Kitchen Renovation Budget

I said it.  I said the B wordBudget.  Ugh.

Whether you’re a designer or a consumer, budget is always presented to me as the biggest challenge of any kitchen renovation.  Customers don’t know how much a renovation is going to cost them, and a designer doesn’t know where to start a design without a number.  We call that a stalemate.  So…let’s take some time to unpack this dilemma.

First, a few interesting tidbits.  We, as consumers, make purchasing decisions in context.  What does that mean?  It means we eliminate certain options based on preference, then weigh what’s left based on value.  For example (and entertainment), let’s go through what I’m thinking about when choosing peanut butter at the grocery store.

Q: Natural peanut butter or “unnatural” peanut butter?

A: Not natural, the kids won’t eat natural because it’s “goopy and gross”

Q: Chunky or smooth?

A: Smooth, the husband won’t eat chunky because, ya know, chunks

Q: Brand name, store brand, or budget brand? (Here’s where it gets interesting)

A: I won’t buy the budget brand because I don’t like it, so it’s out.  Now I’m down to brand name or store brand.  I have a favourite brand name peanut butter, so if it’s on sale, I’ll buy it, but it must be within a few cents of the store brand.  I mean I like it better, but that “better” is only worth about $0.50 to me.  That’s the value differential.

That’s the context I’m talking about, simplified.

It’s really, really hard to have the same experience when starting a kitchen or bath renovation.  First, you can’t stand in front of a four foot display in a store to choose your kitchen.  The layout of your cabinets, accessories, doorstyle and finish determine the price, not the size of the room.  I can design a 10x10 kitchen to cost as little as $2,786.50 or as much as $9,572.60 simply by changing the door style and finish, adding mouldings, adding more drawers and upgrading them, and including a few accessories.  That’s a $6,700 spread – almost 3 times the lesser expensive kitchen price.  Wow.  Now also remember this is only for cabinets.  The same spread could apply to your countertops, appliances, flooring, etc.

So, without knowing what something is going to cost, how do you determine how much you’d like to spend, and how do you determine the value of what you’re buying?

Recommendation #1: Determine your Planned Investment

Notice how I changed the wording there from budget to planned investment?  Kitchen & bath renovations give you the highest return on investment of any renovation when it comes time to sell your home.  You’re adding equity (or at least not LOSING equity) in your home when you do a kitchen or bath renovation.  Don’t know where to start?  Ask yourself these 2 questions: 1) what is my home worth?  A kitchen renovation should run between 10-20% of your home’s value.  If your house would sell today at $300,000, think of your planned investment running between $30 and $60,000, again depending on what work you want/need to have done. 2) Were I to buy a car today, what would I spend?  That number tends to let you know where your comfort zone is in terms of expenditures, and because vehicle advertising is so prolific, it’s a number most people have in their head.

Recommendation #2: Determine your Priorities

What do you want to include most in your reno?  Is it new commercial appliances?  Is it having a wall taken down?  Is it quartz countertops?  Or maybe it’s extra pantry storage or a broom closet?  Make a list of what you want, prioritize it and start assigning value to it.  This will help you and your designer immensely when it’s time to start designing your kitchen.

Recommendation #3: Work With a Designer You Trust

All of this is moot if you don’t trust the person designing your kitchen enough to believe they’ll use your investment dollars wisely.  If you’re concerned they’re going to take your money and give you a shoddy kitchen, you’re working with the wrong person.  Your designer should take the time to explain to you the ins and outs of the products they carry, and make recommendations to you based on your planned investment.

Recommendation #4: Keep a Contingency Fund

Know that renovations almost always run into a hitch or two.  Maybe your electrical requires some updating.  Maybe it’s the plumbing. The point is, it’s almost always something.  As I’ve said before (see blog post 1), keep about 10% of your planned investment unspent, and you’ll be covered for most contingencies.

If you know what you want to spend before you start shopping, both you and your designer will have a much more positive shopping experience.

Happy renovating!

 

There Could be an Up to $6700 spread for a 10 x 10 kitchen.

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A kitchen renovation should run between 10-20% of your home value.

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