What Is the 30% Rule in Remodeling?

A Dream Custom Carpentry Blog

The “30% rule” in remodeling is a simple budgeting guideline. It suggests that you should try to keep the total cost of a remodel at 30% or less of your home’s current value.


People use this rule as a quick way to decide whether a project makes financial sense.

How the 30% Rule Works

Let’s say your home is worth $500,000. According to the 30% rule, you might try to keep a large remodel under $150,000. The idea is to avoid putting more money into the home than the market can support.


For example, if most homes in your neighborhood sell between $450,000 and $550,000, spending $250,000 on a kitchen and bathroom remodel may not raise your home’s value enough to match that investment.

This rule is most often used for major projects like:


  • Full kitchen remodels
  • Whole-home renovations
  • Large additions
  • Basement finishing projects

Why Homeowners Follow This Rule

The main reason people use the 30% rule is to protect resale value. Remodeling can improve how a home looks and functions. But if you spend too much compared to what similar homes sell for, you may not get that money back when you sell.

It helps homeowners pause and ask:


  • Am I improving my home beyond what buyers expect?
  • Will this remodel match the neighborhood?
  • Does this budget make sense for long-term value?

When the Rule Makes Sense

The 30% rule is most helpful when resale is a top priority. If you plan to move in a few years, keeping your remodel within a reasonable range can help you avoid over-improving.


It also helps when you are choosing between different levels of finishes. For example, you may decide between:


  • Custom cabinets vs. semi-custom
  • Luxury countertops vs. mid-range materials
  • Basic updates vs. a full redesign


In these cases, the rule can guide you toward smart choices.

When the Rule May Not Apply

The 30% rule is not a strict law. It is just a guideline.

If you plan to stay in your home for 10 or 20 years, comfort and function may matter more than resale value. If your kitchen layout does not work, or your basement is unfinished and unused, improving those spaces can make daily life much better.


In some cases, a remodel solves real problems, such as:


  • Poor layout
  • Outdated plumbing or wiring
  • Lack of storage
  • Wasted basement space

When a remodel improves how your home works for your family, the value goes beyond resale.

Storage Should Be Planned Early

Instead of treating the 30% rule as a hard limit, think of it as a starting point. A better plan is to:


  • Set a budget that fits your finances
  • Understand what homes in your area are worth
  • Focus on upgrades that improve both function and appeal
  • Choose materials that match your home’s price range

Talking with a remodeling professional can also help you understand what makes sense for your specific home and neighborhood.

At Dream Custom Carpentry, we help homeowners across the Front Range plan kitchen remodels, bathroom upgrades, and basement finishes that balance cost, comfort, and long-term value.


Whether you want a modest update or a larger renovation, the goal is to create a space that works well for years to come—without overspending beyond what makes sense.

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