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Remodeling Your Kitchen or Bathroom Might Cost More Than You Think

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  • I budgeted $30,000 for my kitchen remodel, but that’s not even half of what it will actually cost.
  • I asked a contractor if 10-15% of a home’s value is typical; he said kitchens are usually higher.
  • The supply-chain crisis has slowed the pace of remodels, but it hasn’t dramatically increased costs.
  • Read more stories from Personal Finance Insider.

Four years ago, I decided it was time to renovate my small condo kitchen. I budgeted $30,000, on the belief that all kitchen remodels cost $30,000. This year, I finally got serious and started getting estimates and had a rude awakening. The first firm I called doesn’t touch jobs under $100,000. Next, I got an estimate for $40,000 for construction and rough carpentry. That didn’t include cabinets or appliances, which would probably add another $30,000.

Clearly, my $30,000 budget was way off. For a reality check, I talked to Steve Cunningham, president of Williamsburg, Virginia-based Cunningham Contracting, and the chair of Remodelers for the National Association of Home Builders. Cunningham has worked in the building trades since he graduated high school, and he agreed that my $30,000 kitchen renovation budget was unrealistic.

Related: The best home improvement loans »

Home remodeling first steps

Cunningham’s first home-renovation principle is: choose the right person to do the work. “Make sure you choose someone that’s licensed, insured, and that you feel comfortable dealing with,” he said, “because they’re going to be a part of your family for a couple of months.” 

If you don’t already have a relationship with a contractor, Cunningham suggests calling your local builders association for referrals. Then pick two or three to interview. 

Ask these questions to vet your potential remodeler:

  • How long have you been in business?
  • What kind of license do you have?
  • Do you use subcontractors?
  • Do you have insurance? Are your subcontractors insured?
  • Will you get all the necessary permits? (It’s a red flag if your contractor asks you to pull permits)
  • Are computer-generated renderings of the project part of your service? (Cunningham thinks they should be)
  • What else could I do that I don’t even know I need? 

Don’t choose a contractor who will blindly do whatever you want. “If you’re making a mistake, you need a contractor that’s not going to be scared to tell you,” Cunningham said.

But do go with a licensed contractor. That will protect you from someone unscrupulous who might take your money and leave the job unfinished. “You’re probably going to pay a little bit more, but you’re not going to pay twice,” he said.

The kitchen remodel: How much to spend and what to expect

Common wisdom says that you should spend around 10% to 15% of your home’s value to renovate your kitchen. For example, someone with a $500,000 home should expect to pay at least $50,000 to $75,000. 

Cunningham thinks 10% to 15% is a good starting point, but kitchen remodels can run much higher. 

“When you look at what’s in a bathroom or a kitchen in a home, that is the most expensive part of that house,” he said. “There are so many different trades that are involved in those rooms.” You might need an electrician, plumber, tile installer, cabinet-maker, and glass person, in addition to your contractor.

The cost of a particular kitchen remodel depends on a host of factors. These are some of the items that will have the most impact on your budget:

  • Whether you’re replacing the appliances
  • Which appliance brands you choose
  • Whether you’re completely replacing the cabinets
  • Where you live (remodeling costs more in expensive markets such as the Bay Area)

If you want to get fancy, a major remodel with high-end appliances and cabinets can cost $200,000 or more, no matter where you live.

The bathroom remodel: similar budget to the kitchen

“Bathrooms and kitchens, depending on the size, are pretty much in line” in terms of price, Cunningham said. Those two rooms are “the heart of the home, like the motor of the vehicle.”

Bathrooms involve many of the same elements as the kitchen, such as plumbing, tile, and electrical. The bigger your bathroom, the bigger the price tag for remodeling is likely to be.

How will a home remodel affect the sales price of your home?

When one of Cunningham’s clients is about to sell, he tells them, “Don’t do anything. Whatever you do is probably not going to be what the next homeowner likes, and it might limit who you can sell it to.” 

But, he said, “If you’re going to be living there for 10 or 15 years, kitchens and bathrooms are what sell homes.” 

There is one type of renovation that makes homes more attractive to buyers, in Cunningham’s experience: universal design. That’s the principle that built spaces should be accessible to people of all ages and abilities. Cunningham’s company has done many remodels to help the retirees in his area age in place, and those features are attractive to other older homebuyers. 

The effect of COVID on home remodeling

There is good news and bad news about the impact of supply-chain disruptions on your remodeling project.

“Unless you’re putting on an addition to the house, remodeling doesn’t fluctuate as much in cost as building a home,” Cunningham said, because “lumber costs don’t dictate too much of the cost.”

That’s the good news. The bad news is that you might have to wait for the components you need for your project. And wait. Cunningham has been expecting a window for four months that was supposed to arrive in six weeks. 

“There are thousands of ships sitting off the coast waiting to get in, and that’s killing us,” he said. “We try to mitigate that by ordering it early. But we have found, over the last three months, that’s not even worked.”

On top of materials delays, labor shortages can also create bottlenecks.

Pro tip: If the refrigerator or stove you want is backordered and you can afford to pay a bit extra, higher-end appliances may be more available.

How to refresh your home for less

If you don’t have the funds for a complete remodel, Cunningham had suggestions for ways to refresh a kitchen or bathroom on the cheap.

For example, you could paint your kitchen cabinets, change the hardware, and replace your countertops for a fraction of the cost of a total redo. You can also get significant savings by choosing less expensive appliances. 

You might replace just the cabinets and tile in the bathroom, add new towel bars, or give the room a fresh coat of paint. And, if you’re looking for a cheaper way to give your home a facelift, bedroom and living room renovations generally cost less than kitchens or bathrooms.

In general, Cunningham says that you should expect to do a major home renovation about every 10 years. That includes less glamorous projects like installing a new heating system or replacing a water heater. 

Putting away 4% to 5% of the value of your house per year should give you more than enough to cover repairs and renovations. For a $500,000 home, that means saving $20,000 to $25,000 a year to invest in upkeep, or about $2,000 a month. If you want to see how that investment will contribute to the value of your house, Remodeling magazine has a detailed breakdown of cost versus value by item and geography.

As for me, I’m still down for a complete kitchen remodel. I’ve given up on my low-budget dreams, but having a kitchen I love will be worth it.

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