So you've decided that it's time to remodel your kitchen. You have a pretty good idea of what design theme you want to follow and you've already gotten a few recommendations for general contractors. Now comes the real challenge, coming up with a budget. It's not just important that you come up with a budget for your kitchen remodel; you need a realistic budget. The more realistic your budget, the less stressful the experience for you and your contractor.
Consider Return Value
The first part of setting a realistic kitchen remodel budget is considering how much of your costs you will actually get back. There is no need in putting more money into the kitchen than you will be able to recoup when you sell it. Take a major kitchen remodel on a mid-range home for example:
On average, you could expect to recoup around 74 percent of your remodel project costs when you sell your home. If the overall value of your home is $150,000 and you're putting $80,000 into a new kitchen, you could be out of as much as $20,000 when you get ready to sell your home.
Weigh Needs and Options
Sure, your favorite chefs on television have all the latest gadgets and appliances, but the real question is whether or not you need them. Don't waste your kitchen remodel money flooding your budget with so many wants that you forget about your needs.
For one month, write down the appliances and gadgets you actually use and those you would use if you had them. At the end of the month, the appliances and gadgets that are on your list more frequently will serve as your core components. Deduct these items from your budget and you can use what you have left over for extras.
Remember the Unexpected
No matter how professional your contractor is, when working through a remodel, it's best to always expect the unexpected. The unexpected doesn't just extend the time it takes to complete the project, but it also often increases the money you have to pay.
Unexpected events can include weather delays, material unavailability and structural problems. If these unexpected events are not the fault of the contractor, you will likely have to cover any associated cost on your own. It may be a good idea to reserve at least five percent of your budget for the unexpected.
Your contractor can work wonders, but they can't make money fall out from the sky. Your contractor can only work around the budget you provide. Make certain that you put plenty of time into making a realistic budget.