You’re finally ready to get started on your kitchen remodeling project! But how much should you spend on your new dream kitchen and can you afford it? Is remodeling your kitchen a wise investment? Should you do the floors, lights, and plumbing or just replace the cabinets and countertops? The answers to these questions will determine the success of your project, and in many cases, determine if it ever actually begins in the first place.
Industry studies suggest that a typical kitchen remodeling project budget should be between 10% and 20% of your home’s current market value. As a rule, well-planned projects in this price range can return up to 90% of the project cost when you decide to sell your home. For a home valued at $200,000, a good starting point for your budget would be $20,000 to $40,000 for a complete renovation, including:
- New cabinetry and countertops (About 50% of the total budget)
- New flooring (10%)
- New appliances (10%)
- New sink, faucet, and disposal (5%)
- Labor for removal and installation (25%)
But why is there such a big range – $20,000 this example – for a suggested budget?
Product selection plays a huge role in determining how much you will spend on your remodeling project. High-end manufacturers produce near furniture-grade cabinetry, but at a cost that is significantly higher than other grades. Similarly, countertop materials vary from inexpensive laminates, whose quality has greatly improved recently, to the ever-popular granite and the numerous solid surface options in between. Appliance packages will also have a fairly broad range of prices depending on the brands, the features and finishes that are selected. And finally, labor costs can vary widely in different parts of the country.
As you begin thinking about your budget, use the 10% to 20% rule as a starting point to clearly set the maximum you are willing to spend on your project. Then begin looking at the value of homes in your neighborhood and try to talk with friends that may have recently completed a remodeling project. Care must be taken not to price your home well out of the market by investing much more in your new kitchen than you can hope to get back if you were to sell.
This should allow you to come up with an initial budget that is somewhat less than your maximum. For example, the budget range for your $200,000 home would be $20,000 to $40,000, and you decide that $30,000 is your personal maximum. After talking with friends and considering neighboring home values, you could potentially set your initial budget at $25,000 for your project.
At this point, you are ready to begin gathering ideas on the styles and features that will be important in your new kitchen and preparing a list of “Needs”, “Wants”, and “Desires.” Along with your budget, you will finally be ready to start down the path to that new kitchen you have always dreamed of.