A kitchen remodel is often labeled as the crown jewel of home renovations. And rightly so, as it is at the heart of your home and holds unparalleled aesthetic and functional value.
But is it all about a modular look?
Certainly not!
You see, if opinions from real estate experts are any suggestion, remodeling your kitchen also carries a significant ROI or return on investment. So much so that it makes your home highly sought after on the real estate market and increases its resale value.
So, how much does remodeling a kitchen add value?
This is one question that my clients often ask me while undertaking kitchen renovations. And I am sure you’re curious about the same.
Read on, as I break down how much value will a kitchen remodel add to your property based on data-backed research and my own experience as a Long Island remodeling contractor.
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What is the ROI on kitchen remodel?
In order to fully understand how much value does a kitchen remodel add in exact dollar terms, it is important you know the ROI on these projects.
An ROI or return on investment stands for the total percentage of your kitchen remodeling cost that you stand to recover while selling your home. And for a kitchen remodel project in New York, this is in the range of 50 to 80 percent.
However, your actual return on investment will depend on several factors like the extent of remodeling, your location, local market trends, and more.
Here’s an average ROI that you can expect if you were to remodel your kitchen today or sometime in near future:
1. ROI on mid-range kitchen remodel
According to real estate pundits, a mid-range kitchen remodel involving functional or cosmetic changes fetches the highest ROI. As such, you can expect to recover anywhere between 60 to 80 percent of your initial investment.
This is higher than the ROI and subsequent home value addition on bathroom remodel projects, among others.
2. ROI on high-end kitchen remodel
An upscale kitchen renovation has more to do with luxury additions like marble countertops, fancy appliances, wood or leather work, etc. And this is where the ROI is lesser compared to mid-range upgrades.
So, if you’re planning a high-end remodel, expect a return of 50 to 60 percent on your total investment.
But that said, upscale renovations often recoup the highest dollar figure since the upfront investment is also very high.
How much does remodeling a kitchen add value in dollar terms?
Now that you know about the ROI on different kitchen remodeling projects, you’re sure curious how much value will a kitchen remodel add exactly.
For starters, there isn’t a fixed average value hike. That’s because a complete kitchen remodel can increase your home’s value by anywhere between $5,000 to $50,000.
Meaning, it all comes down to what are you remodeling in your kitchen and how much you’re investing in total.
Let be break this further down for you based how much value addition each kitchen remodeling type can fetch you:
1. Minor kitchen upgrade
As the name suggests, minor kitchen upgrades involve cosmetic upgrades only. For instance, if you repaint your kitchen walls or change fixtures, these kitchen makeovers will be counted as minor changes.
Here, you’ll typically invest in the range of $8,000 and $20,000 for everything from materials to labor and permits (if any). And this is one category that brings the highest ROI, roughly between 75-80 percent.
In terms of total value addition, you can expect a project like this to increase your home’s resale value by $5,000 to $15,000.
2. Mid-range kitchen upgrade
Medium range kitchen upgrades are all about functional replacements and additions. And although these changes cost more than a cosmetic remodel, they can’t be considered as luxury additions.
For instance, if you’re replacing kitchen appliances with smart ones, expanding storage, or adding a chimney, these will be considered minor upgrades.
A project like this will cost you in the range of $25,000 and $50,000, all inclusive, and bring an ROI of 60-70 percent.
But how much does a kitchen remodel improve home value in this category?
Well, you can expect to increase your property’s value by $17,500 to $30,000, depending on how much you invest in the above range.
3. Upscale kitchen remodel
An upscale kitchen remodel will include extensive changes to the space and use higher-end materials. And it might include changing your kitchen’s design and layout bottom up.
For instance, custom built vanities, cherry laminate flooring, custom lighting, luxury appliances, are all part of a high-end kitchen remodel.
Now, for a project like this, you’ll likely invest $60,000 and upward, attracting an ROI between 50 and 60 percent.
As such, this will increase the resale value of your home by $30,000 to $50,000 or upward, based on your total upfront investment.
Note: Total home value addition differs from region to region
Although the above breakdown of total home value addition out of kitchen remodeling is typical for New York markets, the figures are yet not absolute. That’s because how much does remodeling a kitchen add value overall differs for different regions.
For instance, a mid-range functional kitchen upgrade gets you an average ROI of 60 percent. However, if your property is located in a competitive market like Long Island City or Upper East Side, the same upgrade can fetch you a return of 70 to 80 percent.
And the reason for this is simple: These are high in demand urban areas where modern kitchens are a must-have.
3 Things to consider before remodeling your kitchen for value addition
So far in the blog, you already know how much value will a kitchen remodel add to your home. In fact, you might also have calculated your own dollar figure after factoring in your investment and location.
Nevertheless, it is also essential that you approach a kitchen remodel wisely to avoid a reduced ROI or ending up with a loss.
All in all, here are three things I suggest you keep in your mind before starting off:
1. Plan your budget strategically
The total amount you invest in remodeling your kitchen should be realistic and based on the current value of your home.
For instance, I always suggest my clients to not spend more than 10-15 percent of their homes’ current market value in order to avoid overcapitalization.
So, let’s say your home is valued at $500,000. In this case, my advice will be to not overshoot the budget beyond $50,000-$75,000.
Also, you should set aside 10-20% for unexpected expenses out of the total amount you’re planning to invest.
2. Don’t ignore structural systems
Some changes to your kitchen like moving walls, replacing plumbing or electrical outlets, etc., might involve altering your home’s structure. And not only do these call for professional execution but you will need a permit for kitchen remodel too.
Meaning, if your kitchen remodel plan includes changing the structural system, I suggest you first factor in the total time and budget you have.
3. Research your local real estate market
Before you even plan a kitchen remodel, I strongly recommend you gather all relevant information about your local real estate market.
For instance, find out what kind of kitchens are attracting the most buyers and the total ROI that different remodeling projects are generating in your area.
Frequently asked questions
How much does a kitchen remodel cost?
There isn’t a fixed cost of kitchen remodel, which means the total cost will depend on the scope of your project.
Here’s an average kitchen remodeling cost breakdown based on the type of remodel you opt for:
- Minor remodel: $$8,000-$20,000
- Midrange remodel: $25,000-$50,000
- Major remodel: $60,000 and above
Does kitchen remodel increase home value or not?
Yes, it does.
However, the total increase in value depends on factors like the quality of remodel plus your local market.
Overall, a kitchen remodel in New York can recoup 60-80% of your total investment.
Should you DIY or hire a professional for remodeling?
Being a kitchen remodeling contractor myself, I know firsthand how complicated a project like this can be. Not to mention, it might even include navigating local building codes and obtaining an ALT1 or ALT2 permit if your property is anywhere in NYC.
So, I suggest you hire a professional remodeler to avoid risking flawed upgrades or local code violations.
Will remodeling help sell your home faster?
Absolutely!
An updated kitchen will make your home more attractive to buyers and thus reduce its on the market.
Invest in a Kitchen That Pays Off!
We will upgrade your kitchen with designs that add style, functionality, and long-term value to your home.
Conclusion
By now, you know for sure how much does remodeling a kitchen add value to a typical New York home. Also, you know which remodeling type will fetch you how much value addition.
As a rule of thumb, I suggest you ascertain the total value of your home before starting a remodel project. Thereafter, set aside a maximum 15 percent of your total home value for a kitchen remodel.
Got more questions or need assistance with your kitchen remodeling project?
You can get in touch with us!
At Creative Design Ceramic and Tile, we are kitchen remodel experts with hands-on experience and 38+ years of expertise. And we’ve got top-notch remodeling solutions for your kitchen on a budget.