In consumer surveys, renovated kitchens are consistently at or near the top of the average homebuyer’s wish list. So even though kitchen remodels are among the most expensive home improvement projects, the return on investment is relatively high compared to other projects.
According to Remodeling Magazine’s 2013 cost vs. value report, a major kitchen remodel produces an average return on investment of 68.9 percent. A minor kitchen remodel produces an average return of 75.4 percent. The average cost nationwide for a major remodel was $53,931, with a return of $37,139 at resale, according to the magazine. For a minor remodel, the average homeowner spent $18,527 and recouped $13,977.
Major kitchen remodels produced higher ROIs, percentage-wise, than family room additions, bathroom additions, roof replacements and master suite additions, the report said. But the returns were lower than that of siding replacements, wood deck additions and window replacements.
The key with a kitchen remodel is not to overdo it. Lavish remodels with fancy marble or granite and gourmet appliances may wow buyers initially – but don’t expect them to pay in full for those choices unless you live in a very high-end area. Generally, the more expensive the renovation, the lower the return on investment at resale. Also, make sure your remodel doesn’t price you out of the neighborhood. A $50,000 kitchen remodel on a $200,000 home is a poor investment.
One caveat, though: If you’re planning to stay in the home for the long term, don’t spend much time worrying about resale value. If you want marble countertops in that $200,000 ranch, go for it. You should enjoy your home, and if you’re not planning to sell for 10 or 20 years – if ever – resale value is of little consequence.
A lawyer never retires. So I would just say that I am not as active as I used to be. Now I simply dedicate myself to fishing, my hobby, and my grandchildren. For Business Finance News I write about legal aspects of mortgage policies, mostly regarding the rights of policyholders. I also have articles about personal injuries.