Does having a new kitchen really drive up the value of your home?

Other thread got me thinking

Some friends of mine have invested in new kitchens and hope to sell down the line with the thinking that their house will appraise for more, sell for much more than they bought

One home in mediocre area, another in westbury

I live in mediocre area and haven't updated my kitchen because for one I can't afford it currently and also because I can't see it leading me to a profit if I did sell. I can't even see it getting a return on what I would invest (like I don't think I would break even with the cost of an updated kitchen) - especially being that I reside in a middle of the road, working class area.

What do you think ?

Or if you did update your kitchen and sold - did you get your money back? Or profit?

Re: Does having a new kitchen really drive up the value of your home?

Re: Does having a new kitchen really drive up the value of your home?

I always tell people to renovate the kitchen if THEY want to, not with the goal of making any money/raising the value of your home.

The reality is, kitchens sell homes. Homes with renovated kitchens do sell more quickly (and for more money) than comparable homes with a dated kitchen.

HOWEVER - You will NOT make back -- dollar-for-dollar -- the amount you put into the renovation. Therefore, if your home is currently valued at $400K, and you spend $450K on a kitchen reno, your home is not then automatically worth $450K (or more). It will be worth more than the original $400K, for sure. But how much you will get back on it depends on the area, the comps, what type of renovation you do.

Keep in mind that it is easy to overimprove your home. You always have to keep in mind where you live and what buyers looking in that area expect (and can afford). The expectation for a renovated Levitt kitchen is going to be different than a home on a large north shore estate or out in the Hamptons. I see overimprovements a lot in co-ops... with that type of property, many buyers would prefer to get the cheapest price possible and do their own renovations (since we are talking about strictly cosmetics in a small space).

I just had a consult with sellers last week who has had a tough time selling their home, and they think part of it is that they have a very dated kitchen. But they also don't have a lot of equity in the home. So my advice was to give the kitchen a quick, sweat-equity face lift, doing things like painting dark cabinets, putting on new hardware, etc. Sometimes minor changes that you can do yourself (that only cost a few hundred dollars, and some time) are a way to stop a dated kitchen from hindering a sale. But in that case, no value (or negligible value) would be added. It would just make for a quicker sale, perhaps. I always say it's like having a choice between 2 one dollar bills. One is dirty and crinkled and one is clean and crisp. If given a choice, everyone will grab the clean, crisp one first. But it's still only worth a dollar. No one is going to pay $1.25 for a one dollar bill, even if it looks better than the other one.

So bottom line - Kitchens are important for selling homes, but do not renovate strictly to make a profit on your renovation. Because you won't. You will increase value, but the cost of the renovation will outweigh any increase in value in the home.

Does having a new kitchen really drive up the value of your home?

Thanks! I liked the dollar bill analogy

I used to think this was my forever home but now I think that changed. And Christine - the point you brought about over improving your home is kind of what I guess I was asking - especially it a specific area is more in the 250-350 range.

My friend who lives in same town and did her kitchen wants to sell in a few years. I'm curious to see how much more they get. This is part of the reason why I held out on a whole new kitchen (back when I could afford it). My mentality was I rather have the money in the bank and sell and net maybe a little more than i bought for and walk away with my savings - rather than invest all that money and maybe only sell for a smidge more.

But I do like your ideas of little face lifts.

Sorry if I'm not making sense - have not had my coffee yet !

Does having a new kitchen really drive up the value of your home?

I agree, I think the biggest factor can be the neighborhood. For us, we purchased our house already appraising at $50K more than we paid for it. We are doing a gut reno in our kitchen, probably spending about $40K -$50K between the kitchen and dining room. Does that mean that I think our house will sell for $100K more than what we paid for it? NO. But I am building the kitchen I want to live and cook in for the next 20 years, not what I want to sell in 5.

Re: Does having a new kitchen really drive up the value of your home?

Posted by EatingMyVeggies

Thanks! I liked the dollar bill analogy

I used to think this was my forever home but now I think that changed. And Christine - the point you brought about over improving your home is kind of what I guess I was asking - especially it a specific area is more in the 250-350 range.

My friend who lives in same town and did her kitchen wants to sell in a few years. I'm curious to see how much more they get. This is part of the reason why I held out on a whole new kitchen (back when I could afford it). My mentality was I rather have the money in the bank and sell and net maybe a little more than i bought for and walk away with my savings - rather than invest all that money and maybe only sell for a smidge more.

But I do like your ideas of little face lifts.

Sorry if I'm not making sense - have not had my coffee yet !

Re: Does having a new kitchen really drive up the value of your home?

Kitchens sell houses.

Now granted if you put in a new kitchen you may not recoup the $$$ you put in, but new and updated kitchens definitely make houses more attractive.