The kitchen was just plain ugly, with its lime green walls, broken floor tiles, cabinets that had been painted over twenty times in different colors and still looked greasy, and a 1970s electric stove in a distinctive shade of burnt orange. Despite the fact that the last round of decorating was done about 45 years prior, I bought the house anyway. During the rehab, I primarily focused on all of the safety aspects that were required to bring the house up to code. But I didn’t touch the kitchen. I mean, as a single man, I don’t use the kitchen very often. I didn’t take the time to imagine how important that room might be to others. In retrospect, I realize that this logic was flawed. Much to my chagrin, I later learned that the kitchen is often cited as the single most important room when it comes to the sale of a house. That explains why it took so long to sell that property!
Ugly kitchens can be a huge turnoff to buyers. In fact, real estate agents like to say that you get the best return on investment by remodeling the kitchen first. That’s why, when it comes to your investment property, kitchen renovations are extremely important. Figuring out what actually needs to be done to bring the property up to its full market value can be time-consuming, but the devil is in the details. After all, you want to make sure that the house is worth investing in from the start. But you need the right tools at your disposal.
Estimating Costs for the Best ROI in Your Investment Property Kitchen Renovation
Of course, the first thing you want to think about when renovating a kitchen in your investment property is your primary objective. As an investor, your aim should be that to spend just enough money to make more money when the house sells. There’s a fine line between doing what’s needed to achieve market value and doing too much. You’ll need to understand the precise costs of the kitchen rehab before going into the project and it’s critical that you stick to your budget. Otherwise, it’ll be nearly impossible to meet your objective. Let’s take a look at some of the most common renovations that you may need to perform in kitchens of older homes and the ballpark prices for those upgrades.
Newer appliances are an eye-catcher for home buyers. Remember, you may be able to offset some costs here by applying for rebate programs through the local utility company! Sometimes when you install new appliances, the plumbing needs to be relocated or upgraded. Be sure to factor in the additional cost of labor if you do not know how to install these items yourself or need help from a plumber to relocate piping.
- Refrigerator: $400-$3,000
- Garbage disposal: $70-$200
- Stove: $500-$1,500
- Range Hood: $80-$1,100
- Dishwasher: $400-$1,000
- Over-the-range microwave: $150-$600
Updated lighting can change the whole character of an old house, making it warm and inviting for buyers who are seeking their next home. You can use points of light to illuminate dark hallways or brighten rooms. Directional lamps, or wall washers, can bring out the unique structural details in an older home. You may even consider adding outdoor lighting. Up-lighting in particular is extremely effective. While some outdoor lights require help from an electrician, another option is solar-powered lights which charge during the day and illuminate at night. The cost for outdoor lights will vary dramatically depending upon the style and extent of lighting that you choose.
- Light fixtures: $40-$500+
- Under cabinet lighting: $10-$150
- Outdoor lighting fixtures/wiring: $100-$500+
- Pathway lights: $50-$250
Updated appliances and new lighting fixtures may require you to do some rewiring or you may need to incorporate additional wiring. For instance, 200 amp panels are necessary to run most of today’s air conditioners, computer equipment, and high-tech home automation devices. In addition, most older homes do not have a sufficient number of electrical outlets to support the average modern tech-centered lifestyle. It’s important to hire a licensed contractor to perform all electrical work to ensure that everything is up to code. As such, these estimates include both material and labor.
- Electrical panel: $800-$2,000
- Electrical outlets: $125-$270
- Light switches: $75-$100
Ask anyone who spends a good amount of time cooking for their family in the kitchen and they’ll tell you that it’s critical that you’re able to access everything you need, precisely when you need it. Unfortunately, the cabinetry in older homes tends to be not only ugly, but also awfully inconvenient. While stock cabinetry is the most affordable, your choice will depend, in part, on the dimensions of the space you are working with. Some older homes have kitchens that are a little quirky and don’t fit today’s standard sizes.
- Stock cabinetry: $75-$400 per linear foot
- Semi-custom cabinetry: $150-$900 per linear foot
- Custom Cabinetry: $500-$1,400 per linear foot
Granite and marble may be all the rage, but there are lots of other options that are easy on the eye and far more affordable. Consider the local trends and preferences in your area when making a selection. This will help you to attract your target buyer when it’s time to sell your investment property.
- Granite: $50-$250 per square foot
- Solid surfaces: $35 per square foot
- Butcher block: $30 per square foot
- Tile: $10 per square foot
Sink and faucets.
Design preferences aside, Consumer Reports tells us that what the sink is made of matters more than the brand name. There’s a variety of materials and styles to choose from, so select something that coordinates with the overall kitchen aesthetic.
- Drop-in sinks: $100-$500
- Undermount sinks: $200-$1,000
- Farmhouse sinks: $900-$3,700
You may choose to paint the kitchen yourself or hire a local painting contractor. If you do it yourself, two gallons of quality paint should cover up to 800 square feet. Don’t forget to add in the cost of paint for the trim and supplies such as brushes, rollers, and buckets. Of course, a contractor will come prepared with all that, but you will still have to buy the paint.
- Gallon of paint: $40-$50
- Contractor: $380-$790 per room
For the kitchen, you are going to want to install some kind of hard flooring. Thankfully, you’ll have many choices at a wide range of price points.
- Laminate: $0.65-$2.00 per square foot
- Vinyl: $2.00-$3.00 per square foot
- Tile: $2.00-$4.00 per square foot
- Solid wood: $3.50-$8.50 per square foot
The Most Efficient Way to Estimate Costs for a Maximum ROI
When faced with a kitchen remodeling project, there are many details to consider. You want to end up with a nice room that will attract buyers’ attention, but you don’t want to overspend. Kitchen renovations can cost as little as $4,300 and as much as $50,000, with the average price landing around $21,714, according to HomeAdvisor. But, you are going to need more information in order to determine if the house is worth your investment in the first place.
HomeVestors® franchisees have access to the proprietary ValueChek™ software which can quickly and easily estimate the cost of necessary renovations and compare that to the potential market value when finished. That way, investors can more confidently purchase a house knowing that they can achieve a solid return on investment. If you would like to build more certainty into your real estate investment business, get in touch with HomeVestors® today.
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