Remodeling? Balance the Wants vs. Needs

Let’s start with your wishlist…

There’s a list of must-haves/necessities. A list of wants. Figuring out what to spend where is the key to allowing must-haves to mix in with the wants. There’s not a set formula for what you should allow for your upcoming remodels, but there’s an estimated percentage of what each portion usually costs and based on the value of your home, there’s a formula for how much to spend.

According to Houzz.com, Sandpoint and its surrounding areas average kitchen remodel is $18,654. This average takes into account those spending as little as $3,000 and those spending as much as $40,000. Of those remodels, 62% of those remodeling hired a professional to help them. The average cost of the homes remodeled is $250K.

Given that same demographic, (house value at 250K near Sandpoint), the average bathroom remodel was $7,524.

How does that break down? If these averages ring true, then kitchen remodels average 7-9% of your home’s value and bathroom remodels average 3-5%. Given these examples, you can figure the cost of your remodel based on your home’s value. Here’s an example:

If my home is worth $240,000, I figure a 7.5% remodel budget of $18,000. That breaks down as follows:

40% of that goes toward cabinets ($7,200)
7% to flooring ($1,260)
12% to countertops ($2,160)
11% to appliances ($1,980)
4% to Electrical/Lighting ($720)
25% to labor ($4,500)
1% misc. ($180)

The rate of return on my investment according to real estate estimates would be $256,140, increasing my home’s value $13,140. If I spent $18,000 getting it there, I actually lost $1,860, but updating my kitchen probably would be the difference of me selling my home over another home that’s not been updated. Or if I plan on staying in my home for years to come, I get to reap the benefits of the updated kitchen and peace of mind knowing I invested in something I am going to get my money back on down the road.

The kitchen is the most important room in the house. We go there in the morning first thing to get our coffee, grab breakfast and we gather there in the evenings when we get home from work. When we entertain, it’s where people gather to talk, snack, prepare meals… it’s the hub of your home.

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