The Expense of Kitchen Design

Without a carefully planned out budget, an out of control kitchen remodel or design can quickly turn into a financial nightmare.  According to the National Association of the Remodeling Industry (NARI), an upscale kitchen remodel or redesign can cost as high as $82,000.  However, how much you spend on a kitchen remodel depends on several factors such as whether or not you will be replacing your cabinets or simply refacing them, or the quality of counter tops, lighting, flooring, as well as the appliances you will be installing. 

Before you pull out your checkbook or credit card, you first need to do a thorough and honest review of your finances.  This will allow you to know precisely how much you will be able to spend on the project.  The NARI website offers worksheets that can help you with this.  Your next step before you start your remodel is to ask this question: "How long do I plan to live in this home? 

If you are not planning on living in the home more than five years, you need to approach the remodel as an improvement so that when you sale your home you can recoup as much of your remodel investment as possible.  In this instance, you are more than likely looking at a budget for a simple kitchen facelift.  However, if you and your family are planning on living in the home for more than five years, then you should approach the remodel with long-term plans.  In other words, don’t install something that you will grow tired of in five years or less.  In this instance, you may be looking at budgeting for a complete kitchen overhaul.

The first rule of thumb in any home remodel, no matter what, is to understand what the remodel will do to your home’s value and what the value of homes in your area, as you do not want to overprice your home for your neighborhood as you will never recoup the cost.  The more money you spend on your remodel, doesn’t necessarily mean that you will receive a higher percentage of return later when you sale your home.  In fact, the average upscale kitchen remodel with custom cherry cabinets and higher end amenities usually yields only an 85 % return when the property is sold.  However, a less extensive and less expensive kitchen remodel usually sees a 98 % return when the property is sold.   

The main reason for this is many homeowners when they do complete kitchen remodels they have a tendency to install customized items that appeal to the home owners' individual tastes, but that do not necessarily appeal to a general population of prospective home buyers.  The reason is that for many prospective buyers, they see these items upgraded customized items as unnecessary and are not willing to pay a premium price for them, especially if they buyer is trying to get the most for their money.  Finally, the greatest influence of how much your potential return will depend on:

·        Your region’s market

·        The neighborhood the home is located

·        The characteristics of the individual home.

To help keep the cost of your redesign down, consider assessing how important the “extras,” such as custom imported Italian tiles or vintage reproduction appliances are the overall look and function of your kitchen.  When budgeting for a kitchen remodel, many people go overboard with all the new and hot items that they want in their kitchen, but forget to budget for the cost labor and all the “hidden” cost of little things that may go wrong.  The usual cost of labor is usually approximately a third of the project's total cost.  

When budgeting, make sure that also budget for unexpected or hidden cost, such as unexpected surprises hidden behind walls or under floors especially in older homes.  These unexpected costs can bust a budget.  When remodeling my grandmother’s kitchen, we discovered aluminum wiring in the kitchen, which was remodeled in the early 1970’s, which meant we had to pay to have the entire area rewired and to ensure the safety of the home, also paid to have the electrician to inspect the entire home and replace any faulty wiring.  The bright side of over budgeting is if you don’t encounter any unexpected cost, then if you so wish, you may be able to elect to upgrade your choice of countertop, or go ahead a splurge for the vintage reproduction appliances.