Like anything else in this world a kitchen remodeling is going to cost more than you thought it would and the sky is the limit on what it can cost depending on your tastes. There are multiple factors that go into determining a remodeling budget. click here for related details.
Below are the factors to consider your remodeling budget:
Factor 1 Funding—Determine the maximum amount of money you could afford to spend. If you are financing your project you can calculate what a lender will likely lend you. Lenders want to see a debt to income ratio (DTI) of.36 or less. Your DTI is established by taking all your monthly debt obligations (credit card payments, auto loans, mortgage, etc.) and dividing by your monthly income.
Factor 2 Did someone say AGA?—List any must-haves for a kitchen remodel to be worth it to you. Possible examples: granite counters, an island with an extra sink, a second dishwasher, a commercial quality gas range, etc.
Factor 3 Longevity—Determine to the best of your ability the length of time you plan on owning the home.
Factor 4 Size Matters—Determine what percentage of your home your kitchen encompasses. A sampling of over 100 modern home floor plans of 1000 to 3000 square foot homes revealed the average kitchen square footage to be 7% of the home’s square footage. If your kitchen is larger or smaller than this average you may need to increase or decrease your budget accordingly.
Factor 5 Layout—If you already know you’re going to want the sink moved, an island sink added, an interior wall moved and an exterior door added, then you need to add money to your budget well beyond what a basic facelift would cost.
Factor 6 Home Value—Consider not only what you think your home is worth, but also the value of similar homes in your neighborhood that already have updates. My favorite website to check home values is zillow.com, simply enter your address and you get an interactive map with home values and other information listed right on the map. Take note of which homes are of similar size to yours, have been purchased more recently, but have a higher value, then peek in their windows to see what the house looks like. f
Factor 7Wow!—This has everything to do with your goals and motivations. Write down each motivational factor which is important to you in a kitchen remodeling. Here are some possible examples: Kitchen is falling apart. You love to cook and the layout doesn’t suit you. You love to entertain and want to open up the kitchen as a place to gather. You want a kitchen that wows your guests. You are getting ready to sell your home and the kitchen is a sticking point with buyers.
Putting it All Together
The key to determining your budget is finding the percentage of your home’s value you should use as a budget guideline. While researching this article, I ran across recommendations to use percentages ranging from 10% to 25% of home value. For all kitchen remodeling in any substance to which it includes a new appliances, flooring, sink/faucet, cabinets, and lighting bringing an electric up to code I find anything less than 15% to be a very dubious number. I suppose on a million dollar house 10% would be a workable budget, but on a 200k house a 20k budget is marginal at best for a full blown kitchen remodel.