How Does A Kitchen Remodel Affect Home Value?
An updated kitchen will boost your home’s value in the majority of cases. Buyers are undoubtedly willing to pay more for high-end finishes and upgrades. According to a recent survey, 80% of homebuyers put the kitchen in their list of the top three most important spaces in the home.
A kitchen remodel or renovation helps your house stand out against the rest on the market. Having an updated kitchen can result in a faster sale for more money.
What Is The Average ROI Of A Kitchen Remodel?
How much money you’ll be able to recoup has a lot to do with how much you spend on the remodel overall. With the national average ROI being 54%, you can expect to recoup nearly $68,000 after spending around $126,000.
Smaller renovations costing less than $20,000 can come with an ROI of nearly 80%. ROI can also be influenced by your location. For example, ROI is higher in the pacific area of the U.S.
Of course, there is no one-size-fits all answer for ROI for a kitchen remodel. Your specific ROI will depend on location and extent of the project. An experienced real estate agent will be able to give you the best advice when deciding on upgrades.
How Much Does A Kitchen Remodel Cost?
The average kitchen remodel costs $25,438 in Arizona. Prices will range from $13,291-$37,607, according to HomeAdvisor. Let’s take a look at some factors that can impact the cost of this project.
You can expect to pay the following costs based on the size of the kitchen:
- Small Kitchen (less than 70 square feet): $5,000-$20,000.
- Medium Kitchen (between 100-150 square feet): $15,000-$40,000.
- Large Kitchen (200+ square feet): $30,000-$60,000.
The overall size of the kitchen is one of the biggest factors that can influence the cost of the remodel. For homeowners with a smaller kitchen, the price tag can be as low as $5,000, in some cases. Larger kitchens can cost upward of $60,000 for a full remodel.
How To Pay For A Kitchen Remodel
Choosing a financing option for a kitchen remodel should always depend on how extensive the project will be. For example, if you are simply adding a backsplash, you may choose to put the total cost on your credit card. However, if you wish to remodel your entire kitchen area, it’s suggested to look into one of the financing options below.
Home Equity Loan
A home equity loan will require you to put up your home as collateral. Generally, you will receive the funds for your project in a lump sum. You will eventually pay back the total amount by the month.
Personal Loans
Taking out a personal loan is a quick and easy way to take out any home improvement loan. The amounts of these loans can range from $1,000-$50,000-plus. Oftentimes, most lenders will offer plenty of time to back pay this loan. When you choose a personal loan, you will end up paying a lower interest rate than you would’ve paid with a credit card.
Credit Cards
If it won’t be an issue paying back the money quickly for a smaller remodel project, consider using a credit card. Just make sure to make more than the minimum payment each month until the costs are completely paid off.
Federal Programs
Offered by the U.S. Department of Housing and Urban Development, the Section 203(k) program allows homeowners to take out a new mortgage or refinance their current one. You can roll the cost of the renovations into the loan. There are limits on what these funds can be used for, but bathroom and kitchen remodels are typically covered.
Cash-Out Refinance
Cash-out finance is another popular way to pay for a kitchen remodel. Learn everything you need to about this option right here.
HELOC
A home equity line of credit (HELOC) will allow homeowners to use the equity in your loan. Homeowners may borrow a small amount of money at a time from their mortgage lender, all the way up to the approved amount. You will then be free to borrow once again after you’ve paid a portion of the loan back.
Conclusion
To put it simply, if making money is your goal, it may not be wise to put $80,000 into upgrades if you are only expecting to recoup $45,000. A smaller renovation project may be the best course of action in this case. Smaller but ideal updates can boost the value of your home right before it hits the market.
