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Planning for a Kitchen Remodel

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I love to cook so I love kitchens. I could look at kitchen pictures all day long. Whether you prefer a pretty kitchen or a functional kitchen, we all want a kitchen we love because it is the heart of the home.

A kitchen remodel can be a huge undertaking. Whether it is just a cosmetic facelift or a full blown gut job, there is so much to consider from layout to materials to finishes and of course: THE BUDGET!!

The budget often dictates the scope that your remodel can be. Creating a plan that considers all factors and knowing the costs for your remodel are key. What are the best ways to pay for the remodel?

  1. As with most things, paying cash is ideal. Saving up to pay for the project in cash is great but you want to know the scope of your project and how much you will need.

  2. Another common way to pay for a kitchen remodel is with a home equity loan. If you have enough equity in your home these loans can be fairly straightforward to obtain. However, you do want the equity to still be strong after the remodel. Don't let the remodel make you equity poor. Of course interest rates make a huge difference in your payment so this method is more ideal when interest rates are low. Plus, the interest will most likely qualify as an itemized deduction for tax purposes.

  3. Putting a remodel on a credit card and maxing it out is usually not ideal. I know some will say "I have 0% for 12 months and I am going to pay it off in that time." That may be the plan but it isn't the norm for how putting it on a credit card usually turns out. And then the interest rate is outrageous. And not tax deductible.

Once you choose the payment option you want to go with, you need to nail down how much that is going to be. Always make sure your budget includes a buffer because most projects end up costing more than estimated. Remember, just because you have a large budget available doesn't mean spending the whole thing is the best investment.

The scope of your remodel can dictate your return on investment. According to Zillow, the national average ROI on a minor remodel is 81% with an average cost of a little over $21,000. A midrange remodel has an ROI of about 59% with an average cost of almost $64,000. An upscale remodel has an ROI of nearly 54% with an average cost of over $125,000. While budget often dictates the scope of a remodel, you need to factor in the ROI as well as some other factors before making your plan.

First, how long do you expect to be in the house? If you are only going to be in the home a few years, then a minor remodel most likely makes the most sense so that you get the biggest return on your investment while also creating a kitchen you can live with in the meantime. On the flip side, if you have been in your home for say 20 years and you have a large amount of equity in the home, maybe the mortgage is even paid off, and you plan to stay in the home long term, then an upscale remodel to create your dream kitchen could be the way to go.

Second, consider the location and value of your home. Will a remodel put the value of your home in line with neighboring homes or will it out price the neighborhood? My professor for the first finance class I ever took made a statement I will never forget. He said, "Buy the least expensive house in the most expensive neighborhood you can afford." If you already own the most expensive house in the neighborhood then the ROI on your remodel may be even lower than average. However, if you own the least expensive house in the neighborhood then a remodel could create a bigger return than average.

Third, what can you do yourself to save money and create sweat equity? Things like painting the cabinets or walls, changing faucets and hardware, and hanging wallpaper are great weekend projects that can immensely change the aesthetic of your kitchen with very little cost. If the dated oak cabinets make your kitchen feel drab, a few cans of paint and on trend cabinet hardware will immediately change the feel of your kitchen. Sometimes the layout becomes more workable when you create the visual environment you want.

Fourth, what are you trying to achieve with your remodel? Are you a gourmet cook that needs more functionality or do you eat take out every night but want your kitchen to be an inviting space to gather? If you are the gourmet cook, you want to invest in higher end appliances and storage for all of your pots, pans, and gadgets. If you are just wanting an inviting space, you can focus on pretty finishes. Maybe your splurge is the countertops instead of the appliances.

Fifth, consider your materials. This one goes a bit hand in hand with what you are trying to achieve. If you need custom cabinets to create your desired layout, look for other materials you can save on. Light fixtures can be very expensive but there are also great options for less expensive look alikes these days. Countertops can vary greatly in price but they don't always have a huge aesthetic difference to most people. Marble is beautiful but expensive and due to its porous nature isn't always an ideal option. Maybe quartz achieves the look you want at a much less expensive price. Materials should also be considered based on your neighborhood and what potential buyers would expect in your area. Remember you don't want to out price your neighborhood.

My husband and I have done several kitchens together. Here are some things we did on different ones to save money and achieve our goals. Our first was a 1950's home in Raleigh that we renovated in 2003 right before we got married. Our budget was limited so we did most of the work ourselves. My husband is very handy and is great at woodwork. Additionally, we were able to buy high end appliances that were deeply discounted. The fridge was a Sub Zero scratch and dent deal but the dent was easily covered up by adding a piece of cabinetry around the side of the fridge. The 60 inch Viking range had been a floor display for a couple years. We were able to get both for about 25% of retail. That allowed us to do granite countertops which were a pretty big deal back in 2003. Our intention with the house was to flip it after a few years which we did in 2005 shortly before the housing crisis and made a handsome profit.

The next house we purchased was perfect for starting a family but the kitchen was not my ideal. We knew this house was not long term and since the housing crisis had brought the value down after we purchased it, we didn't want to spend much. We did some small upgrades like cabinet hardware and light fixtures ourselves and then added basic granite countertops to achieve a better look but without breaking the bank.

Our next home was one we planned to be our forever home and we knew it needed work when we bought it. The home was about 100 years old so the kitchen was separated from the rest of the home and had not been updated since the late 80's (and it was now 2012). This remodel became a much bigger project as we knocked out a wall and turned a guest room that was right off the family room into the kitchen. Custom cabinets, high end appliances, and high end granite. We created our (well my) dream kitchen because this was going to be our forever home. Hurricane Florence would change that several years later.

The home was basically uninhabitable due to water damage and mold. However, the kitchen was completely fine. More on what we did with the kitchen in just a minute.

We moved in early 2020. I was in love with everything about the new house except the kitchen. It had great appliances but the aesthetic was not my style. Creamy yellow cabinets, faux stucco walls, and a yellowy granite to match the cabinets. I could deal with the layout so we decided to do a cosmetic update and paint the cabinets, change the wallpaper, and update hardware. All of those were fairly inexpensive. Our splurge on this one was new countertops.

Back to what we did with the dream kitchen. We had a little weekend cottage that was a total loss and torn down due to water damage from a burst pipe in the ceiling that we didn't know about for weeks. The lot sat vacant for several years but we finally decided to rebuild after we had moved in 2020. So in 2021, we broke ground and built a footprint that could use the dream kitchen. We simply moved it. A few upper cabinets had to be redone due to ceiling height but that was about it! We saved so much money on the cottage rebuild by completely repurposing our dream kitchen.

I tell you this so that you evaluate what can be re-used or re-purposed in your kitchen remodel. Sometimes you may not need all new cabinets, just new cabinet doors. A concrete plan is the key to making a kitchen remodel come out as close to budget as possible and fulfilling your design dreams!

All this kitchen talk has me wanting to go get in mine and do some cooking!


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