Whether you’re hoping to remodel your kitchen or you’ve purchased a fixer-upper and are staring down the barrel of a whole-home remodel, budgeting can be the most challenging part! Merit Real Estate is excited to share with you our best tips for budgeting (and funding) your remodeling project.
How much do you want to spend?
When determining how much you’d like to spend, take a good hard look at your finances. Not over-extending yourself too much should be your number one priority.
Second, consider how long you’ll want to stay in the home. If the answer is less than five years, your primary consideration should be improving the value of your home in the eyes of a potential future buyer. If this is your forever home, or you plan to stay more than five years, take it to consider what will make you happy. If you ever do sell your home, the kitchen will likely be ready for someone else’s personal touches by that time.
Finally, take your neighborhood into account. Is it a modest neighborhood or more upscale? Don’t improve your home past what the market in your area accepts; otherwise, you’ll take a major loss when you resell someday.
How will your costs break down?
Take a look at all aspects of your remodeling project. What percentage (or total dollar amount) will go toward each portion of the remodel? Here’s a sample kitchen remodel budget breakdown:
Consider also setting aside 20% for unexpected surprise repairs and maintenance that you may find once you really dig into your project.
Are you dead set on stainless steel appliances even though they are 20% more than standard appliances? Prioritize the appliances over things than may be less important to you, like solid oak cabinetry, to help tell your money where to go.
How will you pay?
One of the least fun parts of a remodel is figuring out how to pay for all this. Here are some options:
Borrow: At Merit Real Estate, we like to discourage people from excessive borrowing, as we know the dire effects it can have on financial lives if handled incorrectly. However, if you have outstanding credit and can get a great rate, this might be a good option for you.
Cash In Hand
Create a Spreadsheet
The most important part of maintaining your budget is to have an organized means of doing so. Create a budget spreadsheet (you can find many easily on Google) and flowing in the actual spending numbers to keep you honest.
If there are small jobs that you’re able to take care of on your own, do it! Changing knobs on cabinetry and laying simple locking tile are easy jobs that could save you hundreds in labor costs.
Don’t be Tempted
There will be add-ons and upgrades available galore. Resist the urge to splurge (or do so only when it’s really important to you – and work it into your budget!).
To learn more about Merit Real Estate and the services we provide, visit www.MeritRealEstate.com or call (310) 379-4444 today!