In a Nutshell
How much value a remodel adds depends on factors like the extent of the work done and the quality of the materials used. Often, the value a kitchen remodel adds to a home may only be a portion of the money spent on renovations.If you’re thinking about remodeling your kitchen, you might wonder how much value a remodel could add to your home.
The answer may depend on what shape your kitchen is in before you start work, how it compares to kitchens in other homes in your neighborhood and what you have done.
Remodeling’s 2023 Cost vs. Value Report provides estimates of how different home improvement projects may affect a home’s value, and it can be a good starting point for investigating how much value a remodel could contribute.
- How much value does a kitchen remodel add?
- What adds value to a kitchen?
- How can I pay for a kitchen remodel?
- Should I remodel my kitchen?
How much value does a kitchen remodel add?
Home improvement projects may not raise a home’s resale value by as much as they cost. Remodels typically bump up a home’s value by a percentage of what the homeowner spends on them, but that percentage might not be as high as you expect.
When considering a remodel, it makes sense to evaluate a project’s price tag by the portion of the cost that you’re likely to recoup when you sell.
Remodeling’s 2023 Cost vs. Value Report analyzes the cost of kitchen improvement projects for both minor and major remodels. Minor remodels make limited changes and leave many features in place, while major remodels can significantly alter a room.
The report includes the average cost of the following three kitchen remodels — along with the value added to the home by these updates. Keep in mind that returns aren’t guaranteed and that they may vary from the national average depending on where you live.
- Midrange minor kitchen remodel: A 86% return on an average investment of about $27,000
- Midrange major kitchen remodel: A 42% return on an average spend of about $78,000
- Upscale major kitchen remodel: A 32% return on average spending of about $154,000
What adds value to a kitchen?
Before deciding to remodel, you’ll want to think about which features of your kitchen you plan to change and which you plan to leave in place. It’s a good idea to set a budget, get quotes and figure out how much the work will cost before deciding to proceed with a project.
The following alterations may add value to your home and could be worth considering if you choose to remodel your kitchen.
Changing the size/configuration
Expanding and improving a kitchen can add value to a home. Reconfiguring a room can be an expensive undertaking, though. If your budget won’t support a full renovation, you may want to consider a smaller addition or less costly tweaks to the layout, such as adding a small island.
Replacing outdated/inefficient features
If some kitchen features are old or no longer working well, you may be able to add value by replacing them. You could consider installing new appliances or upgrading to energy-efficient windows.
Adding accessibility features
Making a kitchen more accessible and easier for older adults or people with disabilities to use can increase its value.
Possible improvements include replacing knobs with easy-to-grab handles, adding pull-out boards or turntables that allow convenient access to items in storage, and installing countertops that can withstand heat near cooking areas. Lowering cabinets, opening up knee space under sinks and workspaces, and leaving adequate clearance for wheelchairs or walkers can make a kitchen more accessible for people with limited mobility.
Cosmetic features
Another way you could add value to a kitchen is to spruce up its appearance. You may want to consider installing an attractive backsplash, updating cabinets or adding decorative lights. Other possibilities include upgrading the kitchen sink with a newer model and replacing the countertops.
Should you do it yourself?
If you’re good with repairs, you might be able to make some improvements — such as replacing knobs and handles or painting cabinets —yourself. But if your goal is an extensive remodel, you’re usually better off hiring a professional to do the work.
A contractor who knows what they’re doing can help you avoid mistakes, get the work done faster and save money. Also, some aspects of a remodel, like plumbing and electrical work, are highly specialized and are best left to the experts.
How can I pay for a kitchen remodel?
If you aren’t paying for a kitchen remodel in cash, you have a few options for financing the work.
- Home equity line of credit — A home equity line of credit, or HELOC, allows you to borrow repeatedly against your home equity up to an approved amount. It could give you the flexibility you need to finance ongoing home renovations. But it can put your home at risk if you aren’t able to pay it back since your home acts as collateral.
- Home equity loan — A home equity loan lets you tap into home equity by borrowing a lump sum and then paying it back on a predetermined schedule. Taking out a home equity loan could make sense when you’re more certain of the total amount you want to spend and you’re looking for a way to borrow what you need all at once. Your home will be used as the collateral for the loan, so it’s smart to be certain you can repay the loan on time before going with this option.
- Cash out refinance — If you’re planning to refinance your mortgage, you could apply for a cash out refinance to get money to spend on your kitchen remodel. This method may make more sense if you’re refinancing anyway, as you’ll typically pay 3% to 6% in closing costs on the new mortgage.
- Credit card — Some home improvement stores offer credit cards that have discounts or other perks. An advantage of using a credit card is that you aren’t borrowing against your home, so it may be a good choice if you don’t have much equity or don’t want to use your home as collateral. But interest rates on credit cards are typically higher than on other financing methods, so you should weigh whether that extra cost is worth it.
- Personal loan — An unsecured personal loan doesn’t use your home as collateral and could be a good option if you don’t want to borrow against your home. Interest rates are often higher with this type of home improvement loan than on secured loans. This choice might be best for small projects that you expect to pay off quickly.
Should I remodel my kitchen?
Remodeling can be an expensive undertaking, so you’ll want to think it through before committing to a project.
- What’s your motivation for remodeling? For example, do you want to improve your home’s market prospects, boost energy efficiency or make your kitchen more accessible?
- What’s your budget, and what can you realistically achieve for that amount of money? Keep in mind that home improvements often end up costing more than expected, as you may run into surprises like additional items that need to be repaired or replaced.
- What’s your timeline? Be aware that a kitchen remodel is not a quick fix and may take weeks or months to complete.
- How will your life and finances be affected while your kitchen is unavailable for daily use?
- How long do you plan to stay in your home after remodeling? Do you plan to sell soon or do you want to keep the home and enjoy the upgrades? If your remodeling needs aren’t urgent, you may want to consider doing the upgrades in stages to spread out the expense over time.
© 2023 Zonda Media, a Delaware Corporation. Complete data from the Remodeling 2021 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.