The average return on a kitchen remodel refers to the amount of money you can expect to get back when you sell your home after renovating your kitchen. On average, a medium-priced kitchen remodel costing around $25,000 will return about 75% of that money when you sell. More expensive kitchens return a bit less money, while cheaper kitchen updates can return 80-100% at sale. Figuring out your possible return involves looking at things like:

  • Your local housing market
  • How big your kitchen is and what you want to remodel
  • The types of materials you use (like granite counters or custom cabinets)
  • What buyers in your area are looking for
  • How much remodeling will cost you

Crunching the numbers beforehand helps set realistic expectations. With good planning, most kitchen remodels can return 50-75% at sale. This can make your home more attractive and valuable for years.

Factors That Impact Returns on Kitchen Remodels

Several key things affect how much money you’ll get back from remodeling your kitchen. The main ones are:

  • Kitchen size and layout. Larger, open kitchens with islands tend to bring better returns than small, closed-off ones.
  • Materials and finishes. Using higher-end stuff like granite countertops and custom cabinets boosts value more than basic materials. But going over-the-top backfires.
  • Appliances and fixtures. Adding luxury brand appliances, sinks, and faucets brings good returns. But you don’t need the absolute top-of-the-line.
  • Local trends and preferences. Find out what buyers in your area are looking for. Modern? Farmhouse? That influences value.
  • Real estate market. Hotter markets mean higher returns. Remodeling in a buyer’s market is riskier.
  • Home’s age and condition. Updates to an older, dated kitchen bring better bumps than renovating a newer one.
  • Project scope and budget. Total gut jobs increase value more than simple upgrades. But limit costs to 10-15% of home value.
  • Quality of work. Great materials and workmanship bring higher returns than DIY or budget jobs.

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How to Estimate Your Home’s Value Increase from a Remodel

  • Research sales data for similar homes in your area that have updated kitchens. Look at how much more they sold for compared to homes without renovated kitchens. This will give you an idea of the potential value boost in your market.
  • Talk to local real estate agents to get their input on how much your home’s value could increase with a new kitchen. They will know what sells best in your specific neighborhood.
  • Use online calculators where you enter details about your home and planned renovation. It will estimate how much the project could increase your home’s resale value.
  • On average, expect to recoup around 75% of a midrange kitchen remodel cost when you sell. Fancy kitchens return a bit less around 65-70%.
  • Simple updates like paintappliances, or counters can return 80-100% at sale since they cost less upfront.
  • Incorporating sustainable practices into remodeling often generates higher interest in your home at resale
  • Kitchen remodels tend to return more money compared to bathrooms or other home renovations when selling.
  • The potential returns vary a lot depending on your location and market conditions when you sell. Hot markets equal bigger returns.

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Calculating Your Potential Return on Investment

First, you’ll need to estimate your home’s value before and after the kitchen remodel. A real estate agent can help determine accurate estimates based on similar homes sold in your area.

Next, subtract your total remodel investment from the estimated value increase. For example, if your home’s value rises by $50,000 after the remodel and you spent $25,000, then the value increase was $50,000 – $25,000 = $25,000.

Then, divide the value increase by the total remodel costs. Using the same example above, if your home’s value increased by $25,000 after investing $25,000 into the remodel, the calculation would be:

$25,000 value increase ÷ $25,000 remodel cost = 1 (100%)

The resulting percentage is your expected return on investment (ROI). An ROI of 50-100% generally means the remodel was worthwhile financially. However, a higher-end remodel over $50,000 will likely see diminishing returns.

Simple upgrades like new countertops or appliances tend to recoup costs better and have higher ROI. Crunching these numbers early when budgeting helps set realistic expectations.

Tips to Maximize Your Kitchen Remodel Returns

  • Make sure the remodel matches other homes in your area. Going way fancier than your neighbors can mean a lower return.
  • Focus on upgrades buyers want most – nice cabinets, counters, sinks, and appliances. These see good returns.
  • Shop sales and negotiate costs. This avoids overspending.
  • Use the existing kitchen footprint if you can. This saves on work and costs.
  • Spend more on focal points like the island, sink, or appliances. These get noticed.
  • Stage your kitchen nicely when selling. This shows off the upgrades.
  • Time the remodel before listing your home. Returns go down over time.
  • Consider doing updates in phases. This spreads out costs.
  • Get several quotes to compare pricing.
  • Work early on with an experienced kitchen designer. They give good advice.

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Common Kitchen Renovation Mistakes to Avoid

  • Picking trendy styles that go out of fashion quickly. These can make your kitchen look dated and turn off buyers. Stick to classic designs.
  • Focusing only on what you want. Think about what future owners will like when picking materials and layouts.
  • Spending too much compared to other kitchens in your area. Fancy upgrades won’t help resale value if you overimprove.
  • Trying to save money by doing it yourself. But if the work is lower quality, your kitchen won’t sell for as much.
  • Not getting help from a kitchen designer. They know how to maximize function and flow in the space.
  • Starting work without calculating the return on investment (ROI). Know your potential home value increase upfront.
  • Hiring the wrong renovation company and having a bad experience. Check reviews and see past work first.
  • Buying lower-cost items that don’t last. Quality cabinets and counters help home value more.
  • Forgetting about lighting, storage, and work functionality. These matter more than looks to buyers.
  • Doing upgrades right before listing your home. Delays can mean your house sits too long unsold.
  • Thinking upgrades directly raise value. Some just make living there nicer for you personally.
  • Making layout changes limiting to future owners. Keep changes flexible.

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Key Takeaways for Maximizing Your Kitchen Remodel ROI

  • Aim to spend 10-15% of your home’s value on the remodel. Going over that amount means lower returns.
  • Cabinets, counters, sinks, and appliances give you the most bang for your buck. Focus spending here rather than specialty finishes.
  • Hire an experienced, reputable contractor and designer. Their expertise saves you time and money.
  • Time the remodel right before listing your home. The upgrades will be fresh for buyers.
  • Stage your new kitchen to highlight the finished product. Good styling emphasizes the improvements.
  • Research local real estate sales and trends. See what buyers want where you live.
  • Choose features with universal appeal rather than personal customization.
  • Select upgrades the next owner will enjoy too. Think long-term.
  • Calculate the ROI upfront to set expectations on costs and returns.
  • Carefully contain the project scope and budget. Overimproving risks lower ROI.
  • Balance splurges with value buys on brands. Get quality without overspending.

Conclusion

The average return on a kitchen remodel refers to how much money homeowners can get back when they sell their house after remodeling their kitchen. On average, homeowners can expect to get about 75% of their money back from a mid-priced kitchen remodel costing around $25,000. Homeowners can get a little less money back from very expensive kitchen remodels. They can get a little more money back from cheaper kitchen remodels.

There are many things that impact how much money homeowners will get back from remodeling their kitchen. These include the size of the kitchen, the quality of the materials, what buyers in the area are looking for, and how much the whole remodel costs.

To get the most money back, homeowners should not spend too much on their kitchen remodel. They should focus on updates that most buyers want like counters, cabinets and appliances. They should also talk to local real estate agents and use online tools to estimate how much their home’s value will increase from the remodel. By doing good planning, most homeowners can get 50-75% of their kitchen remodel money back when they sell.

Allison Schmidt