Q: I am contemplating remodeling my kitchen and was thinking of perhaps including the formal dining room space by opening a wall between the kitchen and dining room. Have you done any research or know of any completed on the significance of doing away with formal dining rooms and its effect on resale value?
I know that a lot of newer homes are being built without formal living rooms, as these are not being used as a part of the new family/social dynamics.
A: I think you’re smart to consider the issue of resale value as you embark on a home remodeling journey, especially one that might impact the floor plan in the way your envisioned kitchen open-up will.
Remodeling ROI is tough to prove
In terms of the data, studies shows that there aren’t many remodeling projects that truly create major return on investment (ROI) for homeowners, in terms of actually generating a "profit," so to speak. That said, it’s tough to account for the value of some home upgrades.
For instance, if your kitchen is very out of date and the nearby homes have new kitchens, your home might sell at a discount — or not at all — compared to neighboring listings unless you have remodeled it prior to listing it for sale.
Further, the kitchen and bathroom remodels that buyers love can be pricey to pull off, also making it difficult to show a financial upside to them in hard numbers. I can tell you from my experience that losing a formal dining room, if done in trade for an upgraded, open kitchen with an island and space for a large, holiday dinner-style table, does not have the same impact of depreciating a home that, say, knocking down a wall between two small bedrooms might have.
Talk to your agent about what local buyers prefer
Just because you can’t prove that you’ll make your money back and make some on top of that doesn’t mean a remodeling project won’t make your home more attractive to buyers when the time comes to sell it. Truth is, opening up a kitchen wall to make a wide-open, eat-in-kitchen-dining-room combo is one of the most frequent changes house hunters say they’d like to make to the homes they are viewing!
But buyers are different everywhere — if I were you, I’d shoot an email over to the broker or agent who sold me the place, and chat with him for a few minutes about what he thinks buyers in your neck of the woods would prefer, by and large: a formal dining room or an open, eat-in kitchen. If you’re thinking about any other options, like upgrading the kitchen, but keeping the wall in place, run that past him, too.
Financial impacts are only one piece of the story
All that said, there’s one major consideration you should factor into your remodeling decision-making that neither looking at the data on remodeling ROI nor talking to your agent can capture: the use and enjoyment you and your family will get out of the opened-up kitchen in the years before you sell the place.
When I sold my first home, I put off doing a much-needed kitchen remodel the entire time I lived in the home; only after I’d already moved out and was preparing to put the place on the market did I have the whole kitchen gutted and upgraded.
And the moment I saw the finished product, I kicked myself for not having done it sooner — so we could have enjoyed it!
Your home is your largest financial asset, but it is not purely an asset — it’s primarily the place where you live and conduct the most intimate moments of your family’s life. If you’re planning to be in the home for a number of years and opening the kitchen wall is going to make you and your family happier and you can afford it, go for it — even if the numbers suggest otherwise. (And if you’re not planning to be in the home long, I’d advise against expecting to recoup all that you’ve invested in a kitchen remodel when you resell. Rather, you might just want to do a basic upgrade instead of a full remodel if you don’t plan to be in the home for long.)
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
|Contact Tara-Nicholle Nelson:|
|Letter to the Editor|