We’re often asked how much should be budgeted for remodeling a kitchen? The answer, in our view, depends on what you plan to do with your home and over what time period. Some remodeling “experts” suggest your budget should not exceed a certain percent (e.g., 15 percent) of the current value of your home. While that may be a helpful guideline for someone planning to sell their home in the near future, it doesn’t apply to all situations.
To get started in setting a budget for your kitchen remodeling project, you’ll first want to answer the following questions:
- First and foremost, what are your plans for your home? If you purchased the home as a “fixer-upper”, remodeling may have been factored into the price you offered for the home. You may be planning to raise a family in the home or you may be designing the space for your retirement years. The house may be a starter home or it may be your dream home.
- Is the home a long-term or short term investment? If you plan to live in the home for more than five years you may want to add amenities that you will enjoy over time. If the home is a short-term investment and you plan to sell within five years, you will want to plan your project to appeal to prospective buyers.
- Is return on investment a primary concern for you? If so, you will want to maximize the home’s equity by considering recent sales of comparable homes in your area within your area, the price you paid for your home and the money you have already invested when budgeting for your project. For guidance look at the 2010-2011 Cost versus Value Report published by Remodeling Magazine. A minor kitchen remodeling project averages $22,325 and the return on the investment that you can expect is $15,241 or 68.3percent. The average cost of a major kitchen remodel $60,710 and the payback at resale would be $38,214, 66.8 percent. The average cost of an upscale kitchen remodeling project is $116,763 with a payback of $64,968, 55.6 percent.
- Do you plan on renting this home in the future? If this home is an investment property you should have an idea about how much you will charge a renter. Some of your investment can be recouped but you also will want to make a profit. Your remodeling project should address a renter’s basic needs as well as the period of time you can expect “payback” on your investment.
- What do you like about your kitchen? There may be items that you will want to use or salvage as you plan the project. Listing your likes and dislikes will also help you to determine a design for the space.
- What do you dislike most about your kitchen? The answer to this question will help you to decide what changes you will want to prioritize in planning a budget.
The next step is to set priorities for your project by determining “needs” and “wants”. Needs are the things that are essential purchases for your project. Wants are things that are desirable but optional to your plan and budget. Here is a checklist of items that typically are part of a kitchen remodel:
|New Lighting Fixtures|
|New Cutting/Chopping Surfaces|
|Waste Disposal System|
The final consideration is your timetable for the project. When do you plan to get started and when would you like to complete the project?
Answering the questions above will be helpful when you talk with a contractor or designer about your plans.