Like it or not, your kitchen will be the most expensive room in your property to renovate. And rightly so, it’s the one space internally that adds the most value, according to bank valuers.
If you’re planning a dream kitchen to your own home and the primary goal is to create a kitchen to enjoy for years to come, then saving money or having a “budget”, probably won’t be on your radar. For you, the most important thing is to “love” the space you live in. However, if you want to make sure you don’t overcapitalise too much on your new kitchen, you may want to make sure you have some budget in mind to avoid costs spiralling out of control. It’s super easy to get carried away, once you start looking at kitchen design images on Instagram or Pinterest so having budget parameters to stick by, will surely be a good thing.
Kitchen Costs Vary Per Project
Know that the cost of a brand new kitchen installation will vary according to factors such as:
- Your property’s location
- Your room size
- The condition of your room
- The amount of structural work to be done, if any
- The number of cabinets you have to install
- The quality of materials you choose
- The appliances you select
- The amount of labour required
- How much you do or don’t project manage yourself
Even with all of that said, you’ll still need a budget to work with, which leads me to your kitchen budget formula.
Your Kitchen Budget Formula
If you’re renovating your kitchen where you don’t want to risk overcapitalising then aim to spend no more than 3% of your current property value (not the original purchase price of your property). This formula is for a fully finished kitchen, materials & labour included, all said and done. This is a good rule of thumb to stick by, especially to avoid “undercapitalising” where you don’t invest enough money to do the room justice.
Hypothetical Example: If your property is currently valued at $600,000, your kitchen spend should be in the vicinity of $18,000 total, fully finished. If you spend more, you risk overcapitalising, it’s that simple!
It’s important to highlight, if you start changing your room layout structurally – deleting, moving or adding walls, or structurally altering your floors – this is all additional money that will be required on top of your 3% budget. If you choose to make these sort of structural changes (which some kitchens will desperately need), you’ll find it almost impossible to stick to the 3% rule of thumb.
What Are Your Options?
Budget wise, the most expensive option is to outsource your whole project to a full service kitchen manufacturer / builder where you can easily drop $30,000 – $60,000 typically. This is not a problem for a more expensive property but for a lower budget property, will be.
On the flipside, kitchen manufacturers / builders can be a great option for people who lack construction knowledge and don’t feel confident managing the kitchen renovation process from start to finish themselves or those who simply haven’t got the time to project manage their own renovation. You’ll also get a raft of other benefits such as home warranty insurance and a guaranteed quality outcome, by engaging a one stop shop. The buck will stop with them, so as to speak.
At the next level down and for many people on more modest budgets, you’ll be heading down the DIY / flatpack path. Your goal is to install a brand new kitchen to your home or investment property where you achieve a practical and great-looking kitchen, but a cost-effective one. This option will mean you need to be very involved in project managing your renovation (versus completely outsourcing this to a one-stop shop). You’ll likely be ordering flat pack cabinets from companies such as Kaboodle, Ikea, Freedom and the like. You may self-assemble the cabinets yourself but get a licensed carpenter to professionally install all of your cabinetry and benchtops for you. You’ll need to co-ordinate a raft of other trades such as your plumber, electrician, tiler and be good at communicating your needs to each of them. If heading down the DIY path, you may need to apply for an owner builder permit. Be sure to check this with your local council, before you start your renovation. Or you could simply get Spinryde to manage all the council and trades for you for a modest fee.
Last but not last, in an ideal world, you should always allow a contingency fund of between 3%-5% of your spend for unknowns / surprises that happen during the construction process. In real life however, very few people have the luxury of doing so.
May your next kitchen renovation be a success!