kitchen remodel quagmire

mikester · 03-17-2005, 07:52 AM

Really I just wanted to use the word quagmire.

No...seriously.

The wife and I are contemplating a kitchen remodel...well actually we're past contemplating. We bought the house with the intention of remodeling the kitchen.

We've met with four different contractors and gotten 4 estimates all around the same price. More than we want to spend but still likely not unreasonable.

We are concerned that if we spend all this money ~$30k that we don't know how it will effect the value of the house. Will it raise the value or will the value be based on property values in the area for a 3 br/2bath house? Since we purchased and since we're in LA where home prices are constantly rising we already have enough equity to pay for it and then some but if/when prices do settle and go down will we still be sitting on a house with a new kitchen and better value that we had before the remodel?

What's your experience with this?

As far as things bottoming out...well...I do believe it will happen but when I have no idea. For the bottom to drop in the LA housing market there would have to be a drop in demand or a marked increase in supply. Neither of those seem to be happening...despite all indicators.

knock on wood.

Thanks!

VaSteve · 03-17-2005, 08:30 AM

There are statistics that you get 100%* of your kitchen remodel back when you go to sell. I think doing the kitchen outweighed all other remodeling you could do in terms of return. Don't go overboard or too custom.

* Check my figures, might be slightly less. There are books at Home Depot that will go over some of these remodel figures.

Have fun!

Dantilla · 03-17-2005, 08:31 AM

None of us have a crystal ball.

It's your house. Make it yours. If the kitchen is more functional, the house will be worth more upon resale than with an old kitchen, no matter what the market does.

How long do you think you will live there? If you're looking for a quick flip, these are valid questions. If you're going to stay for the long haul, make the house enjoyable to you, and forget temporary market fluctuations.

Eric 951 · 03-17-2005, 08:39 AM

Mike,

30K for a kitchen?? How much remodeling are you talking about? You will see an increase, but I doubt you would ever see a value increase of that amount just from re-doing 1 room.
I am guessing that value includes all new appliances, countertops, sinks, cabinets, a tiled floor, tiled splashguard walls, and lighting?

The appliances are going to depreciate, so you will never realize full-value on those, other itmes are a matter of buyers' taste. A potential buyer would probably like new countertops, sinks, lighting--they may not like the particular style of cabinets chosen or the layout, however, when you go to sell unless it is really something unique or you are selling to a gourmet chef, a "remodeled kitchen" is a "remodeled kitchen" that is wether the countertops are granite or formica, the floor is tile or linoleoum, etc. and you would probably see the same dollar value increase in the home itself regardless of the $$$ spent on the remodeling, so long as the kitchen was remodeled.

I hope that makes sense

Moneyguy1 · 03-17-2005, 08:49 AM

For 30k, you could build a good sized bumpout!!

I redid the kitchen (built my own cabinets...oak) so the price was far less but came to about 5k for everything including counter tops.

Wife is happy, I'm happy. She used to cook professionally so she did the rough design. However, in all fairness, her design might not appeal to someone else.

While it is true that kitchen remodeling has one of the best possibilities of return, a 30k investment may place your home above others in the neighborhood. Of course, with the "hot" market, that may be OK.

mikester · 03-17-2005, 08:51 AM

The remodel includes new custom made cabinets; tiled floors, splash back, sink/basin, stainless steel exhaust hood, new lighting, new granite countertops, a new oven and stove but not a new dish washer and fridge (the ones we have are new) as well as the possiblility of knocking out a wall. We have an increase in counter space by 2x or more and an increase in cabinet space by 2x or more if we knock out that wall. Our kitchen would be much nicer in the end of course and we do plan on the long haul of at least 10 years in this house; More if things go well enough in it. We bought big to get a long time out of it.

tabs · 03-17-2005, 09:07 AM

30K ain't nothin for a Kitchen Remodel.....and that is one of the few places in a home where yu do get yer money back..that and adding bathrooms....If the remodel significantly improves the openness of the home and it's desirability go for it...

One thing I would check with SEMI CUSTOM cabinets rather than Custom Cabinets....Home Depot and Lowes have some nice things...also there is a Show room in LA? that has everything you could desire in Cabinetery...on a semi production basis....This is where you could significantly cut costs....

Everything is based upon $$$$$ per sq ft......if you exceed the going rate of $$$ per sq ft in your area you have over improved your home for the area it is in...Check with a RE Agent to get an idea of what your home is worth now and would be worth with a new kitchen...and compare it with similar properties in your area...

BTW: Pools and Spa your lucky to get $0.50 on the $$$ back...they are the worst investment in a house you can make...and above ground spas = NO VALUE to the home...as they can be hauled away...

Here in my development in LV I can add 25K to the value of my home for a pool....I can build a nice but not elabrate pool for that kind of money by subing out the work myself...

pbs911 · pbs911's Garage

I don't know what you are replacing or how big the kitchen is, but $30k is in the ball park.

I spent $11k on new top end cabinets that I intended to install myself, about $500 for travertine for the floor, and another $6k for mid to upper end appliances (not including the fridge.) Now with divorce, I have alot of expensive materials just sitting there.

We remodeled the kitchen in our last house, but spent probably $15 on the kitchen with me doing the work. Mid range cabinets, stove/oven combo and a stove vent/microwave combo. That was the main improvement. While the highest sales of the same floor plan topped out at $550k, we were able to get $589k. The kitchen made a big difference according to the buyer. The question is, do you want to live with a new kitchen or are you satisfied with the old? I have heardthat people spend up to 25% of their waking hours in the kitchen, so it is worth it to me.

Eric 951 · 03-17-2005, 09:12 AM

Quote:

Originally posted by tabs
30K ain't nothin for a Kitchen Remodel.....

I keep forgetting this is in LA, although seeing as I just bought a 5 BR fixer-upper house for 22K, I am still having some sticker-shock for a 30K re-modeling, of 1 room

Moses · 03-17-2005, 09:18 AM

If you are using good materials and top appliances, 30K is very reasonable. I acted as the general on my kitchen remodel and hired all the subs myself, I was very careful about cost. Final tally? 35K.

928ram · 03-17-2005, 09:27 AM

Of course if you remodel today and stay in the home 10yrs, your remodel will be outdated except for the increase in size, which never goes out of style. Do it for yourselves, enjoy your home.

RickM · RickM's Garage

I'm in the middle of planning a kitchen as well.

IMO

$30k does not get you top of the line appliances in a remodel. A 48" Wolf, Viking or DSC stove/oven combo will hit you for around $10k at most places. (Luckily I can get at cost but still in the $7-$8k range) More if you do a high end stove top and separate wall ovens. Forget about the prices of a high end fridge.....the prices are sick.
While on a spreadsheet these high end appliances may depreciate they hold their value very well at resale time.

A kitchen is one of the better selling points of a house....as mentioned. Tabs nailed it best. A couple of years ago a sunroom gave best returns followed by bathroom and then kitchen.

Z-man · Z-man's Garage

$30k is reasonable for a close to upper end kitchen remodel, IMHO. Mrs. Z-man has been bugging me to redo ours for a couple of years now, and we're looking at around $20k for a middle-of-the-line remodel.

A kitchen remodel is a worthwhile investment in your home. Second best is a bathroo redo. Do both, and when you sell your house, you will get back what you put into the remodel, or more.

-Z.

RickM · RickM's Garage

Here's an article on ROI:
http://www.bankrate.com/brm/news/loan/20000425.asp

island911 · 03-17-2005, 09:54 AM

Quote:

Originally posted by VaSteve
There are statistics that you get 100%* of your kitchen remodel back when you go to sell.

I'm thinking here; 'what!? . .. stat's developed by a Home depot funded study?'

I go on to read;

Quote:

"There are books at Home Depot that will go over some of these remodel figures."[

too funny!

Anyway, as others have said, be smart about what's appropriate for your circumstances. Kitchens are the most feature-dense rooms in a dwelling. (read; big complex project when plumbing, electrical, ventalation, gaslines. . . get rerouted) Also, kitchens get worn with time (even w/ granite) and styles change constantly.

So, IMO, remodeling a kitchen for some idea of 'resale investment' is just a Home Depot type of marketing push.

RickM · RickM's Garage

Note "Minor" kitchen remodel

Where We Get The Data
Cost data for the Report come from Home-Tech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors, and its cost figures include a 40% margin. Costs are adjusted to account for city-to-city pricing variations.

Resale values do not reflect actual sales made on remodeling projects. Instead, they are based on the professional judgment of members of the National Association of Realtors (NAR) about each remodeling project's anticipated resale value. E-mail surveys containing cost and median home price data for each city were sent to more than 20,000 appraisers, sales agents, and brokers, generating 356 responses (a 1.78% response rate). According to The Farnsworth Group, the data accuracy rate is +/- 5% to 10%.

1973911s · 03-17-2005, 10:08 AM

We spent almost 80K, but we moved walls, and doors.

BEFORE

AFTER

We used a real hardwoood floor, but I don't have a picture of it.

It is worth the money, and you get a lot of BANG factor when you go to sell the house.

Michael

island911 · 03-17-2005, 10:11 AM

Yeah Rick, me thinks they control . . .cherry-pick just which houses have such great ROI from remod's. It makes for an easy argument . .. wives love it. . .whip out the numbers . .the numbers can't be rong.(sic)

The thing is, many (most?) times people will take a perfecly functional kitchen and dump big money in to a remod' under the false pretense that it's "an investment" . . .'cuz the remodeling contractors union (or Home Depot) says it is.

JonT · 03-17-2005, 10:11 AM

I've read 15% of the value of your home as a rule of thumb. Anything over and you're looking at not getting a 1 for 1 return on money.

Don Ro · 03-17-2005, 10:48 AM

To have a good working kitchen is a pleasure. (Gas ranges rule!) I see putting ~$30k into your kitchen as a good thing...especially if you're staying there.
.
'Putting my place up for sale soon. Original kitchen (1948) with metal cabinets and drawers below sink/counter area. Raunchy linoleum, old appliances, etc. 'Looks like hell, but I lived here alone for 20+ years and it's been OK for me. Real estate agent says a plain and neutral upgrade will yield twice what I put into it...~$10k and about two weeks of inconvenience. She said, for the most part, women do the deciding when it comes to home buying. Another agent - not signed w/any agent yet - said some buyers would rather have a price discount and do their own upgrade to suit their desires. Same with bathroom upgrades, she said. What do I know? I like the second idea better, but I want the highest sale price, obviously. Setting up a house/property for sale is a PITA, I'm finding out.