Is Remodeling a Kitchen a Good Investment?

Most people who want to remodel their kitchen wonder if it will be a good investment. Maybe that’s you, too. You’ve been living with your drab, inefficient kitchen with its dated cabinets and countertops for years. Now you’re ready for something fresh.

Sure, you could just sell your house and buy one that already has everything you’d want in a dream kitchen. But perhaps you love your neighborhood. Or don’t want to go through the bother of moving. So, updating and upgrading your kitchen seems like the right decision.

But before sinking a lot of money into it, you want to know if remodeling your kitchen will in fact be a good investment.

We’ve all heard that when people are looking at houses the most important rooms are the kitchens and bathrooms. These are the rooms that sell the house. A freshly remodeled kitchen or bathroom will attract buyers and make the house sell faster.

And that makes sense. These are the most expensive rooms to upgrade. So, investing in making your kitchen to make it a welcoming, efficient space will pay off, right?

The short answer to that question is maybe, it depends. Here’s why.

Do Kitchen Remodels Add Value?
Four factors come into play when determining if your kitchen remodel will add value to your home.
The first factor involves how extensive your project is. In other words, whether you undertake a minor or major remodel will impact how much of your money you’ll recover when you sell your house.
A major kitchen remodel is precisely that—significant changes to your existing kitchen. Major remodels often involve gutting part or all of your kitchen. You will most likely change all or nearly all of the entire room. The layout and flow might be completely altered. Typically, appliances, flooring, cabinets and countertops are replaced, as are backsplashes, paint and lighting. You might even add or enlarge a window.
A minor kitchen remodel is considerably smaller in scope. The original layout and flow of the kitchen will remain the same, or only be lightly modified. So, for the most part, the footprint of your kitchen will not change.
While many of the existing elements of your kitchen will remain the same, others will be altered. So, you might replace your flooring, refrigerator and the hardware on your cabinets, and finish with a fresh coat of paint. Or you might retain your floor but install quartz countertops. In other words, you might do some, but not all, of the work involved in a major remodel.
The second important factor is the quality of the materials used in your project and the appliances you select. Whether you choose upscale quartz countertops at the high end of the price range, or something similar in the midrange, this will have an impact on what you’ll be able to recoup when you sell. But those choices may not have the impact you think.
What is the ROI on a Kitchen Remodel?
According to a study done by Remodeling Magazine as presented in their 2020 Cost vs Value [link: https://www.remodeling.hw.net/cost-vs-value/2020/] report, you will at best recoup 78% of your investment. This means, for example, if you put $40,000 into your project, you won’t be able to add more than $32,000 to the asking price of your house.
The 78% ROI they report is for a minor remodel using midrange materials. Major remodeling projects did not provide that much of a return. Remodels that were major in scope that used upscale materials had an average return of 54%, while those using midrange materials were slightly better, at 59%.
But can you count on even that much? Estimates vary. Some real estate agents believe that on average the ROI on a kitchen remodel is 60%. Other sources estimate between 50 and 85%. Another study showed that the kitchen remodel did not increase the value of the home at all.
With such different statistics, how can you estimate what value a kitchen remodel will add to your house?
A third factor to consider is the current condition of your kitchen. If it is well-laid out with plenty of storage, appliances less than five years old and finishes that aren’t dated or worn, then a remodel won’t add a lot of value to your house.
On the other hand, if your floors are worn, you have chipped granite countertops, old appliances and dated finishes, then a remodel certainly will add some value.
The fourth factor is the standard of kitchens in your neighborhood. If you have the least efficient, most dated kitchen on the block, then an upgrade will assuredly have a positive effect on your house’s value. If you have a kitchen that is the envy of all your neighbors, then enhancing it won’t allow you to increase your asking price.
To Remodel or Not to Remodel?
When answering this question, keep in mind why you want to remodel your kitchen. Most people undertake kitchen remodels for themselves, not hypothetical future buyers. These homeowners can’t stand certain features of their kitchens and want to change them. They are doing the remodel so they can enjoy using their kitchen, not simply to make some extra money when they eventually sell their house.
What Should You Not Do in a Kitchen Remodel?
When you do decide to go ahead with your kitchen remodel, it’s easy to get caught up in creating your dream kitchen. There are a few mistakes that can end up being very costly. And while you’re not expecting an unrealistic return on your investment, you want to plan so that you get the most return possible.
There are a few common errors that people make. You can easily avoid them by following these tips.
1. Don’t sink a lot of money into your kitchen, thinking you will get 100% back when you sell. The only way this will happen is if your kitchen is horribly outdated with aging appliances. And even then, it’s not likely.
2. Don’t over improve. Make sure the end result will be in line with other homes in your neighborhood and price point.
3. Set a realistic budget for what you can afford. Don’t count on making a profit from this remodel. And don’t get fixated on having everything you’ve dreamed about. Prioritize the most important features and be willing to let a few of the others go.
4. Think ahead. If you’re not planning on selling for several years, select appliances that have a long life. You won’t want to buy new ones just before you leave.
How Can You Save Money on a Kitchen Remodel?
Proper planning and budgeting will help you keep the cost of your kitchen remodel within your means. Then you won’t feel pressured to get 100% return on your investment.
The first way you can save money on a kitchen remodel is to do your research up front. This isn’t just the fun part of looking at pictures of kitchens and dreaming about the features you want. It’s also important to have an idea of what things will cost, just to have a good sense of what money you’ll need for the new countertops or cabinets.
One way to do this is by checking out kitchen remodel cost estimators, like this one [link: https://homeguide.com/costs/kitchen-remodel-cost]. A tool like this, for example, will tell you that you can plan on spending between $250 and $350 a square foot. If you want all high-end finishes, then you can expect to spend at the upper end of this range. But don’t forget, using a formula can only give you a general figure of what your project might cost.
The estimator tool can also give you an idea of what new cabinets, countertops, flooring, appliances and other features can cost. Bear in mind that these are just estimates to help you with your initial planning. The estimate your contractor calculates will be based on the actual plan and finishes you choose. If you make major changes to the plumbing, for example, your cost will be much higher. And it will take into account the prevailing wages and costs in your area.
Once you have a ballpark estimate of what your remodel could cost, you need to set a budget.
If the estimate is more than what you’re willing to spend, think through what’s most important to you. And discuss it with your contractor. They’ll be able to help you figure out where you can trim some of the expense. For example, there are different grades of quartz countertops. Or you can choose a less expensive flooring material.
Then you’ll have to decide what your priorities are in planning your kitchen remodel. You will get more life out of higher quality materials. But you’ll get a lower return on investment when you sell. So, you’ll need to decide why you are remodeling: to get a financial return, or to create a kitchen you love. Or perhaps some of each.
In any case, being willing to give a little on less important features and putting your money in your highest priorities will help you save money on your remodel. And since you end up with the majority of what matters the most, you’ll be happy with the end result and have saved some money at the same time.
A great contractor will help you figure out which items will maximize your return on investment. They’ll know the condition of the houses in your area and will be able to guide you to make choices that will be in line with the neighborhood.
The Intangible Return on Investment of a Kitchen Remodel
Remember that remodeling your kitchen isn’t all about the money. Unless you’re planning to sell in the next year or so, you’re upgrading the kitchen for you.
Think about what bothers you about your kitchen. You don’t live in your house to be frustrated by an inefficient, outdated kitchen.
Consider how happy the remodeled kitchen will make you. If you can’t stand cooking on an electric stove, then changing to gas will be a good investment in your quality of life. If your dream is having an herb garden in your kitchen window, then that’s what you need. If you’ve always wanted a wine cooler in your kitchen, maybe you should go ahead and have one installed.
And there’s no reason not to build your dream kitchen if you can afford it. Just don’t count on getting all the money back when you sell your house. There’s no telling what you’ll get in terms of dollars and cents when you actually sell.
But you can make sure you’ll enjoy your kitchen as long as you stay in your house. Consider what it’s worth to create a space you’ll love cooking in, creating meals and memories for family and friends. When you think about it that way, the return on investment for a kitchen remodel can be priceless.
          
How Do You Know it’s Time to Remodel Your Kitchen?
Remodeling a kitchen can be an expensive project. So it’s natural for people to put it off. But then they wonder, when is the best time to create their dream kitchen? 
And since so much money can be involved, homeowners don’t want to make a mistake. Instead, they want to get the best value for their money and maximize the return they’ll get from their investment.
 Also, remodeling a kitchen can disrupt your life for a few weeks. So, you don’t want to undertake a remodel when you’ve got other major life events looming. But let’s assume you’ve got the space in your personal life so you can put some energy into upgrading your kitchen. 
Is now a good time to remodel your kitchen? 
There’s no easy answer to this question. Much of the answer depends on your why.
 
Why Do You Want to Remodel Your Kitchen?
Think about what’s fueling your desire for a new kitchen. If you’re facing a situation like a significant electrical code violation, appliances from the 80s, and a floor that testifies to more than one generation of teenagers growing up in the house, then probably an entire remodel is long overdue. But most of us aren’t in those circumstances.
So, think hard about what’s causing you pain in your kitchen. According to one survey from Houzz, almost half of the people who remodeled their kitchens said it was because they couldn’t stand their kitchens anymore.
But did they really need to remodel?
  
What are the Pain Points of Your Current Kitchen?
Carefully consider the features of your kitchen that frustrate and bother you the most. The ones that cause you the most pain. Some of the most common ones are:
Clutter
One of the biggest complaints people have about their kitchens is that they look cluttered and untidy. Kitchen tools, spices, and other items crowd the counter space, leaving little room to work.
Instead of jumping to the idea that you need a larger kitchen or all new cabinets, maybe all you need to do is install organizers in your cabinets and drawers. Or perhaps add sliding drawers in your cabinets so you can make use of the hard-to-reach space in the back. In either case, you’ll be able to get rid of the clutter on your counters. Then you’ll be better able to decide if you really need more counter space or not.
Inefficient Flow
Another common problem is that the layout of the kitchen is inefficient. Before redesigning your kitchen, try to see if you can reorganize for efficiency. Store the things you often use within easy reach. Stash the stuff you use only a few times a year on high shelves or in the back of cabinets. This simple fix might be the solution. Even if it’s not, you’ll probably have a clearer idea of what you need in terms of cabinets and storage.
The Workspace is Secluded
Nowadays, most people want to feel like their part of the party. What’s the point of having family and friends over if you’re going to be isolated in the kitchen? And most people have struggled with preparing dinner while keeping an eye on what the kids are up to in the family room. Remodeling your kitchen to create an open plan seems to be the obvious solution.
But before you dive into a remodel, try rearranging small appliances or adding a mobile kitchen cart. Even if this doesn’t help much, you might get a few ideas for what kind of kitchen layout will work best for you.
 
Your Kitchen is Too Dark
Of course, you want good lighting in your kitchen. While sometimes you might prefer romantic dim light, it’s a different story when you’re chopping onions. Upgrading lighting might be the solution. Or a fresh coat of paint on dark cabinets could lighten things up.
Outdated or Overly Trendy Finishes
Your kitchen might be perfectly functional and efficient.
But you may have grown tired of what was once trendy. For example, you’re sick of the open shelving that forces you to keep your cupboards tidy. Or you cringe every time you try to clean the granite countertops that are stained and chipped. Or perhaps your mosaic backsplash or subway tile makes your kitchen look frumpy and out of date. Or your kitchen island is a great workspace, but no one can sit and eat at it. And you’ve grown to despise the oversized drawer pulls that were all the rage ten years ago.
You might be able to fix some of this without a major remodel. For example, replacing a backsplash or cabinet hardware is relatively inexpensive. Countertops and redoing the layout are more costly fixes.
Your Kitchen Lacks Features You Want
Maybe you really want a gas stove, and yours is electric. Or you want a double sink, a wine cooler, pantry, island, breakfast nook…the list could go on. When you start thinking of deficiencies in your kitchen like this, now a remodel is looking like your best solution.
The Kitchen is Too Small
Now we’re getting to more challenging things to fix. For example, suppose you live in an older home, and the kitchen doesn’t even have space for a dishwasher. Looking into remodeling will most likely be your only option for making your kitchen work for you.
 
You’re Getting Ready to Sell
We’ve all heard from real estate agents that the kitchen is the heart of the home. And that kitchens and bathrooms are what sell the house. So, you might be thinking that if you are putting your house on the market in the next few years, this might be the time to remodel your kitchen.
While you certainly will want to spruce up your kitchen so it looks your best, a complete remodel might not be what you need.
Once you’ve tried the easy fixes and thought through what you want from your kitchen, you’re in a much better place to decide if the time is right to remodel.
This brings us to the next factor involved in deciding if this is the right time to remodel your kitchen.
What is the Cost of Remodeling Your Kitchen?
If you think you can spend $40,000 on a kitchen remodel and then sell your house for $40,000 more than you would have asked, think again. The average return on investment for a kitchen remodel is between 60 and 80%. While return on investment varies depending on the scope and quality of materials used [link to roi article], it’s important to remember you won’t get all your money back when you sell your house.
Major kitchen remodels can cost over $60,000, while minor remodels are more in the $20,000 to $30,000 range. The quality of the appliances and finishes you choose will have a big impact on the final price tag.
So, it is critical to establish your budget. You don’t want to spend more than you can afford, hoping to recoup it with the sale of your house. Instead, set a realistic budget, and accept that you won’t be able to do all that you want to. Or else wait until you have the means to do the project to create your dream kitchen.
What are Different Types of Kitchen Remodels?
Deciding if you are going for a major or minor remodel will greatly impact the price tag. Understanding the difference will help you decide which is right for you.
There are three general types.
Cosmetic remodels involve items like refinishing the floors, repainting cabinets, changing cabinet hardware or upgrading the lighting. These projects are very limited in scope.
Minor remodeling means that the basic layout and flow of your kitchen will most likely remain the same. You might replace some appliances and put down a new floor. Or instead you’ll put in new cabinets and backsplashes. In other words, you might do fairly significant work, but you won’t replace everything.
Don’t be fooled by the word minor. This type of remodel could cost $20,000 or more, depending on the price of the materials you use. If you opt for top of the line appliances, flooring and quartz countertops, things will add up quickly.
Major remodeling involves gutting the kitchen, reworking the layout, and replacing most of the appliances, flooring and cabinets. A major remodel could even include taking down a wall or adding a door or window. Work of this scope will easily cost more than $60,000. A lot depends on the quality of materials you choose and the size of your kitchen.
Choosing the scope of your remodel is a very personal decision. It comes back to why you want to remodel. For most people, the biggest reason for remodeling is to eliminate features they hate about their kitchen, replacing them with features they will love.
How Long Does a Kitchen Remodel Take?
This is another factor to consider. While good contractors work hard to minimize the disruption to your life, you’ll want to take that into consideration during your planning. Major remodels take at least three to five months. Generally, minor remodels take less time.
If you’re remodeling to sell and need to be out of your house in three months, then your focus should be on a minor remodel, taking care of the things that can be done the quickest.
 
When is the Right Time to Remodel Your Kitchen?
Now we’re back to the question we started with. If you’ve thought through what you don’t like about your kitchen and easy fixes won’t be enough, then this is a good time to consider a remodel.
If you’re thinking of selling in the next few years, then some remodeling will most likely be a good idea. You won’t get all the money back, but a fresh updated kitchen will help your house to sell faster.
If you’re planning to stay in your home for a few years and there are things that you just can’t stand about your kitchen or stress you out, why suffer with them? Think through the things that you really want from your kitchen, what will make you happy and make it more enjoyable for you to be in your home. Set a budget and scope for your remodel. And look forward to enjoying your newly remodeled kitchen.