Setting a Realistic Budget for a Kitchen Renovation
Have you ever had to set a realistic budget for a kitchen renovation?
A Realistic Budget Reduces Your Stress
Creating your dream kitchen is an exciting endeavor. It can be stressful too. If you’re going to be starting one soon, make sure to read our article on keeping your sanity during a kitchen renovation next.
Careful upfront planning with a good contractor will reduce worry, however, especially when it comes to the project budget. You need to make sure the funds necessary to complete the job, including contingencies, are available throughout the project in order to avoid delays and frustration.
Take Advantage of In-home Quotes on Services and Materials
Getting in-home quotes are the first essential step in planning your budget. The contractor must see the existing kitchen and home structure to make an accurate estimate of costs.
Don’t get caught up on budgeting based on an estimate given over the phone- even though most people don’t want to open their home up to a contractor if they don’t have to, it could make the difference between having the money to cover your expense, or going way over budget.
Talk over the design in detail to ensure that you and the contractor are both on the same page relative to goals, finishes and expectations. Ask the contractor to bring catalogs or product samples so that you can compare costs and features. Take advantage of their experience to find ways in which the design could be tweaked to save money or increase functionality.
Always Expect the Unexpected Once Work Begins
It is rare that a large renovation project proceeds exactly as planned, especially when you’re planning a full overhaul of your space. Surprises, such as dry rot, mold, subpar construction, unseen wiring or plumbing, may be revealed during the initial tear out. These situations are common in renovations; they need not be a major concern.
If you’ve done your homework choosing a great contractor, they will be able to suggest ways to deal with these problems.
Make Room in Your Budget for Contingencies
Photo credit to
Andrea Travillian under cc2.0
Good contractors do their best to stay on budget. A detailed quote at the start mitigates the possibility of cost overruns, but the homeowner should be prepared financially to handle them quickly. A 10% backup fund for a full kitchen renovation will put your mind at ease and reduce pressure from delays.
Consider the Best Ways to Fund Your Project
The worst thing that can happen during your renovation is to run out of funds mid-way through (or spending way more than you can realistically afford). Plan to have enough money ahead of time to pay the entire cost. You can pay for it from savings, by borrowing, or a mix of these two.
If you have equity in your home, consider a home equity line of credit. With a line of credit, you can acquire funds as needed instead of borrowing a lump sum upfront. The interest on equity lines of credit is often tax-deductible too. Keeping a backup credit card specifically for your project is also a good way to fund unexpected costs immediately. Have a plan to pay off the balance monthly to avoid high interest rates.
Kitchen Renovations Are One of the Best Ways to Add Value to Your Home
It is well-known among real estate professionals that the highest increase in home value comes from kitchen and bath renovations, assuming that the house is otherwise sound. Typically, a recent kitchen remodeling returns 70 to 100 % of its cost at the time of resale even several years later. Do not expect to recoup the full costs of high-end finishes and fixtures, however, if those are well above what is common in your neighborhood.
For most people, resale value is not their top priority. You want to create a kitchen that works for you both functionally and aesthetically. If you focus on those goals and plan the project carefully from the start along with a sound budget plan, you are sure to end up with a kitchen you can enjoy for years to come while keeping your blood pressure at normal levels.