Posted on
June 17, 2021
by
Renee Brown
The kitchen is the heart of the home. When it’s well designed it can elevate the entire look and feel of a property, both in terms of appearance and in terms of functionality. And when it’s not, it can make an entire home feel dated and inefficient—which can be a big problem if you’re thinking of selling. Because it plays such an important role, many homeowners look to the kitchen first when making home improvements. But does a kitchen renovation increase home value enough to justify its expense?
A kitchen renovation is the third most popular type of home improvement, according to the National Association of Realtor’s (NAR) 2019 Remodeling Impact Report, with general kitchen upgrades coming in at number two. According to Remodeling magazine’s 2020 Cost vs. Valuereport however, the return on investment for all types of kitchen renovations—including mid-range and upscale remodels—is going down. So what gives? Below, we’ll go over what you need to know in answer to the question does a kitchen renovation increase home value?, including how you can make the most of your remodeling investment.
Does a Kitchen Renovation Increase Home Value?
In a word: yes. Most realtors will tell you that kitchens sell houses, but increasing home value and getting a big return on your spend aren’t the same thing. As you make a home renovation budget and determine which efforts are worth the cost, you’ll need to evaluate whether the expense of a major kitchen remodel is efficiently offset by the increase in home value that if affords.
Turning back to Remodeling magazine’s Cost vs. Value report, here’s how various degrees of a kitchen renovation increase home value:
Minor Kitchen Remodel – Midrange
Average cost: $23,452
Average resale value: $18,206
Recouped expenses: 77.6%
Major Kitchen Remodel – Midrange
Average cost: $68,490
Average resale value: $40,127
Recouped expenses: 58.6%
Major Kitchen Remodel – Upscale
Average cost: $135,547
Average resale value: $72,993
Recouped expenses: 53.9%
Data was not provided for midrange major kitchen remodels.
You’re rarely—if ever—going to get a 100% return on a home improvement investment. For that reason, it’s important to do a careful cost benefit analysis and determine whether it’s worth spending tens of thousands of dollars (the average cost of all kitchen renovations is $25,093, or $150 a square foot, according to HomeAdvisor) to increase your home’s value.
Key to keep in mind here is that just as a stunning, updated kitchen can sell a home, an outdated kitchen can stand in the way of a sale. So even if you can’t do a complete kitchen renovation, you’ll still have something to gain from making targeted improvements (more on those later).
