Kitchen remodeling ROI - Return on investment

About your kitchen remodeling/improvement project return on investment.


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Cost should be in line with the value of the home. You don't want to invest so much money that your home is worth more than the local real estate market norm. Following the 15% of the homes value rule will help limit the spending to a range that will be recovered during resale of the home. It is quite common to see 80% to 90% ROI (return on investment), or even more.

Major kitchen remodeling improvement projects typically have a lower return on investment than do more minor ones. Obviously the higher cost of a major remodel or repair is the prime factor in this. Especially if the project is considered major because the kitchen is dilapidated in the first place. In this case, some of the cost is not for 'improvement' rather bringing the kitchen up to acceptable standards by replacing cabinets beyond repair and other things.

An ROI of 100% or more is not inconceivable. But even if you don't reach that mark, consider the livability that your kitchen remodeling or decorating project will mean to you, if you're planning on living in the home for a while. Chances are, you might love your new kitchen so much that you change your mind about moving.

There's no point remodeling a kitchen without replaing appliances in need of repair. The appliances - refrigerator, oven, dishwasher, etc. can account for a significant part of the budget. Return on investment factors in here too, since quality appliances satisfy buyers looking for a home that is ready to live in.

Consider the size of your home, and the neighborhood. If your home improvement projects put the value of the home too high for it's size or the neighborhood norm, your return on investment could suffer, so keep it realistic.

A real estate agent can be a good resource when considering how extensive a kitchen remodeling project to undertake. An experienced agent should be aware of your neighborhood, and the difference in value between a home with a remodeled kitchen and one without. Even if you are not considering moving, but rather want to remodel for your own satisfaction, real estate agents are usually quite aware of how much previous clients have spent on remodeling and how much the value of the home increased as a result, and how much would be too much.

In summary, kitchen remodeling is a great way to increase home value. Return on investment or ROI may be more or less important to you depending on your circumstances. Sometimes re-decorating is sufficient. More extensive improvement with cabinet replacment or re-build can reduce ROI. Be careful not to turn your home in a $100k neighborhood into a $250k home.

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