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ROI for a Kitchen Remodel?
Posted by Admin on Nov 23rd 2020
Selling a home is no different than selling a car. You want to increase the value, but you want to do so in a way that nets a profit. A kitchen remodel is a great way to increase your home’s value, and it doesn’t have to cost an arm and a leg. The kitchen is one of the most used and most important rooms in the home, and it can be a major factor in a buyer’s decision. Here is a guide to what helps increase your return on investment (ROI) for your kitchen remodel.
How do I Know What My Home is Worth?
Several key factors play into determining your home’s worth. Below you will find a few of those important factors.
- The Home’s value: You can easily find the value of your home with the help of a home evaluator.
- Price of Homes in your Area: It is always a good idea to see what other homes in your area are going for. Also, you should see if these homes have anything your home does not.
- Buyer's Needs: Remember, when people look to buy a home, they typically have specific needs in mind. It is important to consider this as you prepare to put your home on the market.
However, it is important to note that what your home is worth does not have to be what it sells for. Several factors can raise or lower the price of your home. Here are a few of those to consider:
- Property Improvements: Remodeling, landscaping, and other additions can raise the price of your home.
- Age Of The Home: With older homes, there can be some issues with things like plumbing or wiring. These elements can lower the value of a home. On the flip side, older homes are sought after for their often unique appearance and charm.
- Condition Of The Home: Homes that need little to no renovation will often sell for more than homes that need work done. Giving your home a facelift will greatly increase your curb appeal.
As a seller, the best way to increase your home’s value is by making improvements. Whether it is adding amenities, a fresh coat of paint or a total remodel, most improvements you make will help you get a better resale value. A kitchen remodel is a great way to improve your home’s value, as it can be done in a way you are comfortable with. A kitchen remodel can be as simple as new paint on the cabinets, or it can be as intense as a total rebuilding. Either way, it is important to plan and understand what your goals are before starting.
Can I Expect a Kitchen Remodel to raise my Resale Value?
The simple answer is yes, but a kitchen remodel needs to be done correctly. The first step is to create a budget and a plan. It is important to be realistic with both of these items. Selling a home can be a difficult and stressful time, so adding remodeling on top of that can be a lot. If you have the budget, a kitchen remodel is well worth it. Even though it will be costly, you can almost always count on your kitchen remodel to boost your home's value. Many homebuyers will spend extra to get a beautiful kitchen.
A remodeled kitchen can help your house stand out to potential homebuyers. This means not only that you could sell the home for more money, but also that it could sell faster. Around 80% of homebuyers list the kitchen as one of the most important spaces. Additionally, homebuyers will pay more for certain features, including specialty cabinetry, granite countertops, and high-end appliances.
Budget
A kitchen remodel is not easy and can come with a hefty price tag. Before you get started, be sure to keep your plan and budget handy. Take your time to nail down every detail of your budget to ensure that you cover all areas. To help you get the most for your money, here are a few budgeting tips:
- Spend On Things That Last: Do not spend your money on items that will need to be replaced in a few years. Rather, spend the majority of your budget on items like cabinetry, countertops, and appliances that will last for ten years or more.
- Don't Over Do It: Remember, you are selling your house, so don't do too much. Talk to your real estate agent to find out how you can best spend your time and your money.
- Unexpected Expenses: Set aside 15% of your budget for unforeseen expenses. Nothing ever goes completely according to plan, so it is important to have resources available should you have to change your plan on the fly.
Ways to Save on A Kitchen Remodel
Without sacrificing too much, there are some simple ways you can save money on your kitchen remodel. If your kitchen has a great structure, there are ways to refresh elements without replacing them. Here are a few ways to give your kitchen a makeover without breaking the bank:
- A Fresh Coat of Paint: If your cabinets are in good shape, then a fresh coat of paint can be all you need. This easy DIY project will not only save money, but it will also freshen up your space. Go with a simple white or light grey to add lightness and comfort.
- Reface Instead of Replace: If your cabinet boxes are still in great shape, but your cabinet doors and drawer fronts are outdated, you can reface them. Refacing your cabinets is a great way to get a modern look without a major price tag.
- Get A Tiled Backsplash: A backsplash allows you to experiment with different tile materials, eye-catching patterns, and beautiful colors. If you plan on selling your home, go with more neutral tones and simple designs. Costing only a few hundred dollars, a tiled backsplash will be well worth the cost.
- Get Creative With Your Flooring: Vinyl flooring has come a long way and proven to be a great choice for most modern homeowners. You can find styles that mimic high-end finishes but cost a fraction of the price. Opt for imitation real wood or slate vinyl flooring.
What about Your ROI For Kitchen Remodel?
Since you are remodeling your kitchen to attract buyers, the question is how much return you will get on this investment. Typically, your return will depend on how much you put into your remodel and what was done. Here is a breakdown of average ROI for a high-end remodel and for a budget-conscious remodel:
- High-End Kitchen Remodel: The national average ROI for a major high-end kitchen remodel is around 54%. This means if you spend approximately $126,000, you'll recoup about $68,000.
- Budget-Conscious Kitchen Remodel: The average cost of a minor kitchen remodel is around 80%. If you spend approximately $21,000, you'll most likely recoup about $17,000.
Finalizing Your Kitchen Remodel
There is no standard return for a kitchen remodel as there are various factors that can influence the amount of money you will get back. The local housing market will influence your return. If you plan to do a kitchen remodel, we highly recommend talking to an expert real estate agent. A real estate agent should give you the best advice about your kitchen remodel and what will get you the best ROI.