Are kitchen cabinets a good investment?
According to a 2022 research report by the Housing and Community Development department in Loudon County, Virginia, homeowners should take confidence in a 90% return on any investments made into home renovations if the home is sold within 3 years of the update. This 90% is an average based on the entire home, from patio repairs and new bathroom vanities, to floor installs and cabinet redesigns. Many reasons why homeowners should not expect a full return on investment (ROI) is based on the market value of the materials. For example, if a customer was persuaded to purchase a specific style of laminate cabinets that are incredibly popular, the product will most likely be overpriced due to demand. This renovation would increase the likelihood to sell as the National Association of Realtors reported in 2022 that ⅓ of buyers who purchased in 2021 decided to do so based on an already updated home, “looking to avoid renovations and problems.”
Kitchen cabinets are a great investment before selling because the time and cost can be intimidating to new homebuyers. Having the work already completed makes the property desirable to purchase. A typical kitchen cabinet renovation can take up to 3-5 months depending on material availability and a laborer’s work schedule. This can be daunting for homeowners who are wanting to sell quickly. There are alternative methods like cabinet refinishing or installing new cabinet doors that can cut the time frame down from months to a single week.
What is a good budget for kitchen cabinets?
The extent of the budget is dependent on what upgrades are sought for at the time of selling. For certain, whether the homeowner rips out and purchases new cabinets, or refinishes existing cabinets, they can expect a 90% return of investment. Any additional profit to that budget is based on creative decisions on how to approach investing into their kitchen cabinets. For example, refinishing existing kitchen cabinets to a popular color is ⅓ the cost of purchasing and installing new cabinets. The 90% ROI data is based on the assumption that the homeowner purchased new cabinets. As of this article, the general price range for a 10×10 MDF white kitchen cabinet design purchased at Big Box Home Improvements Stores is currently $15,000-$19,000 (White cabinets are most desired by potential homebuyers). When the homeowner sells the home, they should expect about $13,500-$17,100 in return. However, if the homeowner decides to refinish and improve the existing cabinets for ⅓ that cost ($5,100 – $6,460) the ROI has now increased since they paid less for the same end goal. They can expect a 165% ROI, profiting approximately $8,400-$11,286 when the home sells.
It is obvious then that this is no longer a budget concern but a profitability strategy. If guaranteed a 90% ROI in whatever form of kitchen cabinet renovation, it only makes sense to pursue the service that is less cost effective yet yields the greatest profit margin. This is the benefit of kitchen cabinet refinishing.
Why do kitchen cabinets cost so much?
Kitchen cabinets are expensive because of labor and material costs. Technicians require weeks for demolition, electrical, and installation. That service alone is expensive since it takes time and risks accidents and repairs. Kitchen cabinets themselves are expensive because they are highly coveted by both homeowners and potential homebuyers. Big Box Home Improvement stores have not only kept the service high-valued, but have lowered the standards of the quality in craftsmanship. The solid wood cabinets that sold up to the early 2010’s, have now been replaced by MDF built cabinets, or even laminate. This allows these companies to make profit since they now have less production costs and can sell it for the same amount. Laminate and MDF are poor quality, risking peeling, chipping, and scarring due to normal wear and tear. There is little one can do to repair these faults since they are not real wood. Despite this, kitchen cabinets are currently being sold for $15,000-$19,000 for a 10×10 kitchen design.
Is it worth it to update kitchen before selling?
Since there is a 90% ROI and ⅓ increase in potential buyers, it is advisable to renovate the kitchen before selling. There are options available to cut down costs and time, and even opportunities to increase the return of investment. The 2022 Remodeling Impact Report by the National Association of Realtors concluded an average of 147% ROI for refinishing kitchen cabinets, hardwood floors, and even front doors. Homeowners can take confidence in any investment they make to the kitchen before selling.