpected expenses, material price fluctuations, and labor costs can quickly derail your budget. That’s why having a clear, structured approach to calculating renovation costs is key. Instead of guessing or hoping for the best, let’s break it down into a simple 6-step process that will help you plan smart, avoid surprises, and stay on track.
What Affects the Cost of Apartment Renovation?
Renovation costs can feel like a black hole — money goes in, and sometimes it’s hard to know exactly where it all went. But if you break it down into key factors, budgeting becomes a whole lot easier. Here’s what to consider when estimating renovation costs.
1. Apartment Size – The More Square Footage, The Bigger the Bill
It’s no surprise — the bigger the apartment, the higher the renovation cost. Many contractors use a cost-per-square-meter approach for estimates, but the final price depends on materials and finishes. If you’re going for high-end materials, expect a higher price per square meter. The key here? Set a clear price range per square meter based on your expected finishes to avoid budget blowouts.
2. Condition of the Apartment: Quick Touch-Up or Full Overhaul?
When a tenant moves out, the condition they leave the apartment in can significantly impact your next steps — and your profits. If the last renovation was recent and the wear-and-tear is minimal, you might get away with a quick refresh — a fresh coat of paint, minor repairs, and a deep clean — to minimize vacancy time and get new tenants in fast.
But if the apartment shows heavy use — damaged floors, outdated fixtures, or visible wear from long-term renters — it might need more than just cosmetic fixes. A neglected property can lead to longer vacancies and lower rental value, forcing you to invest in bigger updates before listing it again.
Want to maximize rental income? Strategic renovations — like upgrading kitchens and bathrooms or modernizing finishes — can justify higher rent, attract better tenants, and boost long-term ROI. The key is knowing when to invest in a full upgrade and when a quick turnaround will do the job
3. Materials: Premium Finishes = Premium Price Tags
Materials can make or break your budget. Whether it’s wallpaper, paint, tiles, or flooring, the choices you make directly impact both material and labor costs. Imported or natural materials often require specialized installation, meaning higher labor fees.
If you’re managing multiple units or a large renovation, balancing cost vs. durability vs. aesthetics is crucial to staying on budget.
4. Building Condition: New vs. Old = A Whole Different Ball Game
Renovating in a newly built apartment is generally easier and cheaper — straight walls, new plumbing, modern infrastructure, and even an elevator to move construction debris.
Older buildings? That’s where costs start climbing. Think uneven walls, outdated plumbing, structural surprises, and hidden damage. Sometimes, you’re not just renovating an apartment — you’re undoing decades of wear and tear.
6 Steps To Estimate Residential Renovation Costs
Renovating a rental property (or any residential unit) isn’t just about making it look nice — it’s about maximizing return on investment (ROI), minimizing vacancy time, and avoiding financial surprises.
Here’s a step-by-step breakdown to help you plan smart, avoid unexpected costs, and get the best value out of your renovation.
#1. Define the Type of Renovation: Quick Fix or Full Overhaul?
First things first — how much work does the place actually need?
- Cosmetic Upgrades (Cheaper & Faster): If the walls are straight, floors are solid, and major systems (electrical, plumbing, HVAC) are in good shape, you’re looking at a light renovation — new paint, flooring, updated fixtures, and maybe some modern finishes to boost the appeal.
- Major Renovation (More Time & Money): If plumbing leaks, outlets spark, floors creak, and drywall is cracked, you’re in for a full-scale remodel. This means rewiring, replacing pipes, fixing structural issues, and redoing all finishes — a much bigger (and pricier) project.
- New Construction Units (No Demo Needed): If you’ve just bought a newly built apartment, you don’t have to worry about tearing things down — your focus will be on finishing materials and design choices.
💡 Pro Tip: If you’re renovating a rental, always balance upfront costs vs. long-term ROI — overspending on luxury materials won’t always translate to higher rent.
#2. Measure the Space: Size Drives Costs
As we mentioned earlier, renovation costs are largely determined by square footage. So before reaching out to contractors, it’s important to know exactly how much space you’re working with.
- Floor Area: Multiply the length by the width of each room to get the total square footage.
- Walls: Add up the length of all walls in a room and multiply by the ceiling height.
- Ceiling: Usually the same as the floor area unless you have vaulted ceilings.
- Don’t Forget to Subtract Windows & Doors!
- Once you have these numbers, you can start calculating materials and labor costs per square foot.
💡 U.S. Price Range for Renovations [2025 Estimates]:
Basic Renovation: $50–$100 per sq. ft.
Mid-Range Upgrade: $100–$250 per sq. ft.
High-End Remodel: $250+ per sq. ft.
#3. Get Estimates for Labor & Work
You have two ways to estimate labor costs:
DIY Research (Time-Consuming but Cheaper)
- Make a list of all the work needed (painting, flooring, plumbing, electrical, etc.).
- Look up contractor rates in your area—labor is often charged per square foot, per hour, or per unit (e.g., per door, per sink, etc.).
- Get at least three contractor quotes to compare pricing.
Hire a Contractor for a Full Estimate (Easier but Costs More Upfront)
- Many contractors offer free estimates or charge a small fee to create a detailed renovation plan.
- A professional estimate can help you avoid hidden costs or surprise add-ons later.
- If you’re hiring a contractor for the job, their detailed estimate can serve as the final contract price.
💡 Labor Cost Averages in the U.S. [2025 Estimates]:
General Contractors: $50–$150/hour
Plumbers & Electricians: $75–$200/hour
Painters & Flooring Installers: $25–$75/hour
#4. Price Out Materials
Now, let’s talk materials — because this is where budgets often spiral out of control. What to Consider:
- Paint, flooring, fixtures, and finishes – These vary widely in price based on quality and brand.
- Luxury vs. cost-effective alternatives – Marble countertops look great, but quartz or butcher block might be a better value for rentals.
- Bulk discounts – If managing multiple units, buying in bulk can save thousands.
- Don’t forget the small stuff! – Outlets, light switches, door handles, and trim all add up.
💡 U.S. Material Costs [2025 Averages]:
Paint: $20–$60/gallon
Flooring: $3–$12/sq. ft. (laminate), $5–$15/sq. ft. (hardwood)
Kitchen Cabinets: $2,000–$10,000
Bathroom Remodel: $3,000–$20,000
#5. Account for Hidden Costs & Add a Buffer
Renovation budgets always have surprises. To avoid going over budget, set aside at least 20-30% as a contingency fund for things like:
- Unexpected repairs (e.g., mold, water damage, structural issues)
- Permit fees (varies by state and city)
- Delivery, disposal, and cleanup costs
- Temporary housing (if renovating a primary residence)
💡 Pro Tip: The older the building, the more likely hidden issues will pop up — always budget extra for unforeseen costs.
#6. Use Renovation Estimating Software (The Easy Way)
Instead of doing all this math yourself, use a renovation estimating tool to streamline the process.
How These Solutions Can Make Your Life Easier?
- Get Instant, Accurate Estimates. These tools use real-time market rates for labor and materials, so you can get a precise estimate in minutes.
- Avoid Overpaying or Underbudgeting. It’s easy to underestimate costs and end up with surprise expenses. These platforms help you plan a realistic budget so you don’t run out of money halfway through a project.
- Compare Costs Before Hiring. Instead of relying on a single contractor’s quote, you can compare industry-standard pricing to make sure you’re getting a fair deal.
- Simplify Project Management. Some tools go beyond estimating and help with scheduling, tracking progress, and even communicating with contractors — all in one place.
- Ideal for Property Managers & Investors. If you’re managing multiple units or flipping properties, having a streamlined system for cost estimation and budgeting is a game changer.
How RenoQuest Can Improve Budget Accuracy by 40%
With better cost tracking and real-time insights, you can plan smarter, reduce waste, and keep projects on budget — whether you’re managing a single property or multiple renovations.
- Monitor expenses in real-time – Know exactly where your money is going and adjust before costs spiral.
- Compare actual costs vs. budget – Stay on track by tracking spending against your initial projections.
- Get a clear view of multiple projects – Consolidate expenses across your entire portfolio for better financial oversight.
- Align budgets with your accounting structure – Customize cost categories to match how you manage finances internally.
See how RenoQuest simplifies your renovation budget estimating and tracking — start your 14-day free trial and feel the difference yourself!