The Cost vs Value series on Hanley Wood Remodeling provides some interesting data on the potential return on investment on various popular home remodeling products. Their 2015 data gives homeowners the resale value of remodeling projects figured into the sale price at the time a house is sold. Back in 2014, we explored the data for ROI for kitchen remodels. Today, we’ll be looking at the 2015 data for the Columbus, OH market and see how it compares.
The projects in the Cost vs Value report are separated into midrange homes and upscale homes. While the price range isn’t specified, from the cost of the projects, you can get a fair idea of what sort of homes they would be done inside. In mid-range homes, for major kitchen remodels, homeowners spent an average of $56,500 and recouped about $34,000 at resale. This comes out to a 60.5 percent ROI. With minor remodels, about $19,000 was spent, but as much as $12,500 was recouped later at resale, a 65 percent ROI. In upscale homes, there were only major kitchen remodels mentioned. On average, an upscale kitchen remodel cost upwards of $113,000, but only recouped about $54,000 for an ROI of about 48 percent. These ROI numbers are all much lower than the 2014 data showed.
So what did these remodels involve? A midrange major kitchen remodel typically remodeled an outdated kitchen of about 200 sq. feet. It also included a 3 x 5 island, laminate counters, and energy efficient appliances. The cost also included resilient flooring and finish such as paint, trim, and ceilings. Upscale major remodels were similar, but upgraded to high-end custom cherry cabinetry and stone countertops. They also included commercial grade appliances, and other luxury items such as built-in warming drawers, trash compactors, designer faucets and built-in water filtration systems.
A minor remodel would involve simply updating a functional kitchen by keeping the cabinet boxes in place. They would then replace the fronts with new raised-panel wood doors and drawers, plus new hardware. The wall oven and cooktop would be replaced with new energy-efficient models. Existing laminate countertops would be replaced with new ones, a new mid-range sink and faucet, a new coat of paint, wall coverings, and new similar flooring.
What can we take away from this data? It seems that people are generally happy with their kitchen’s functionally, but need an updated look and feel. The upscale remodels tend to be gut jobs and focus on installing high-end cabinets, counters, and gadgets. From a financial perspective, it seems that the midrange remodels recoup more ROI in home resale value, especially the minor remodels. But for upscale homes, the major remodels are likely worth the emotional value of creating a hub for family time and gatherings with company.
In any remodel, it’s important to consider the value that a remodeled space provides you and your family and friends. The financial benefits of a remodel should be always considered an extra benefit. The kitchen is such an important part of a home that the numbers may not fully reflect the actual value to a potential buyer down the road. The numbers definitely can’t portray the full value of your newly remodeled kitchen to you and your loved ones, either. No matter what your budget, an updated kitchen is definitely worth pursuing.