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Do homework before you start kitchen project

Updated: May 3, 2013 12:14PM



It's so easy to fall in love with the idea of a new kitchen -- new appliances, new cabinets, new flooring. Maybe you'll even cook! And it looks easy to justify the expense. After all, this will certainly add value to your home.

But when it comes to the financial side of kitchen remodeling, you need to do a reality check before you start. How will you pay for this project? What financial discipline will you have when it comes to the extras? How will you control the costs when the unexpected electrical or plumbing problem inevitably arises? And how can you make sure you're not fooling yourself about the value you're creating.

If you're tempted to skip the rest of this article, you're already in trouble! Not facing up to financial realities is a recipe for remodeling disaster. So consider the following:

VALUE ADDED: If you're not planning to sell your home, rationalizing that the cost of the kitchen will pay for itself in increased home value is simply fooling yourself.

PAYING FOR THE PROJECT: Yes, your home-equity loan interest probably will be deductible -- but it will also come with a floating rate of interest. Be sure to calculate how high the monthly payments could go if rates keep rising -- and be certain you can afford those higher payments. Put that loan money in a separate checking account -- so you can keep track of what you're spending. That's important in keeping control of the project -- and for adjusting your cost basis when you eventually sell your home.

MAKING A PLAN: Know what you're planning to spend -- and then add at least 10 percent for the unexpected. Get a firm bid on the job, and insert a penalty clause for delays on labor, if you're using a general contractor. Research appliance costs and lock in sale prices in advance. Make sure to include any delivery charges in your budget. And double-check that the plan includes all the trades -- from cabinetry to flooring to plumbing, electrical, painting and countertop installation.

REMEMBER DISRUPTION COSTS: You won't have a kitchen for six weeks or more. It's a sure thing that you'll be eating out for weeks -- and those costs can add up!

As a last warning -- and from personal experience -- let me give you the three most expensive little words in the world of remodeling: "As long as . . ." Once you get started, there's a huge temptation to upgrade your original plan. It goes like this:

"The cabinets look so wonderful, as long as we're doing this, we really should have granite countertops, etc., etc."

Resist that temptation. Plan well -- then stick with the original plan and budget. That way you'll enjoy every meal in your new kitchen.



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