Advice for Planning your Remodeling Budget
When planning a kitchen remodel, creating a budget that aligns with your financial
goals and home improvement needs is crucial. The cost of a kitchen remodel varies greatly depending on the extent of the changes. Are you planning a minor update or a complete overhaul? The scope will dictate the scale of costs involved. I’m going to disappoint you right off the bat by telling you that I cannot give you accurate dollar amounts for your particular project in this article. But I can give you some tools to help you figure it out yourself. Here’s a comprehensive guide to help you navigate the budgeting process, including key factors to consider and a couple of budgeting rules of thumb that will help you.
Fixed vs. Variable Costs
Understanding the difference between fixed and variable costs is essential. Fixed costs in a kitchen remodel will be the same, no matter what types of materials you select. Construction expenses, plumbing and electrical labor, and flooring installation all remain constant regardless of the materials selected. In contrast, variable costs for finish materials can fluctuate based on quality and quantity. The most common variable costs in a kitchen renovation involve the selection of cabinetry, storage accessories, countertops, appliances, flooring, and backsplash materials.
The Cost of a Car Analogy
Consider the cost of a new car as a benchmark for your kitchen remodel. On average, a new car costs around $48,0000 but it varies based on the make and style of car, just like it would vary based on the particulars of your desired kitchen renovation. Here are some examples as of this writing (March, 2024): a new Kia can be as inexpensive as $25,000 but averages $32,000. A new Mercedes starts around $34,000 with an average price of $75,000. The idea is that you look at the type of vehicle you would likely purchase new, and budget a similar cost for your kitchen remodel. If you’re comfortable with this amount, it could be a starting point for your kitchen budget.
The Home Value Analogy
Another way to budget for your kitchen renovation is to base it on the value of your home now. Go to Zillow.com, type in your address, and see what value it spits out. There is a caveat though: if you have waterfront property or live in a condo, this is probably not going to be an accurate reflection of investment levels. It will generally skew much too high with waterfront properties; and condos tend to skew a little too low (unless it’s waterfront too).
Type of Kitchen Remodel Will Impact Your Budget
Zillow suggests spending no more than 15% of your home’s value on a kitchen remodel, but here are three types of kitchen renovation projects and the investment levels relative to your home’s value that I believe has been more realistic for me over the years, with a Before and After example in each category.
A. Refresh:1-10%
For basic updates like new paint or fixtures, or maybe replacing just the counters. Want to see what your kitchen would look like with a different color paint? You can play with Sherwin Williams’ Color Visualizer. Cambria’s AR app will allow you to snap a photo of your kitchen then swap around your countertop finishes on both Android and iPhone devices.
B. Replace: 10-15%
To replace cabinets, counters, and appliances without altering the layout or walls in any way. You might decide to work around your existing flooring in this scenario as well.
C. Redesign: 15-25% (or more)
For a complete kitchen transformation, including altering the layout or opening up walls.
Resale & The 7-Year Rule for Remodeling
If you plan to sell within seven years, you should really consider the return on investment (ROI). A minor kitchen remodel offers the best ROI, as it updates the look without overspending. Focus on style over substance. In other words, it’s probably wiser to spring for the nicer looking countertop instead of the storage accessories.
On the other hand, if you plan to be in your home for more than 7 years, focus more on the things that will make your life easier because by that time, style trends will change anyway.
Cost vs Value Report for Kitchen Remodeling
The Cost vs Value Report, created annually by the trade publication, Remodeling, provides insight into the average costs and resale value of kitchen remodels and other renovation projects for various parts of the country. For example, nationwide, a midrange major kitchen remodel costs an average of $77,939 but here in the southeast United States, those numbers look different. It’s a great tool to aide you in your budgeting process.
By considering these factors, you can create a budget that ensures a successful kitchen remodel without financial strain. Consult with professionals and use tools like Zillow’s budget calculator to refine your budget further. Visit Duncan’s Creative Kitchens for more resources and assistance.
Scott Duncan
Scott Duncan is a licensed interior designer with over 30 years of experience in kitchen and bath remodeling, as well as the owner of Duncan's Creative Kitchens.