How to Calculate the Cost of a Kitchen Remodel

If you’re like most homeowners, you may have a list of home improvement projects that you would love to accomplish in order to gain more enjoyment and utility out of your home and also increase its resale value.

Many times, unknown potential costs of a do-it-yourself home improvement project keep the project from moving forward. For less handy homeowners who may wish to hire the workout, the age-old fear of being taken advantage of by a contractor can also hinder progress.

Kitchen remodels are often one of these feared projects for good reason. Kitchen remodels can be one of the priciest upgrades you can make to your home, but also one of the best for seeing a return on investment in both a personal enjoyment and monetary perspective.

The only way to determine the financial viability of your kitchen remodel ideas and to cross-check the price estimate of a contractor is to calculate the cost of the project yourself.

To calculate the cost of your kitchen remodels, or any home improvement project for that matter, you must think like a contractor. When a contractor calculates the cost of a project, they perform a “take-off” and “estimate”. A take-off is a summation of all the material quantities required for the project and an estimate is just as it sounds – it is an approximation of the raw costs to perform the work at hand.

Performing a remodeling estimate may sound like a complex task with too many moving parts to determine hard costs, but if you follow the framework provided here, and do a little bit of local pricing research, you can become proficient at pulling together budgetary costs for any project you wish.

It is a little bit like performing a monthly household budget, but you first have to know what items need to be budgeted. Contractors estimate and take-off the following categories of costs associated with every project, large or small: Materials, Labor, Equipment, Subcontractors, Overhead, and Profit. Each of these categories is further broken down into scopes of individual work required to complete the project.

Material costs are first and foremost when estimating your kitchen remodel. Material costs are also one of the easiest to pull together accurately, but first, you must perform a material take-off. To do this, examine each scope of work required within you remodel and estimate how much of each material will be necessary.

The more detailed you are, the more accurate your estimate will be. Determine quantities like the square footage of tile, drywall, countertop, and painting. Count how many light fixtures, switches, appliances, etc. you’ll be installing and pull all of the data together within a simple spreadsheet.

Next comes the fun part – go window shopping. Pick out the exact makes and models of the materials you want for your renovation. Pick the tile, appliances, paint, etc. and gather representative pricing for everything from your hardware store or from online research. Once you have a material take-off and material costs, move on to estimating how much all this material will cost to install.

Labor costs are the second and more complicated costs to consider when you pull together your kitchen remodel estimate. If you are a do-it-yourselfer and will be performing most of the work, the time you put into self-perform the physical labor is a significant cost saving over hiring a contractor. However, when approaching a major kitchen to remodel, you must consider your capabilities to perform the work safely and to a quality standard that is acceptable for resale.

Poor craftsmanship is no substitute for saved labor costs. You also must consider how much your time is worth to you and how much enjoyment you get from do-it-yourself projects. Local construction labor may cost $20 per hour and you may have a job in which you make $30 per hour.

If this is the case, you may prefer working your job rather than self-performing your remodel. If you are looking to cross-check a contractor’s quote, labor costs are related to two elements: the local labor market’s hourly rate for skilled construction labor and the productivity (units installed per hour) of that labor.

A little bit of internet research can typically turn up a general/average hourly wage for construction labor within a particular field (tile installation, drywall installation, etc.). For example, if you have drywall work to be performed, do some research on what a skilled drywall installer makes in your area.

While researching the hourly rate, additional research can turn up industry standard productivity of drywall installers – in this case, the productivity will likely be represented as square feet installed per hour. With the estimate of drywall square footage from your material take-off, you can quickly generate an estimated cost for drywall installation labor.

Perform this same research of hourly wage and productivity for each scope of work included within your kitchen remodel. This might include demolition work, cabinet or countertop installation, electrical work, painting, etc. If a well-defined wage and productivity is not available, use a generalized assumption of what the wage may be (say $20 per hour) and how many men and days you would expect to perform the work.

You can easily do this by breaking down the work into more manageable scopes. You may look at a cabinet/countertop installation and conduct the following estimate: 3 men for two 8-hour days at approximately $20/hour should yield an approximate labor cost for that scope of work of $960.00.

Do this for each scope involved in your kitchen remodel and you’ll have a very detailed labor estimate to include in your total remodel budget. You may come to find that your cost estimate may be high in some areas or low in others, but that is the nature of an “estimate”.

Estimating Subcontractor, Equipment, Overhead, and Profit costs are now the final items necessary for your project budget calculation. If you are self-performing most of your kitchen remodel, you may find a highly specialized scope of work that is difficult to budget on your own with the above methods, and you may wish to hire out, or subcontract, that portion of work.

For example, electrical work is a highly specialized scope of work that most do-it-yourselfers shy away from. It is also difficult to estimate the costs associated with electrical work due to unfamiliarity. Therefore, in order to get a representative electrical budget for your kitchen renovation, a good option is to solicit at least three electrical subcontractors to provide pricing for the work.

With this information, you can formulate a more accurate budget price for the electrical work required for your renovation. Solicit pricing in a similar manner for other specialized aspects of your kitchen renovation.

Equipment costs are not likely to be especially prevalent within a kitchen renovation project; however, it is important to include estimated rental pricing for special tools and equipment that may be necessary to complete the project. You may also wish to purchase miscellaneous tools and materials in order to complete the project (i.e. clean-up supplies, saw blades, etc.).

Be sure to include these miscellaneous costs to more accurately reflect your overall budget. It may also be a good idea to include within your budget some contingency money for unexpected issues that come up during construction. It is difficult to cover all possible scenarios that could occur during a remodel, but a little bit of contingency cost will give you some peace of mind.

Overhead and Profit are costs that you will only need to consider within your kitchen remodel budget if you intend on hiring a general contractor to perform the work. General contractors are just like any other business and have general operating costs (overhead) and a markup on their services (profit).

These two costs are generally considered a percentage of the combined “hard costs” (labor, material, equipment, & subcontractors) and can vary widely from contractor to contractor and service area to service area. A 15 to 20% increase in combined hard costs can typically provide a rough estimate for contractor overhead and profit costs.

With the combined total estimate of the costs detailed above, you now have a complete budget for your kitchen remodel or home renovation project which can be used as a sounding board for savings goals, financing, or cross-checking of a contractor’s quotation to perform the work.

Additionally, an accurate project estimate can help you determine which areas of the project you should scale back to save money. It can also be used when working with a real estate agent to determine if the desired home renovation will give you the return on investment necessary to justify the costs.

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