What Is The Percentile Rule For Updating A Kitchen?

Demolition day is fun and all, but before anyone lifts a sledgehammer to renovate their kitchen, they should first wield pen and paper. Because a key ingredient in any fixer upper project is determining what you will spend. And the best way to plan a kitchen renovation budget to maximize your investment is to follow this important percentile rule. When it comes to home remodels, the 30% rule refers to the idea that you should spend no more than 30% of your property's current market value. In other words, if your place is worth $500,000, any remodeling work should be limited to $150,000 or less.

And since the 30% rule applies to the total renovation budget for your home, you don't want to pour it all into the kitchen remodel. Doing so would leave no cash leftover to tackle bathrooms, flooring, or other desired updates. So, experts recommend committing just 5% to 15% of your home's value for kitchen updates, which leaves a $25,000 to $75,000 renovation budget for our $500,000-house.

The thinking behind this is not simply to help determine how much you should expect to spend on a kitchen remodel. With the tab for updated kitchens ranging anywhere from $15,000 to upwards of $150,000, having a plan can also aid homeowners to rein in their spending. Most importantly, having a limit ensures you'll receive a return on your investment. Though you may do anything to meal prep atop Carrara marble countertops, potential buyers may not feel the material is truly a cut above. So, you don't want to spend money on renovations that you'll never recoup.

Following the 30% rule, the first step in whipping up a freshly remodeled kitchen is determining your home's resale value. You could chat with a real estate agent to get a feel of property value in the neighborhood or look into getting a professional appraisal. But with the price tag for hiring a licensed appraiser in the neighborhood of $300 to $500, you may prefer to save that cash for custom cabinetry. In that case, consider using a home value estimate from real estate sites such as Zillow or Redfin. Just know it won't be quite as accurate as the official appraisal.

You'll also want to keep in mind that the budget applies to everything from the cost of a contractor and materials to those hidden renovation fees such as construction permits or having to rent a storage unit for furniture. It's also important to set aside roughly 10% to 20% of the room's budget as a cushion for any surprises that pop up along the way. Fortunately, even with all those line items, there are plenty of ways to save money when renovating your kitchen. You can usually cook up some savings on appliances by waiting for a major holiday sale or buying a floor model. And unless absolutely necessary, you can maintain the kitchen's current layout to avoid costly plumbing and electricity work.