Remodeling is a considerable investment for your home and takes careful planning. In this episode, Ron Webster, CKBR of Schloegel Design Remodel, shares how to budget for a remodel.
How did you get into remodeling, and what is your background?
I’ve been in the industry for 30 years. It’s been over 30 years, but I always try to lower it. I started not knowing what I wanted to do right out of high school. And then, I took a year off after high school, looked around, and figured out what I wanted.
I went to Johnson County Community College through their Interior Merchandising and Design Program. It was a great school with great teachers.
Out of school, I worked for Calico Corners for probably four and a half years, breaking me into design and telling me a little about what I did and didn’t want to do.
My interest was more in architecture and drafting. That’s what I grew up doing even all through high school. So I wanted to do something more about that. I started doing cabinetry because that gave me the best of both worlds, and I could design, be creative, interact with people, and have fun doing it. I wanted to become an architect and/or a drafter, but then I’d sit alone for hours. And that’s just not fun to me. My personality is more interactive, and I love working with and talking to people.
So that’s where I went and started doing that through a few different companies in Kansas City. I did some cabinetry designing for those companies and then ultimately landed the dream job at Schlegel. By doing almost the same thing but much more involved between all that.
My remodeling company started from 2005 through 2010, and the recession took me out of that, but that was a great learning experience.
All the different experiences I’ve had rounded me out with knowledge in multiple areas.
Let’s talk about budgeting for a remodel.
There are wants and needs that everybody has to go through in their remodeling project. You have to prioritize your needs and your wishes. Determining your budget also depends on how long you plan to be in your home. Are you planning on staying in that house for Two, three years, or 15 to 20 years? Or if it’s a forever house. There are so many different aspects in everybody’s situation. It’s tough to say this is the right way to do it because everybody is different. Being realistic with your budget is essential, but you must also know how to reach a budget.
How do you guide people to know their needs versus wants?
You prioritize everything you’re living in now that you don’t like and want to change. So if you have a kitchen with a poor floor plan, that’s a need, and you want to change that. If you have a kitchen that you want to have A microwave somewhere else, or you want to do something that’s a want in a way. It still applies to function, but there are certain things that you can do that can make your wants and your needs different. So when you’re prioritizing that, you are looking at all the other things you want to change. I always tell people this, look at everything you want, and make a column of each.
Make a column for all your wants and make a column for all your needs. I get all your needs in there, but with all your wishes, I will push as many of those in there as possible, depending on budget limitations.
Looking at your long-term goals for that house is crucial because that tells you everything. Your wants and needs differ if you are in that house for two or three years. You may have a list of three things you need to do to sell the house and get a good return and get out. If you will be in that house for 15 or 20 years or you plan to be carried out of your house, this is the time to think about what you want for longevity. When you invest in your home, you’re making a legacy for your family. It puts everything in place so your family can pass your home down one day.
Besides longevity in your house, how else do you arrive at a realistic budget for a project?
Unless you’re in the industry or have remodeled before, most people need help figuring out how to reach a budget. To be realistic, you must first look at your scope of work. If you are looking at a basement, consider the square footage, how many rooms you will finish, egress window requirements, etc. Some cities now require egress windows in living spaces. There are so many different things that we have to consider when we’re looking at a budget.
An excellent place to start is to get some rough estimates. It’s important to remember this is a rough estimate, and that number will likely change because we’re giving you a number based on the square footage. Contractors and designers base it on the finishes you want, whether basic, medium or high-end. Each one has a different budget range, and everybody’s expectations of mid and high are entirely different.
The different categories of basements, kitchens, and bathrooms will vary depending on the size and your taste. I often hear my clients want something casual, but then I get their Pinterest boards, and what they want is a bit fancy. There is nothing wrong with that; it just costs more.
There are many ways to reach a budget, but getting a few estimates is a great place to start. Two or three are all you need. Contact reputable contractors, companies with good reviews, licensed and insured, and can pull permits. They should be certified remodelers. Remember to provide each company with the exact scope of work so you are comparing apples to apples.
Are there other items clients should consider besides the remodeling budget in a project?
Engineering, architectural design, and actual design all come into play when budgeting. Many people leave that out because they don’t understand how much design costs or they don’t budget enough.
As a design-build company, we provide 3D renderings and architectural services; all our designers are on staff. We also have an entire production crew; it’s a one-stop shop. Our design fee includes your design and architectural services. When you go through our design process, you’ll also make all your finish. Your final contract provides comprehensive pricing for your entire project.
Depending on your project’s scope of work, those are all things to consider. We all want to know how much our total spend will be for a project; the design process gives you that. It ensures we design to your budget.
What about people using an architect instead of a design-build firm because they will need to consider the architect fees? They likely also need to consider costs for their designer and contractor.
Correct. We have clients that come in with plans; often, they are only conceptual plans. They’re not anything that we can build off. So it gives us a good guideline, but now you’ve spent five or ten thousand dollars with an architect, and we must recreate them now. That’s an additional charge that you could have avoided in the first place. Architects generally can’t provide realistic estimates, so they’re just helping you create your dream space without thoroughly considering your budget.
You could avoid that step by working with a firm that provides complete services and has one point of contact.
Before you do anything research, what kind of project do you want to do? Because if you do want design-build, don’t pay an architect for plans.
Yes, do your research. Also, know that the design, architecture, and production must work together, whether a kitchen, bath, or addition.
It is better if you are dealing with one person. I’ve built houses before, dealt separately with the builder, architect, and engineer, and then acted as my designer. It can be a management nightmare. When you have one person to deal with, it’s so much easier.
When preparing your budget, remember the architectural costs and the design fees.
What would be your next step in determining your budget?
Once you have a budgetary number, if, for some reason, that number is more than what you want to spend, look at some different financing options.
For instance, we offer services from Capital Federal Bank. They have several financing options, depending on the individual’s financial situation. They offer a Home Equity Line of Credit (HELOC), construction loans, and more. There are a lot of different ways to go about it. Your remodeler may also offer various programs.
What if what you need to spend doesn’t necessarily make sense for your neighborhood?
That’s a good question. There are a lot of clients that look at their home value and treat their houses as a moneymaker. Your house is not necessarily a money maker. It’s an investment that holds value but is only a money maker if you’re flipping it, which is not this conversation. So a typical house, you don’t want to overbuild or overdesign past the value of your area. Putting a $3 or 4 hundred thousand dollar addition on a $500,000 will likely value anywhere from five to 800,000. You should consider how long you’re going to live there. Some of our clients don’t care what the neighborhood will hold for the value of their homes. It’s their home, and they love their community. Emotion plays a huge part in your decision. Everybody is different.
If you do not plan on staying in your home long-term, you can reconfigure the existing space rather than prepare for an expensive addition. It depends on the individual client and their needs and budget.
If a client wants to remodel their home that has not been updated in 30+ years, but they can only do some at a time, how do you budget for that?
Perfect, many clients only do some things at a time. I’ve just finished the fifth project, over five years, with a client. Every year we’ve done a project. We’ve rebuilt their whole house, their basement, the middle level, their upper level, and their exterior. When phasing projects, you’re budgeting a certain amount yearly, whether from bonuses or some other source. You may have to wait two years to do it. Or you can use some of the financing options we previously mentioned. But when phasing, we can provide a range of how much each area will cost.
Then you can prioritize your projects. Do you want to do the bathroom first because it doesn’t work? If the kitchen works, do the bathroom. If the kitchen doesn’t work, do the kitchen. There are so many different options that you can do by prioritizing your needs.
Sometimes clients have an unrealistic expectation of cost; they think a complete kitchen will cost $50,000. How are you working with that today?
It depends on the scope of work of the project. Some projects are pull and replace, meaning we keep the same footprint but change cabinets, counters, flooring, etc. That’s a basic kitchen remodel. A full-blown remodel means you may take everything down to studs and then redo everything. But both of them have increased in cost. Nearly every price has risen in remodeling. While $25 or $30,000 used to pay for a full remodel 20 years ago today, it only covers a portion.
For a pull-and-replace kitchen, you could be looking at 40 to $50,000 depending on the size of the kitchen and the type of cabinetry, type of countertops, and so forth. A full-blown kitchen will likely cost over $100,000. Again it all depends on scope, size, and materials.
There is some sticker shock, and it’s coming to terms with how far your dollar can go. And today, unfortunately, it doesn’t go as far as we’d like it to. We, as designers, are still shocked when we put together these bids. Finally, respect the process as you’re going through it.