How much value does updating a kitchen or bath add to my home?
We are often asked how much a home's value will increase by remodeling a kitchen, remodeling a bath, adding a bath, or adding a pool. The value that will be added is very specific to your submarket, so there is no blanket answer.
If there are renovated homes in your community, an appraiser will compare the renovated home sales to any non-renovated home sales. By going through MLS photos and conducting agent interviews, appraisers try to determine the contributory value of your total renovation, upgrade and condition levels. In your community, pools may be worth $20,000 but, in another community, a pool might be worth $150,000. We have a wide variety of property value levels in Palm Beach County and each submarket has different market reaction to various amenities or improvements.
In one of our local Palm Beach County communities known as The Acreage there are many existing homes that have outbuildings including barns, garages, large metal buildings, etc. The cost to construct a building could far exceed the contributory value. The home also may not even be the largest market driver for the property (the building could have more contributory value than the house). As a general rule, the more you limit the number of likely potential buyers, the less competition a potential buyer will have, and thus they may get away with a lower purchase price. However, a home with a building that is absolutely perfect for certain buyers could also result in a high sale price if they “must have it”.
Most people also don't seem to consider that when you replace a kitchen, you are throwing out a kitchen that probably had some contributing value. Costs do not equal market reaction value. In this instance we are talking about the market reaction to the difference between a dated (but probably functional) kitchen, and the market appeal of a new kitchen.
Finally, we want to remind you that you will receive enjoyment of use for whatever improvement you are considering. There is a certain enjoyment that comes from being the only family to have used a new media room, or being the first person to cook in a brand new kitchen. At the end of the day, you need to weigh the enjoyment you will receive from the renovation and consider that in your decision making.