Apr

26

Kitchen Remodeling ROI - Return On Investment

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Kitchen Remodeling
Scott Hares asked:


The cost for your kitchen remodeling project should be based on the value of your home. Investing too much could lead to a poor return on investment or a home valued outside the local market expectations. 15% of home value is a good rule of thumb for a kitchen remodeling budget. Following 15% of home value, it is not inconceivable to get 80% to 90% or more return on investment.

Usually you can expect a lower return on investment for more major remodeling projects due to the increased cost involved in a major remodeling project. If a kitchen has been neglected or is dilapidated you can expect a lower return on investment because much of the cost is consumed by bringing the kitchen to a livable standard rather than actual improvements.

A 100% return on investment is possible. But rather than working designing towards that figure, consider livability as a major component in your kitchen remodeling project budget. Especially if you plan on living at the home for some time to come. You might even love your new kitchen so much that you forget about any notion of selling and moving out.

New kitchen appliances can often be all that is needed in a kitchen remodel project, and can be relatively inexpensive since there is no labor involved other than delivery and installation. Plus, since new, good quality appliances are pleasing to prospective buyers, they can have a favorable return on investment.

Your homes size and your neighborhood should be considered too. If your improvement or remodeling project are extensive compared to the rest of the neighborhood or size of the home, then a high expectation of return on investment may be unrealistic.

You can also consult a local real estate agent to get a good idea of how extensive of a kitchen remodeling project to fund. A good real estate agent with knowledge of your neighborhood should be able to give a good indication of your remodeling project ideas effect on the value of your home. Even if your remodel project is for your own satisfaction, and you have no intent on selling and moving, a real estate agent will usually have a good idea of how much previous clients spent on their kitchen remodels, and the resulting increase in home value. Consider offering the agent a flat fee for their opinion if you have no intent on selling.

To summarize, a kitchen remodeling project can greatly increase the value of your home, and make it sell faster. Return on investment may, or may not be important to you depending on if the project is for your own satisfaction or for selling the home. But do be carefull that your project does not price your home out of the neighborhood.



Kansieo.com

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