Home Buying in 07450>Question Details

Asid, Other/Just Looking in 07450

How much should I spend on remodeling my kitchen? We bought the house for $660k in 2008. It it true that I should spend 10% - 15% of the homes value

Asked by Asid, 07450 Tue Aug 31, 2010

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Hi Asid. I never heard that formula before, spending a percentage of the value of a home on a remodeling job. I was a general contractor in NJ and Philadlephia for almost 15 years and never used this formula.

I'd hate to see you over-improve your home. Why not visit some communities with houses in your price range and look at what kinds of kitchens they've installed? It's always a great place to get ideas, too.

When you do install your kitchen, make sure to buy a high-end appliance package including Wolf, Fisher-Paykal, Viking, Sub-Zero, Miele. Kitchens give you more bang for your buck than any other improvement except an addition, which = more space.

GOOD LUCK!

Scott Miller, Realty Associates, Boca Raton, FL
2 votes Thank Flag Link Tue Aug 31, 2010
>>When you do install your kitchen, make sure to buy a high-end appliance package including Wolf, Fisher-Paykal, Viking, Sub-Zero, Miele.

Wrong answer! What you should spend depends on your local market/similar homes on your block. And it does make sense to arrive at a max percentage of a home's value in figuring out a total budget. Maybe 20% is the max? I don't know, but I think it makes sense to look at it that way. Thanks.
Flag Sat Mar 7, 2015
Agree with Scott, I've also never heard this formula - spend carefully with an eye towards enjoying the upgrades yourself and not counting on recouping your full investment. While you will likely not recoup your full investment, what upgrades and improvements will do is improve the likelihood and time to sell.

Good luck,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Thu Sep 2, 2010
Asid,

Excellent question. There are no hard and fast rules regarding kitchen remodeling. Obviously, you want to remodel the kitchen in a manner that works for you from both an aesthetic and functional standpoint since you will be cooking and eating in the kitchen that you design.

If you are thinking about it from a purely financial perspective then you must also take into account the average price of homes on your street. You don't want to over-improve so that your home becomes one of the most expensive homes in the neighborhood.

As a very general rule of thumb, you don't want to invest more than 25% of your purchase price into a home for ALL renovations including kitchens, baths, additions, etc. Going above 25% will usually price you out of the neighborhood. Potential buyers will also look at what you paid for your home and will not usually want to pay a premium for the renovations you made.

The link below should be helpful. It lists the rate of return you can expect for different renovations - including kitchens.

http://www.remodeling.hw.net/2008/costvsvalue/division/middl…

Please call me at 201.906.3287 if you need more info or have an other questions.

Good luck with your renovation!

Thanks.

-Al Donohue
Partner | Marron Gildea & Donohue
1 vote Thank Flag Link Tue Aug 31, 2010
Kitchens are one of the most important areas of the house. You can take some "short cuts" ie not top of the line appliances but still good models such as GE profile series. As for price - that is of course up to you. I can tell you that I've seen wonderful kitchen done by Home Depot in multi million dollar houses. Check outall of your options
1 vote Thank Flag Link Tue Aug 31, 2010
Hi Asid
You should spend what is in your price range, If you are able to afford $50,000 to $60,000 on a kitchen remodel it sounds realistic & should be gorgeous when it is finished.
1 vote Thank Flag Link Tue Aug 31, 2010
Joan, I agree that the cost of kitchen remodel is totally dependent on your price range. I think I would determine what my price range is before deciding on any remodeling job. I personally haven't heard of a formula to determine how much to spend on a remodel. I think you can make some nice changes to a kitchen even with a small budget. http://www.jackhandleyconstruction.com/services.html
Flag Mon Jan 19, 2015
Asid:

The answer to your question will really depend on your income and your goal with the remodel. If you are going to stay in this home for the next 20 years and cherish the idea of cooking and spending time in this kitchen then the cost is less important. However, if you can see yourself selling in 5 years then you must be very prudent with your improvements as to not out pace the neighborhood. Think about your end goal and then work backwards. best
1 vote Thank Flag Link Tue Aug 31, 2010
Asid,

I would never spend that much on a kitchen unless you plan on enjoying it for a decade or more. You will never get it back if you were to sell the house. But if it's for your own enjoyment for many years, that's a more subjective decision.

On a kitchen in your price range in Bergen County the norm is $15,000 to $60,000.

Regards,
Michael Shetler
Web Reference: http://buyinginbergen.com
1 vote Thank Flag Link Tue Aug 31, 2010
Asid,

People that provide you with percentage information such as this are always looking for the easy way out.....if you have money you don't mind burning you can apply this formula....otherwise, consider meeting with several contractors to get their recommendations and estimates.

IMO a kitchen that costs between 65 and 80k may be a bit excessive.

Bill
1 vote Thank Flag Link Tue Aug 31, 2010
I don't know that I've ever heard a hard-and-fast rule for how much you should spend on a kitchen remodel. I think that really just depends on what you want to add or change in your kitchen. However, if you're planning on reselling your home, the amount that you specified sounds about right. That's especially true if you want to make sure that you add enough value to your home to recoup the remodel costs. http://kansascityremodel.net/services/kitchen-remodeling-kan…
0 votes Thank Flag Link Fri Apr 17, 2015
I would talk to an agent for sure about this. They know how much homes in your area are going for. You don't want to spend more money on something than you have to. An agent will help you set a cap. http://www.k-binnovations.com/kitchens/
0 votes Thank Flag Link Wed Apr 15, 2015
It depends on what materials you plan on using. It's true that you don't want to spend too much on your home. People don't want to buy a house that's really expensive. Do you know the contractor who's going to do it? Maybe you could get a discount? http://www.qualitystonecountertops.net/Home_Improvement_Nich…
0 votes Thank Flag Link Fri Mar 6, 2015
No exact rule of thumb really....different paybacks in different real estate markets. You should really consult an experienced Real Estate agent who specializes in your neighborhood. In Denver kitchens go out of style in about 5-8 years....18 years ago it when I first became a real estate agent, golden oak was in with tile countertops, 10-13 years ago it was all about maple and granite tile, then it was cherry and slab granite, now its expresso or white cabinets and Caesar Stone. The investor that I work with puts in $12K-$15K kitchens in $500-700K homes in the urban neighborhoods where the buyers are young urban professionals or empty nesters that are moving back into the urban neighborhoods and those buyers LOVE them....for most people, at least in Denver, it's all about the current LOOK not about the best quality, and because the trends are changing so fast you might not want to put in a state of the art kitchen because no matter how much you pay for it now it will not be to the buyer's taste 10 years from now, so at the time of sale the buyers will discount the home because the kitchen is dated.

Elizabeth clayton, realtor Denver, Co
0 votes Thank Flag Link Wed Aug 21, 2013
Asid-

There are two rules of real estate that run in direct conflict with one another:
1. The majority of buyers want the winner of the beauty contest in this market. In other words, they don't understand sweat equity.
2. The cost of your improvements does not reflect in direct market value. If you put 100K in, the amount of return you might expect is 20K in market value

So your question might be...What should I do?

Here are the questions to ask yourself first, and be honest.....Is my home move-in ready? What are it's weaknesses? Are the weaknesses strong enough to keep buyer's fingers off the trigger?

If the answer is yes to question one, then you might want to hold off. But if the answers to the latter 2 questions would keep you away, then renovate but Spend Smart remembering rule #2 above. For ex. 30K for kitchens and bath's total might only get you 5K more in value, but the more important result is selling and losing less.

Selling your home is a game of Truth or Dare. The truth is honestly looking at the home you love with the buyers eyes. The dare is having the nerve to withstand buyers remarks and your agents honest evaluation of the process.

Good Luck with your choice and should you want an honest evaluation, I am reachable at 201-286-7206

Sean
0 votes Thank Flag Link Fri Dec 24, 2010
Hi Asid,
The key here is to determine values of other homes on your street and near vicinity NOT a % of home value..
I find most buyers do not want to remodel and ones that are considering homes that need work want a deep discount. A remodeled kitchen is quite desirable and will bring you more in the sale price BUT you must be careful not to over-invest in your neighborhood.
Before you begin the job, investigate sale prices of Comp. homes..not listing prices. This should give you a guideline of what your home would sell for with the new kitchen. When proceeding with the job and while you make selections on materials keep to a strict budget if you think you might be selling in less than 5 years.
Good Luck!
Chris Gubb
0 votes Thank Flag Link Fri Nov 5, 2010
Asid
How long do plan to live in the house? If it is a long time, remember this is your home. You should be happy in it. Spend what you can afford to get what makes you happy. If you will not be in it a long time then pay more attention to marketability and return on investment.
0 votes Thank Flag Link Wed Sep 1, 2010
As mentionned earlier Kitchen is one of the most important areas of the house but there are several factors you need to take into count as your own preferences, what do you like and what do you need and then of course how long will You stay in this house after 5 to10 years the kitchen may already bee outdated and needs to be updated again. It all depends on your personal taste and in my opinion you should spend the amount you are able to afford and make it nice for your taste. if you are planning on moving out soon you need then to think of something less original and use colors that may please more buyers. There are several ways to go and I usually recommend people to go to different showrooms and look though magazines for ideas and then shop around for the materials and deals.
0 votes Thank Flag Link Wed Sep 1, 2010
Here are some very average prices from Remodeling Magazine:

http://www.remodeling.hw.net/2009/costvsvalue/division/middl…

Scott
0 votes Thank Flag Link Tue Aug 31, 2010
It is not rue that you "should spend 10%-15% of the home's value."

As to what you should spend . . . well, Asid, it's like this. If you're going to live there for the next ten years, do whatever you want, because ten years is about the life-span of virtually all kitchen remodels.

Kitchen remodels rarely pay for themselves, mostly because the existing kitchen retains some functional value, and also because after you've done the kitchen, you now have the bathrooms to upgrade. It's never-ending, I tell ya!

If you know that you're not going to stay there for at least five years, then consider "making do" with what you've got. Maybe a new floor surface or countertop. But figure that the next buyer will probably want to redo the kitchen, and the baths, and whatever else is on the upgrade calendar.

Hope this helps,
0 votes Thank Flag Link Tue Aug 31, 2010
Asid-

When redoing a kitchen the consumer must juggle a few key components...Budget, Space Constraints, and Quality. It is not necessary to spend more than 15% to get a fantastic kitchen but with careful planning you could spend less than that. Today there are so many wonderful options available today. If you are planning on staying in your home for 7+ years the most important thing you can do is to make the Kitchen timeless by using Classic choices rather than being too trendy.

Good Luck with the Remodel!
0 votes Thank Flag Link Tue Aug 31, 2010
Just spend whatever your comfortable with, however it can be hard to get back the money you put out for it when you decide to sell it, allthough a house that costs that much better boast one heck of a kitchen.
Web Reference: http://www.sjrates.com
0 votes Thank Flag Link Tue Aug 31, 2010
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