I was doing some research for a client who is looking for a contractor to remodel their kitchen. Since they will not be moving for a few years they've decided they would enhance the livability of their condo. The next question they posed to me was how much of a resale value they can get from remodeling their kitchen.
It really depends on how much remodeling they intend to do. Is it just a minor remodeling just changing out new hardware, replacing cabinets doors, and installing a new sink or a major one that starts the kitchen from scratch? Even if it's a full scale kitchen remodeling, the return on investment is rarely 100%. Some of the analysis that I have done for my clients could range from anywhere 40-70% on the total remodel costs.
If you're exploring remodeling of your condo, there is some interesting data on this website (Remodeling 2010-2011 Cost vs. Value Report). The data is more applicable to single family homes but I thought it could be useful as a data point.
According to their report, a minor kitchen remodeling for a mid-range project cost an average of $23,210 in Seattle and the resale value is about 74.8%. The national average is 72.8%. As for a bathroom remodeling project (updating a 5 by 7 foot bathroom), it cost an average of $19,167 and the resale is 70.4%. The national average is 64.1%
There are some other factors you might want to think about when remodeling your kitchen. Is your condo a new project and you're doing some tweaking (changing the back-splash) in the kitchen to make it the way you like it? If so, the resale value on that improvement will be minimal compared to other homes in the same building with similar kitchen finishes (without that nicer back-splash you installed). Is a full scale kitchen remodeling necessary when your home is in an older building where other homes have average finishes? Sometimes over-improvement may get you a lower return on your investment than making just an average improvement.
Returns aside, if you're just enhancing the livability of your home and know that you will be enjoying for many years to come or perhaps renting it out in the future, the comfort you get from the improvement may exceed the strict financial returns you're looking for.
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