Would a Kitchen Renovation increase Your Home’s Value?
It's the fundamental question facing anyone who has ever embarked on a home renovation: How likely am I to get
the money back when I sell my house? There's no easy answer, because what a buyer might be willing to pay depends
on many factors — everything from the choice of project to the
materials you use to the value of other homes in your neighborhood. But it's
important to have some idea of what your improvements might be worth. If you want to invest more than you can
hope to recoup because you love your house and plan to live in it for a long while, that's fine. But consider
the following guidelines and you'll avoid unpleasant surprises when it comes time to put up that For Sale sign
on the lawn.
Kitchen renovations are notoriously expensive. Remodeling magazine's Cost vs. Value
Report 2013 says the cost to renovate a 200-square-foot kitchen with wood cabinets, an island,
laminate countertops and a standard sink and faucet is about $54,000. That price also includes new appliances,
lighting and flooring.
A gourmet kitchen with granite countertops, custom cabinets and a tile backsplash, along with built-in and
commercial-grade appliances can nearly double that price tag to $107,000.
Refacing is a more cost effective option, not only
will you save money, time, and the environment, you stand the best chance of recouping your investment. If you are
happy with the layout of your current kitchen but are tired of a dated look with worn cabinets, doors and drawers.
Doors, hardware and shelves are all replaced and the cabinet shells are completely refinished through the refacing
process to create an entirely new look. From beginning to end, refacing projects usually take between two and four
days and generally cost as much as 50 percent less than new cabinets. But, the amount of time and money spent
varies by cabinet number and the replacement materials you choose.
Payback by the Project
Since the mid-1980s, Remodeling magazine has done an annual analysis of cost versus value for residential
remodeling projects around the country. Americans will spend over $295 Billion on kitchen renovations this
year. By polling real estate agents and appraisers in various regions, the editors determine about how much
projects cost to complete and how much those improvements might add to a house's selling price one year later. The
report is widely considered the most authoritative study of the subject.
For homeowners that spend less than $15,000 on their kitchen, they can expect to see a return of 99% on their
investment. With those kind of numbers, there is no other room in your house where you could expect to see the same
kind of return on your investment. Kitchen Renovations account for 70% of the home improvement projects, and that
is for a reason. By Refacing your cabinets, you can not only change the look of your
kitchen, but also increase the value of your home.
A home renovation can represent a major expense. However, most homeowners are willing to plunge those large sums
of money into a remodel because they expect that they will recover the money in the appreciation of the home's
value. This is true as a general rule, but knowing how to best recover the costs of a home renovation requires
knowing which types of updates will see the best returns. For potential buyers, the kitchen is the room that can
make or break the sale. An upgraded, attractive kitchen can make your home irresistable. Ideally, your kitchen
renovation should earn a 70 percent return on investment when you sell your home. But this depends on the features
you choose, how much you spend remodeling and whether your priority is to create a dream kitchen for yourself or a
kitchen that will appeal to potential buyers. Knowing how to avoid trendy finishes and shoddy workmanship will make
sure your return is as high as possible.
Remodeling for resale means choosing materials that appeal to the masses. This means opting for stainless steel
appliances that are high quality rather than professional-grade models. Spend on functional features like pantry
drawers, soft close cabinet drawers and doors, waste-recycling cabinetry. But don’t over-personalize the space. You
may appreciate the art-deco drawer pulls that cost $50 a pop, but will buyers care? Probably not.
The biggest mistake homeowners make is spending more on the remodeling project than their home value can
support. Don’t expect to get optimum return on a $65,000 kitchen if the home is valued at $300,000. Generally
speaking, you can spend between 6 and 10 percent of the total home value and get fair returns. You also can be too
thrifty and overlook items that buyers looke for in your price range.
Don’t get overwhelmed by all the choices, but do take some time to check out what’s out
there. Check out the Web, visit Parade of Homes, look at lifestyle magazines (and tear
out ideas that strike you) and be observant whenever you are in someone else’s kitchen.
This will help educate you and make the selection process a bit easier