How Do I Price My Remodeling Services Profitably?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 17
- 3 min read
If you're starting or growing a remodeling business, one of the most important questions you'll face is: How do I price my remodeling services profitably and competitively? Whether you're offering kitchen renovations, bathroom upgrades, or full home remodels, setting the right price can make or break your business.
In this guide, we’ll walk you through how to price remodeling services, key factors to consider, and how to protect your business with the right insurance coverage.
Why Pricing Matters in the Remodeling Industry
Pricing your remodeling services correctly ensures:
You cover your costs
You make a healthy profit
You stay competitive in your local market
You build trust with clients through transparency
Underpricing can lead to burnout and financial losses. Overpricing can drive potential customers to competitors. The goal is to find the sweet spot that reflects your value and expertise.
Step-by-Step: How to Price Remodeling Services
1. Calculate Your Costs
Start by understanding your direct and indirect costs:
Labor (your time and your crew’s)
Materials and supplies
Permits and subcontractors
Overhead (rent, utilities, software, marketing, etc.)
💡 Tip: Use job costing software or spreadsheets to track these expenses accurately. Tools like Jobber or Buildertrend can help.
2. Add Your Desired Profit Margin
Once you know your costs, add a profit margin. Most remodeling contractors aim for a 20%–35% profit margin, depending on the project type and market.
3. Research Local Market Rates
Check what other remodeling contractors in your area are charging. You can do this by:
Visiting competitor websites
Calling for quotes as a mystery shopper
Checking platforms like HomeAdvisor or Angi
This helps you stay competitive while justifying your pricing.
4. Offer Tiered Pricing Options
Consider offering Good / Better / Best packages. This gives clients flexibility and helps you upsell higher-value services.
5. Include a Contingency Buffer
Remodeling projects often come with surprises. Add a 10%–15% contingency to your estimates to cover unexpected costs. The National Association of Home Builders (NAHB) recommends this practice to protect your margins.
Common Pricing Models in Remodeling
Fixed Price: Best for well-defined projects. Clients like the predictability.
Time and Materials (T&M): Ideal for complex or evolving projects. You charge hourly plus materials.
Cost Plus: You charge the actual cost of the project plus a set percentage for profit.
Each model has pros and cons. Choose the one that fits your business style and client expectations.
Don’t Forget to Factor in Insurance Costs
As a remodeling contractor, insurance is not just a safety net—it’s a business essential. Make sure your pricing accounts for the cost of:
General Liability Insurance – Covers property damage or injuries on the job. Learn more from the Insurance Information Institute.
Commercial Auto Insurance – Protects your work vehicles and drivers. Read about commercial auto coverage from Progressive.
Commercial Property Insurance – Covers tools, equipment, and office space.
Workers’ Compensation Insurance – Required if you have employees. OSHA explains employer responsibilities here.
Equipment Insurance – Protects your tools and machinery from theft or damage.
Bonus Tips for Pricing Remodeling Jobs
Use estimating software like Houzz Pro or CoConstruct to streamline your quoting process.
Track your actual vs. estimated costs to improve future pricing accuracy.
Communicate clearly with clients about what’s included—and what’s not.
Final Thoughts
Pricing your remodeling services is both an art and a science. By understanding your costs, researching your market, and building in profit and protection, you can grow a sustainable and successful remodeling business.
At Wexford Insurance, we specialize in helping remodeling contractors like you protect your business with tailored insurance solutions. Whether you're just starting out or scaling up, we’re here to help you stay covered and confident.
👉 Contact us today.
