Many people call the kitchen the home’s heart and is often the first room that potential buyers look at when on the market. Updating your kitchen with a new remodel is an excellent way to help sell your home and increase its resale value. But how much does a kitchen remodel increase home value? Will you recoup the cost at a higher sales price? The team at Payless Kitchen Cabinets is here to answer these questions and shed some light on kitchen remodel ROI.
Contact us today to speak to a kitchen remodel contractor in Los Angeles County.
How Much Can a Kitchen Remodel Increase Your Home’s Resale Value?
According to a 2022 report from Remodeling Magazine, the typical full kitchen renovation has an average ROI between 52% and 71%. For example, if you spend $10,000 on your kitchen remodel, you can expect to recoup anywhere between $5,000 and $7,000 in costs through a higher home price.
Factors Affecting Renovation Return on Investment
The exact value your remodel project will add depends on the scope, any new appliances, materials, and kitchen stylings. Below are some of the major factors that will affect how much value you can get out of a kitchen remodeling project.
Remodeling Cost
All other things being equal, larger, full-scale remodels have a lower ROI than smaller, more specific projects, like refinishing cabinets or replacing appliances. After a certain point, a kitchen remodel project will generate diminishing returns, so it can sometimes be a better idea to settle for a smaller project instead of a larger project to have a higher return.
Upgrades
Prospective buyers take a lot of stock in kitchen appliances when making a purchasing decision. Installing high-quality, energy-efficient appliances like a new stove or refrigerator can net a higher return when it’s time to sell.
However, you should generally avoid making highly specific custom upgrades and renovations, such as building a coffee maker into the cabinets. These kinds of special custom projects are neat and can provide a great deal of functional utility, but selling a kitchen with a highly specialized design can be more difficult.
Location
Another major factor that affects kitchen remodel ROI is the house’s location. Different locations typically see different returns on kitchen remodeling projects, which reflects local differences in home values, construction costs, permitting requirements, and buyer preferences.
For example, minor kitchen remodels in Southern California typically have a higher ROI (92%) than other regions in the nation, while major kitchen renovations in Southern California usually have lower returns than average (32%).
Which Kitchen Updates Have the Highest ROI?
Kitchen updates involve making changes to several parts of your kitchen. As you might expect, different renovation projects carry different average returns. Below are some common kitchen renovations that usually have the highest returns in terms of property value enhancement.
Cabinets
Cabinets are probably the single kitchen renovation project with the highest returns. Returns on kitchen cabinets frequently reach 90% and can even exceed 100%, meaning you can recoup virtually all of the cost of the project. Cabinets are also relatively low-cost compared to other types of renovation, so they are highly cost-effective.
Cabinets have the highest returns as they are one of the first things that buyers see in a kitchen and greatly influence their attitudes. In that sense, fresh, new, sleek cabinets can make it easier to sell your home and it will spend less time on the market.
Countertops
Countertops also have a high ROI, averaging between 60% and 80%. Durable materials, such as granite or steel, have higher returns because they are tougher and last longer. Marble countertops have lower returns as marble is more fragile and more prone to cracking and chipping than similar countertop materials. Additionally, adding a matching backsplash to your new countertops can give you an additional real estate value boost.
Flooring
Kitchen flooring is another element that can have extremely high returns—on average, between 80% to 90%. Among common flooring options, hardwood floors generate the highest returns, but they are also the most expensive to install and maintain. In some cases, prospective buyers might prefer a kitchen with lower-maintenance flooring, like vinyl or linoleum. Different markets prefer different types of flooring, so make sure you do your research to see which kinds of flooring net the highest returns in your neighborhood.
Appliances
Kitchens are where most of your home’s major appliances are located, like stoves, fridges, range hoods, and freezers. Appliance functionality is a major consideration prospective buyers look for. More specifically, energy-efficient and smart home appliances are more popular today and can give you a higher ROI than lower-quality appliances, although they have higher upfront expenses.
Other Kitchen Elements That Can Increase Resale Value
The above categories are the major ones, but several other kitchen remodel elements can boost resale values.
Cosmetic Features
Kitchens are just as decorative as they are functional, and people want an attractive kitchen to catch their eyes. Cosmetic fixes, like refinishing cabinets, adding a new backsplash, or applying a new coat of paint, are simple and cost-effective changes that can boost home resale values.
Accessibility Features
Adding accessibility features, such as widening kitchen lanes or adding open shelves for convenient access, can make your kitchen more desirable for older or disabled buyers who need more space to comfortably move around.
Structure/Layout
Reconfiguring a kitchen’s space and layout is a tall task and can be quite expensive, but it can be worth the cost depending on the layout you choose. For example, open kitchen layouts are extremely popular right now, and some buyers will pay top dollar for a functional and attractive open layout. Making structural changes will cost more due to the costs of construction and repositioning plumbing and electrical fixtures.
How Much Do Kitchen Remodels Cost?
According to HGTV, most kitchen remodel projects cost between $15,000 and $40,000 in total. Traditional wisdom states that you should try to spend no more than 10% of the total cost of your come on a remodel. For instance, if your home currently costs $250,000, you should try to budget about $25,000 for updates and remodeling. Remodeling costs will depend on your choice of materials, the scope of the project, and current labor costs.
Tips for Budgeting a Kitchen Remodel Project
- Set a budget and stick to it. Many homeowners end up going way over budget, which requires more time and money.
- Understand all the cost breakdowns, which include materials, fixtures, flooring, demolition work, structural changes, and plumbing/electricity.
- You’ll need alternative arrangements for food and cooking when your kitchen is out of commission during renovations.
- You’ll want to order all materials and fixtures for delivery before you start any demolition work.
- Make sure you get all the necessary permits for construction or installation, or else your project could get delayed.
- Once you have a budget worked out, add an extra 10% to 15%. The extra money will help you manage any unexpected costs.
- Consider working with a professional kitchen designer. They can help you find options that fit your needs and budget.
Kitchen & Bathroom Remodeling in LA County
Read our blog if you want some cool ideas on how to style a kitchen island. If you have any more questions, such as, “How much does a kitchen remodel increase home value?” or about a kitchen and home renovation impact, contact the professionals at Payless Kitchen Cabinets online today or give us a call at (886) 482-0919 to schedule a consultation and get 50% off installation and no interest or no payments for one year!
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