Published by FCT
Kitchen renovations: are they worth the added expense?.
Before you consider how much value a renovated kitchen will add to the value of your home, it’s worth asking yourself why you’re renovating in the first place. Are you hoping to sell in the near future and want to boost the sale price? Or are you planning on making changes to the space to better suit your lifestyle, and want to ensure you’re also adding value? The answers to those questions will make a huge difference in evaluating whether a kitchen renovation is the right move for you.
While there isn’t necessarily a conflict of priorities here (it’s okay to want a nicer kitchen and for your home to be worth more), figuring out the best way to spend your hard-earned dollars (and perhaps, if you should spend them at all) does require you to be clear about your ultimate motivation for the renovation in the first place.
If you’re interested in maximizing your return on investment, here are a few figures to bear in mind before tearing up your kitchen:
- According to a study by Royal LePage, kitchen renovations can boost the value of a home by 12.5%. (Bloomberg)
- Kitchen renovations can cost anywhere from $15,000 to $75,000+ depending on how extensive your plans are. (TheSpruce)
- The average cost of renovation is $50,000. (GreedyRates)
- Prospective sellers are willing to spend up to 5% of a property’s value on renovation on average, prior to listing their home for sale. Assuming a value of $485,200 (the 2019 median value of a Canadian home) that works out to $12,130. (Statista)
Now that you have an idea of the numbers you’ll be working with, let’s take a look at two scenarios for your kitchen reno.
I want to fix and flip it!
If your sole reason for re-doing your kitchen is to bump up your property value, you might be best served by avoiding drastic overhauls and focusing instead on more cost-effective changes such as:
- Repainting or refinishing cabinets.
- Installing new faucets and new cabinet hardware.
- Installing new lighting (within reason).
- Replacing countertops with better material.
It’s important to remember that the value added by a reno needs to be measured against what a buyer would have been willing to spend themselves, and/or if they’d have been satisfied with what was already there. It’s always a good idea to see whether something can be repurposed or refurbished instead of scrapping it and starting from scratch.
I want my dream kitchen!
Now if you’re more interested in having a beautiful kitchen for you and your family to use, expect to invest a fair bit into it—after all, you’ll be enjoying the space yourself for years to come, so it’s worth paying top dollar. Here are a few things to consider:
- New appliances will form a large chunk of the overall cost of your renovation—be certain that you’re splurging on the right ones! For example, unless you do a lot of cooking, getting a chef-tier stove is probably going to be less worthwhile than spending those extra dollars getting a top-of-the-line dishwasher.
- “Behind-the-scenes” things like proper wiring and plumbing are worth spending money on to ensure good work. Again, you’ll be living with these changes and you’ll get what you pay for. Don’t skimp and cause yourself issues down the line!
- Always plan for an additional 20-30% in unforeseen costs. You never know what issues tearing up your kitchen might uncover, and the last thing you’ll want is to be scrambling to find the funds to cover something you hadn’t expected to need.
The bottom line
Ultimately, a spruced-up kitchen will definitely add value to your home, but only by about 60-65% of what you’ll spend on renovating it. That’s why it’s a good idea to re-do your kitchen primarily because you want a better space for you and your family. Otherwise, there are other projects which will still increase your home’s worth, while being more forgiving on the wallet. Either way, the satisfaction and enjoyment of being in a space you helped shape is worth considering rather than solely looking at it from a monetary point of view!