How small kitchen renovations can yield big returns
A small kitchen remodel project can be a great investment for your home. Resurfacing kitchen cabinets, changing their聽hardware and making other minor improvements can boost your home鈥檚 value enough that they come close to paying for themselves.
Small kitchen projects earn a return on investment of more than 83%, according to the latest Cost vs. Value report from Remodeling magazine. That means for every $100 spent on the upgrade, a home鈥檚 value increases by $83, on average. That鈥檚 a much better return than many owners get from other home projects, including basement additions, bathroom upgrades and even replacing the roof.
You could also consider replacing one or two appliances with new ones that have high energy-efficiency ratings, updating your floor or countertops and applying a fresh coat of paint.
Such upgrades have many聽benefits. You鈥檒l enjoy your kitchen more, bump up your home鈥檚 value and maybe even command a higher price when you鈥檙e ready to聽. Overall, there鈥檚 a good chance that updating a kitchen will make you a happier homeowner.
Major vs. minor
Minor updates shouldn鈥檛 be confused with major kitchen upgrades, which can involve replacing all appliances, the sink, the countertops, the flooring and vents and adding an island. Such聽major overhauls can cost up to six figures for some upscale kitchens, says Peter Grabel, managing director of Luxury Mortgage Corp. in Stamford, Connecticut.
A major upgrade would increase the value of your home, too, but that increase may not come close to the amount of money put into the renovation, Grabel聽says. This is especially true if other homes on your street don鈥檛 have updated kitchens. 鈥淵ou鈥檇 want to do a major remodel more for personal reasons than financial ones,鈥� he聽says.
By contrast,聽the average cost of a minor kitchen remodel is about $20,000, according to the Cost vs. Value report.
Know your neighborhood
If you鈥檙e planning to update your kitchen design, it鈥檚 a good idea to first contact a few real estate experts in your community to see how much your home value might increase after a kitchen renovation, says Jim Amorin, an appraiser in Austin, Texas, and president-elect of the Appraisal Institute trade group. Talking to local real estate agents can help you know how much of your cost you can expect to recoup if you make specific changes to your kitchen. 鈥淵ou want to bring your kitchen up to the standards in the community, but you don鈥檛 want to price it out of range,鈥� he says.
You鈥檒l also want to have a good idea of what other homes are selling for in your neighborhood, says Diane Saatchi, an associate real estate broker in East Hampton, New York.
That way, you鈥檒l know the potential limits to how much buyers would be willing to pay for your home, regardless of the kitchen upgrades, she says. 鈥淚t鈥檚 OK聽to spend money to upgrade your kitchen, as long as what you鈥檙e doing is consistent with the rest of the house and the houses on your street,鈥� she says.
Other minor home improvement projects with major ROI
A minor kitchen remodel isn鈥檛 the only home renovation project that can give you a good return on your money. Here are some other small projects that offer a big payback:
- Adding attic insulation.聽Improving your home鈥檚 insulation can pay for itself and then some, letting homeowners recoup an average of 116.9%.
- Replacing the front door.聽Homeowners can expect to earn an聽ROI聽of up to 91.1% of the cost to replace a standard entry door with a 20-gauge steel unit.
- Replacing the garage door.聽聽Replace a 16-by-7-foot garage door with a new four-section door on galvanized steel tracks (but keep the existing motorized opener), and you could recoup 91.5% of the cost, on average.
How to pay for a kitchen remodel
You have several options for聽聽or other home improvement project. Paying for it聽from personal savings is always a good option, Grabel says.聽You could also consider refinancing or opening a home equity line of credit to fund the upgrades. 鈥淵ou鈥檒l just want to be sure to pick home remodel projects that give you the most value,鈥� Grabel says.
If your home needs upgrading and you鈥檙e deciding on a worthwhile project, consider a minor kitchen remodel. By completing this small renovation, you could enjoy a more beautiful kitchen and recoup a large portion of your investment.
This article first appeared at .
