There’s no doubt about it. Kitchen renovation is notably one of the most common value-add home improvements owners undertake. However, the return on investment varies significantly, and it’s wise to consider all the relevant factors. Hence, the question shouldn’t be will kitchen remodeling affect your home’s value, but how.
How do kitchen renovations compare?
The first thing we need to do is classify improvements that fall into the broad category of kitchen remodeling. This is vital as no two homes are identical nor require the same kitchen upgrades.
Scope of works
Initially, all kitchen renovations can be either minor, medium, or major, depending on the scope of works and funds allotted for remodeling. Not creating a clear and detailed estimate of expenses will backfire sooner or later. Avoiding this remodeling mistake will ensure a successful renovation regardless of your budget. With that in mind, here are some of the approximations to give you a clearer picture.
- A minor remodeling involves mostly cosmetic repairs such as repainting kitchen walls, regrouting backsplash and floor tiles, and sanding and refinishing cabinets.
- A medium kitchen renovation includes that and more – changing the cabinet fronts altogether, replacing countertops, and upgrading and uniforming kitchen appliances.
- A major remodeling entails changes in kitchen layout and a complete renovation with upgrades, where the only boundaries are your imagination and allocated budget.
Quality of works
Major kitchen remodels also vary in terms of quality of material and finishes. You can opt for a midrange (approx. $65k) or an upscale (approx. $125k) set of works and materials. But be aware that not every upgrade has a good ROI, even if you can afford to spruce up your kitchen. The amount you spend is, quite often, not proportionate to the amount you will recuperate.
In other words, if you plan to sell your home after remodeling, your return on investment may be disappointingly inadequate. Most buyers have a strict and clear idea of what they need and appreciate in a kitchen. Every upgrade going beyond that is an asset that doesn’t return the investment and implies a waste of money. In general, major upscale kitchen remodels are proven to have the lowest ROI when compared to the minor, medium, and major-midrange renovations.
Necessity of works
Sometimes, observing may not be enough to determine whether kitchen remodeling will affect your home’s value or not. To ascertain this, you need to compare your kitchen to other kitchens in the area. A local real estate agent’s input can help you discover what kind of kitchen upgrade sells a home most quickly and with how significant of an ROI. It means that you need to balance:
- your current home value and your kitchen renovation budget, and
- the condition of your kitchen with the state of as many other kitchens in the area.
Why does it matter? An upscale kitchen in a medium-worth home stands out and makes the rest of the house seem shabbier than it is. In the other case, your kitchen may exceed or subceed the needs of a typical buyer. In either case, money invested doesn’t add significant value to your home and is thrown down the drain.
Speaking of caution and preparation, keeping your kitchen inventory safe in a storage unit is something you shouldn’t forget during the hectic remodeling period. If you decide on a full kitchen renovation, carefully pack and store away the appliances and furniture you plan to keep. Expensive repairs can easily offset any gain you expect from the remodel.
When is the right time for a value-add kitchen renovation?
With all the above mentioned in mind, the best time to undertake a kitchen remodeling is a year before you list your home for sale. The kitchen will still look brand new but will also exude the familiar feel of a happily frequented space. Renovating shortly before the sale allows you to get the best of the latest kitchen trends that also satisfy the needs and expectations of the majority of prospective buyers.
However, even during the best of moments for sale, you may not recover a total investment in kitchen remodel. This should not demotivate you. What a smart kitchen renovation doesn’t return financially, it compensates by the speed of sale.
Which regions benefit most from a kitchen renovation?
According to 2021 study results comparing the cost and resale value of home renovations in 150 national markets, expectations from kitchen renovations vary by region. Before outlining the scope and quality of works, it would be clever to check the latest statistics and direct your renovation toward the most cost-effective upgrades in your area.
Do all homes need a kitchen remodel?
There are certain situations when the return you expect from the kitchen renovation doesn’t justify the investment.
- You can’t afford it.
- There are other, more urgent, repairs.
- Other upgrades have a higher ROI.
The return on investment is visible only after the sale. It brings up a logical question – can you effortlessly finance the kitchen renovation, to begin with? Getting a loan to remodel your kitchen with a return that may not prove financially sound is a mistake. On the other hand, undertaking a DIY remodeling due to limited funds is feasible and even recommended when it comes to minor repair work. You can even save during the process of professional renovation if you take care of simpler tasks like prep work or painting.
If your home shows signs of more serious disrepair elsewhere, a kitchen renovation should not be your top priority. A much better approach would be to put your entire home in better shape. And finally, your home may benefit more from other value-add renovations. Or, the resale value isn’t worth the time and effort of renovation at all. Maybe the best option, in that case, would be to invest in expertly staging your home for sale, instead of the complete kitchen remodeling.
Whenever in doubt, consult the experts
If you’re still uncertain how kitchen remodeling will affect your home’s value, contacting your real estate agent is the best course of action. An experienced professional with knowledge of the local market will advise you on the most cost- and time-effective approach.
Emma Owens is blogging when she isn’t helping run a home-flipping business. She has seen enough home renovations nationwide to give a good piece of advice.