Kitchen Remodeling and the Budget – Putting it All Together

In the last two blogs we reviewed eight factors to consider when establishing a kitchen remodeling budget.  This blog will review putting it all together. 

One of the first keys is finding the percentage of your home value you should use as a budget guideline.  A typical range of percentage, kitchen cost to home value, is 10% to 25%.  To maximize your investment 15% to 25% is a good range.  For a kitchen remodel of the size and scope that includes new appliances, cabinets & counters, plumbing & electrical, and finishes such as painting, wood trim, and flooring anything less than 15% is probably not realistic unless you live in a high value home (such as a million dollar home).  If resale value is important it is probably best to keep the project within 20% of current home value.

Cabinet and counter selections vary significantly.  The more custom design and more unique materials you are using,  the higher your percentage base should be.  Appliances also vary significantly and if you can reuse some of the existing appliances this is a good savings.  You can also adjust the percentage up or down on the basis of electrical, plumbing, structural changes, size of the kitchen and the other construction and design factors discussed in the earlier two blogs. 

Your goals and priorities are also factors in the cost adjustments.  Obviously, if having a commercial style gas range, room for two cooks, more windows and natural light, or other luxuries are priorities, than construction costs will increase.  If the floor plan is changing significantly and electrical and/or plumbing services are being relocated, again a higher percentage is called for.

Finally there is item #8 in the last blog, funds available.  The kitchen remodeling budget has to work with the funds available.  Most professional remodeling companies can help you work with any reasonable budget making suggestions to maximize your goals versus budget and your return on investment.

And last but not least, consider doing the remodeling for yourself, not just for resale.  You are going to live there, you are bearing the current cost, you should construct a project that you enjoy and are satisfied with.   That being said, don’t go crazy.  Remodeling your kitchen, or your home, well beyond the values in your neighborhood is not a good long-term financial decision.  Of course, if this is your dream house and you plan to spend your life there, you might want to make it all it can be.  This obviously is a contradiction.  One solution does not work for everyone and you have to resolve what is best for you and your family.

Kitchen Remodeling and the Budget – Factors 5-8

 In the last blog, we started a review of kitchen remodeling and the budget including factors 1-4 to consider when determining the budget.  Here are four remaining factors to consider.

5. Goals & Priorities – You should give thought to the driving factors in choosing to remodel.  Some examples of these driving forces might include: Our cabinets and appliances are deteriorating or not working properly.  We love to cook and the layout does not work.  We entertain a lot or have a large family and the kitchen is too small.  We are renting or selling the house and the poor condition of the kitchen is a problem.  There is not enough storage in the kitchen.  Once you have a list, consider what your priorities are.
6. Must Have – List what you must have, what you would like to have, and what you can compromise on.  This may include granite counters, upscale appliances, double ovens, pantry cabinets, second dishwasher, island with seating, or type of flooring.  What kitchen details are most important to you?
7. Floor plan – A basic facelift or switch out of cabinets and appliances is going to cost less than if the sink and appliances change locations and electrical, water, and gas lines need to be relocated.  If walls are changing or windows and doors are being added or subtracted, this will add to the costs and require an increased budget.
8. Funds Available – This is the “get real” portion of the exercise.  What is the maximum amount of money you have available or have access to for use on your remodeling project.

The third blog of this series will discuss putting all eight factors together to determine a budget.

Kitchen Remodeling and the Budget – Factors 1-4

How much is this kitchen going to cost?  This is one of the questions we hear most often.  And we often answer; are you trying to stay within a particular budget?  It is very important to determine a budget for any remodeling project, and kitchens are no exception.  Kitchen remodels are detailed, home specific, and influenced by each homeowner’s goals and tastes. This makes average project costs, square foot pricing, or ballpark guesses often unrealistic.  In this and the following blogs I will attempt to provide the background information and factors you can best use to determine a kitchen-remodeling budget that works for you.

As a first step you can look on the worldwide web and find some sites giving general budget costs.  Probably the best known is Remodeling Magazine’s Cost vs. Value Report that covers the entire country and then is broken down by region and city.  Informative, but still a one size fits all approach.  Just imagine kitchens in the Baltimore area that may range from small spaces in city townhouses, large multi-room spaces in Roland Park or Guilford that were first set up for a house with servants (wouldn’t that be nice), modern suburban homes with open design, or what were once country farmhouses.  The range is endless and limits the importance of the average kitchen price in your city.  A more detailed and systematic approach is better.  In the remainder of this blog and the next are eight factors to consider.

1. Home Value – What is your home worth?  If you are a new homeowner this is fairly obvious.  If you have owned your home for a while you can talk with neighbors or realtors or review information on similar homes for sale in your area.  A good website for checking neighborhood values is http://www.zillow.com/.  I find it less than accurate for any individual home but fairly accurate as an overview of a neighborhood.  Also, you have to consider the condition of the home.  New or remodeled kitchens or baths will add home value; we will have more on that in later blogs.
2. Condition and Type of Home – In general newer homes with modern framing and sheetrock are less expensive to remodel than older homes with plaster and lath on old framing and block walls.  An older home may need window and door replacement as part of the kitchen remodeling.  Electrical and plumbing upgrades may also be required.  If the structural framing is going to change by opening the kitchen to other rooms or combining existing rooms, a larger budget will be required.  And if an addition is required or requested, a whole additional set of factors need to be considered.
3. Length of Time in the Home – Give thought to how long you intend to live in the home.  If you are planning to be in the home for a long time, that calls for a different approach than if you plan to move within the next five years.
4. Size – If your kitchen is abnormally large or small, this will typically mean increasing or decreasing the budget.  Larger kitchen more cabinets, counters, flooring, wall and ceiling finishes and an increased cost.

The next blog will review four more factors to consider.  The following blogs will have some information on putting it all together to arrive at a budget.

Why do you need design documents?

Clients sometimes question the need for design and design documents if “they know what they want to do”.    There are several reasons to take the time to properly prepare design documents and not rush to construction.  Some are noted below.

·        Design documents are the main resource for communication between the client and the designer/builder on what is to be built and what materials are to be used.

·        The design documents, along with the construction contract, provide the legal basis for the contract agreement between client and builder.

·        The design documents communicate the decisions made during the design process to the carpenters and other mechanics that will actually do the building. 

·        Design documents are often required by various local authorities who will issue permits and neighborhood associations where neighborhood approval is required

·        Good design adds value to your home.

·        Design, carefully tailored to a client’s taste and lifestyle, makes a one-of-kind, highly customized environment for the client.

Design is a process and takes some time but the advantages of professional design far outweigh the costs.  This presents a great value for the customer, enabling them to have a great finished product that matches their desires.

First Meeting with a Contractor

Your first meeting with a remodeling contractor is a time to get your questions answered and see if this contractor is a good match for you.  Typically after your initial inquiry we will schedule a preliminary free consultation at your home.  The usual length is one or two hours.  There are three primary issues we will want to discuss, the goals you are trying to achieve, your timetable, and your budget for the project.  We will do a walk through of your home or the areas to be remodeled and ask a lot of question to try to understand your goals and the scope of the project.  You will probably have many questions for us as well.  After meeting we may be able to provide a preliminary proposal with a budget range, or for more complex projects a design proposal, and information on moving to the next step.  Before making a next step decision you may wish to review the information with us, ask questions, and clarify how best to proceed.  You may also wish to visit our job sites or talk with past clients.  Typically at this point the next step involves a commitment on your part to work with us.  This may either be a design contract, a project development contract, or a construction contract.  Design and construction contracts are fairly straight forward; project development involves providing conceptual drawings, drafting a scope of work or specifications, and more detailed calculation of estimated construction costs.

How to "Read" an Estimate

One of the hardest parts of being a professional remodeler is estimating accurately.  Every project is unique, each home individual, every client with different goals, tastes, and budgets.  The profession of remodeling entails so many facets of construction from careful demolition, preservation of existing finishes, framing, products, general construction knowledge, plus knowledge of all the trades including: HVAC, plumbing, electric, roofing, masonry, etc.  The remodeler must be able to evaluate the existing structure for soundness, determine what should stay and what should go, decided how to tie in the renovation to the existing structure, and determine what level of quality will please the client while trying to meet the client’s goals for scope of work, products, and budget.

For “ballpark prices” the remodeler is expected to do all this before there is a working set of drawings, structural engineering analysis, or a thorough walkthrough of the project by the various trades.  Remodelers know that often if they give a ballpark number that is too high they stand a good chance of being eliminated from consideration at the start.  Likewise, if they give a very low number they will either have to be constantly up-selling the client, write numerous change orders, or lose money and go out of business.  None of which properly serves or benefits the client.

As a client it is important to analyze the entire proposal, not just an early price.  An effective approach is to interview, choose a remodeler to work with, establish project goals including scope of work, products, and budget and then work with the remodeler, considering options, to meet your goals as closely as possible.

How to Pick a Home Remodeler

Choosing the correct remodeler for your project can be difficult.  Each remodeling company has its own skill level, specialties, level of professionalism, and method of operation.  It is really up to the homeowner to find a remodeler that shares their vision for the final results.  Following are some steps you may take to find just the right remodeler for your home.

·        Look at the company’s portfolio of complete projects.  Ask how they created solutions to particular remodeling problems.

·        Interview the company salesman or owner, look at the depth and breadth of their expertise, the history of the company, the talent of the staff and tradesmen, their ability to properly produce and execute your project for a reasonable price in an appropriate time frame.  Basically determine if the company is a good fit for you, your family, and your project.

·        Talk with the company about your vision and goals and your budget for the project.  The remodeler may have suggestions to maximize your remodeling dollars while suggesting a scope of work and product selection to meet as many goals as possible.

·        Let the remodeler be creative instead of dictating the direction of the project.  After all they are professional remodelers and work designing projects to make the most of the possibilities.

·        Check references for projects similar in scope and scale to yours.  You may even want to visit completed or in progress projects.  Consider the quality of the work, reliability, meeting the construction schedule, communication skills, etc.  A lot more goes into remodeling projects than obtaining the lowest price.  You may be asked to invest a little more for a remodeler who can deliver the best product and service.

In general become an educated consumer.  Remodeling can be on of the most rewarding decisions you will make.  Make the right choice and your home will be a pleasure for years to come.