Is renovating the kitchen worth it when selling your home?
BY SHANNON MONEO | IMAGES FROM: SPARTAN MEDIA GROUP
Remember when, about a dozen years ago, black granite counters and dark maple cabinets were the crème de la crème in kitchens? Today, white remains right, along with other muted choices. So bringing a kitchen from 2010 to 2023, prior to putting a home on the market, may be foremost in sellers’ minds — and for good reason.
According to the Appraisal Institute of Canada, a kitchen renovation provides the highest return of all renos, marking this change as one of the biggest incentives for eager sellers. How does that measure up? Typically, kitchen renos earn about an 80 per cent return on investment. So, if $40,000 was spent, about $32,000 becomes added value to the home, making this task top of the to-do list when a home sale is on the horizon.
Of course, not all renos are created equal. A small and modest kitchen redo can start at $8,000 and soar to over $80,000 for the grand vision. To maximize the impact, knowledge of what’s popular, and whether it’s even worth the work, needs to be determined. With house prices in the lower Island region already soaring, overhauling the kitchen can be a gamble or a windfall in today’s unsettled market.
Unpredictable ingredients
Before you crack out the jackhammer, know that not everyone is sold on the reno recipe. Graden Sol, chair of the Victoria Real Estate Board, says his common advice to clients is to forgo a kitchen facelift or, if they do one, make it a modest renovation, which can raise the ROI to about 90 per cent from 80.
“You can do a kitchen renovation that isn’t what a potential buyer wants,” warns Sol, also a Realtor with Royal LePage.
He’s dealt with instances where sellers go whole hog and drop upwards of $70,000 on a kitchen renovation, but when they come to sell, the price received doesn’t exceed what was spent. Compensation for the hassle, stress and waiting isn’t there. He’s also seen new homeowners rip out the kitchen in the home and immediately start over.
“You’re dealing with months of installation and disruption, and you may not get your money back,” Sol says.
What lurks behind those walls could also be a game changer. Sol knows of some homeowners, intent on a big kitchen redo, who ripped out the drywall only to find bigger problems — pests, electrical or insulation issues — or else made mistakes along the way. Costs can rapidly escalate when professionals have to be called in for repairs.
The market also plays an overarching role, Sol says. Recently, homes in the $800,000 to $1.5-million range have been in high demand.
“If the market is tight like it is now, getting the home on the market is better than renovating,” Sol says.
He reminds sellers that when would-be buyers are looking at homes, what they’re interested in is a clean space, in good working condition. A serviceable kitchen is fine. Remember, too, that some buyers will purchase a home with the entire intent to undertake their own renovations, which can often include the kitchen. Sol does make one important caveat. A 1950s house, duly renovated except for the kitchen, is unappetizing.
If a renovation is going ahead, he recommends buying products that can be delivered soon. In the age of backorders, Sol urges people updating appliances to avoid waiting on fancy items and, instead, order what’s in stock. The elaborate stove, fridge or dishwasher may take months to arrive and leave a seller biting their nails waiting to fill a hole in the wall. And, since kitchen renovations are usually subjective, Sol says start fresh and simple, don’t spend excess money and get items fixed rather than replaced.
A feast for sore eyes
Another Realtor, whose own home renovation included about $35,000 worth of kitchen revamps, has a different view.
Amit Dillon, with eXp Realty, has been buying and selling homes since 2016. In early 2019, he and his wife, Kiran, bought an Oak Bay split-level home for about $940,000, which they sold in October 2021 for just over $1.8 million. They spent about $300,000 upgrading the property, which yielded a return of about $600,000.
“If you’re looking at creating value, the kitchen is probably the number-one area,”
Dillon says, noting that when the couple sold the home, the kitchen was the primary reason the buyer bit. “She loved the kitchen.”
What started with linoleum floors, maple cupboards and Formica countertops was transformed into a gleaming, white-on-white, tiled-floor kitchen with quartz countertops.
White was chosen to maximize the space in the reconfigured open concept; a window was enlarged for more light and specialized appliances were installed (a 36-inch, not 32-inch cooktop, a wall oven/microwave combo and a hot-water tap right above the cooktop). Small features, like the tap, carry a minimal cost but deliver an outsized impact, Dillon notes.
Initiating a full kitchen renovation should begin with knowledge of the desired layout and where everything will be placed. Recruiting expert designers to ensure all the boxes are checked can be an asset here. Having the correct space (height, width, depth) for appliances is crucial. Next is to meet with the cabinet supplier/maker to co-ordinate placement of the appliances and countertops. Then, start placing orders.
“Get going on that right away, because it takes longer,” Dillon says.
A demolition crew will be needed to rip out existing items. Tile-setters, plumbers and electricians are required for installations and to ensure power and water sources can meet new demand.
Even with the base requirements, Dillon has simple advice. “Splurge where you need to,” he says.
A lot of kitchens he sees require updating, or have only been halfway revised with new appliances. The old countertops and cabinets cry out for a do-over. As a big believer in the pleasure and value brought by an updated kitchen, Dillon says the end result is also meant to be enjoyed.
Like anything related to home sales these days, while black and white both remain popular colour choices, the answers may never be so clear. “A kitchen renovation,” Sol says, “is not a simple yes or no.”
