Improving or Moving

April 11th, 2007 § 2 Comments


I was recently asked, “How much should I invest in my kitchen remodel to get the best return on my investment?” That is an excellent question. How do you know where to stop? Should you buy that new Viking Range you have been ogling? Should you spring for a new built in refrigerator? Where do you draw the line? I say start with a plan. What are your goals for this house? Are you moving in 5 years or is this the family homestead where you will raise your kids, have the family gatherings, and the only way you plan to leave is feet first? You can gauge how much of your own personality and pocket book you want to invest in your remodel if you know you are planting roots.

For short term goals where return on investment is a major consideration, then plunking down too much may mean being upside down on your remodel investment. Check with your Realtor. Find out what comparable houses in your neighborhood are selling for. Given the current market conditions as of Spring 2007, we witnessed a slow down in new home sales in 2006, and thus a 20% reduction in returns on remodeling projects compared to 2005. Follow the link to Realtor.Org for a comprehensive cost verses value report covering 25 popular remodeling projects performed in 60 US cities. 19th annual cost vs. value report

The report shows that you can expect a 75.8% return on your investment for an upscale (major) Kitchen Remodel, 80.4% return for a (major) midrange kitchen remodel, and 85.2% return on a (minor) Kitchen remodel. For a downloadable report by city, click here. Not ready to tackle your kitchen yet? James and Morris Carey recently published a great article on “modest” repairs and “safety upgrades”. They did reiterate of all the possible remodels, Kitchens and Master Baths, are still ranked on the top of their list.

Remodeling will always be a good investment, but a little research in advance goes a long way. I’ve walked through plenty of Realtor open houses and wondered what the homeowner was thinking building an “ode to marble”, over building in an neighborhood that does not warrant a mega mansion. Remodeling choices should take into consideration the integrity of the neighborhood and style of the house. Style can be achieved on all budget levels. Style does not mean buying the most expensive fixtures and finish materials. On the flip side, I have witnessed some atrociously cheap kitchen remodels in estate style homes that screamed “rip out and replace” and wondered how much of a buyer’s credit will be negotiated. A good return on your investment does mean good planning, functional layouts, well-built cabinets, updated appliances and fixtures and most importantly the finished remodel should show that it was professionally installed. Lifting tiles, lipping, cracked grout, poor lighting, peeling paint, painted shut cabinet doors or windows, missing crown molding or baseboards are signs of the “do-it-your-self” weekend warrior who never finished the project. If you can’t tackle it from start to finish – don’t start.


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§ 2 Responses to Improving or Moving

  • Peggy Deras, CKD, CID says:

    There is one more aspect to remodeling a kitchen that is tangible and profitable to a homeowner, who plans to sell down the road. This is not reflected in the Cost vs. Value statistics.If you own a home that has a kitchen that is dragging down the value of the home because it is not an “easy remodel”; but your home is in a desirable neoighborhood, then you will reap more than 100% return on your investment.And your remodel will appreciate with the house so your investment appreciates while you enjoy living in it!Here in the San Francisco Bay Area we have lots of homes like that.They are not “flipper” candidates because it costs a bundle to do the remodel.But with a good designer, and a great plan, you can turn a dog of a house into a dream house by doing a major kitchen remodel that corrects deficiencies in the house that can’t be addressed in any other way.Nice blog Laurie.

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  • Laurie Burke, Kitchen Designer says:

    Thanks Peggy for the comment. Yes, I agree with you. Too often I have come across “updated” floor plans that exemplifies “throwing good money after bad”. With better space planning and the advise of a professional kitchen designer, costly mistakes can be averted.

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