The house needs work. You have unlimited imagination and plans, but limited funds. That’s okay, transforming your home takes time. If the kitchen has taken priority, working on a kitchen remodeling project budget can seem almost as daunting as the remodel itself. The first step is to find a contractor who you can trust to execute your plans as you envisioned and on budget. Once you’ve done that, you need to finalize your plans and set your budget.
When setting your budget there are few factors to consider up front. Are you paying cash for the project or do you need to securing a loan or line of equity? Are you undertaking the remodel for the benefit of yourself and your family or are you going to sell the house shortly? The answers to these questions will help you not only know what you are able to spend on your kitchen remodeling goal, but also how much makes sense to invest in the project.
A standard rule of thumb when working on a kitchen remodeling project is to budget at 20 percent of the total value of the home. This typically allows you to recover most of the cost upon conclusion of the remodel with the balance being covered with expected five-year appreciation. This is a general guideline that does not always take into account square footage, capital available and local market conditions.
It is also important when budgeting for your kitchen remodeling project to accurately forecast the cost of the things that matter the most to you. If those granite countertops are simply non-negotiable then make sure you’ve understood fully how much they will cost and ensure your contractor understands that in the event of budget overruns, you are prepared to make other cuts. By developing a contingency plan for cost overruns, you can help ensure your kitchen remodeling project comes off flawlessly, even when bumps in the road occur.