Your home is a financial investment that pays off in the future when you decide to sell. Yet every house will eventually begin to lose at least some value as the materials begin to age. Planning a remodel is a great way to restore or elevate your home’s value over time, and this can impact the equity. Delving into how much a kitchen remodel can improve your home’s equity gives you insight into how to plan a budget and make the right kinds of changes for your upcoming home improvement project.
Understand How Home Equity Works
Home equity is essentially the percentage of the home you already own. For instance, if you put a 20 percent down payment on your home when you bought it, you already have immediate equity. You’ll also gain equity as you make regular payments on your home. To find out how much equity you have in your home, simply subtract what you still owe on your mortgage from the current market value.
As your home gains value from general changes in the residential marketplace and the updates you make, you’ll also see your equity increase. You’ll also want to note that you can use your home’s equity to secure a line of credit, which is what some homeowners do when they’re ready to make major renovations. However, you also have the option of planning a remodel using your established savings or other methods to begin building equity faster.
Consider the Value a Kitchen Remodel Adds
The average kitchen remodel can bring an ROI of around 50 to 70 percent of the amount you spend on the updates. With this in mind, you can get an estimated figure of how much you can expect to see added to your home’s market value following the remodeling project. To get the highest ROI, you’ll also want to consider the current value of your home. Keeping the budget for the kitchen remodel within a reasonable range for the value of your home simply makes sense when you hope to increase the equity without overspending.
Plan the Right Level of Remodel for Your Home’s Value
A home’s value is influenced by multiple factors. While the condition of your home and its features have the most impact on buyers, it’s also important to consider the general age of the building, the value of neighboring homes, and what people who buy houses in your area generally spend.
A Rancho Sante Fe kitchen remodeling contractor can guide you to the right types of materials and changes to make during your project to help you get the most out of your investment. For instance, it might not make sense to put professional-grade appliances in a residential home. But installing new mid- to high-grade countertops could make a big difference in your home’s value compared to keeping your old, outdated ones.
As you plan the remodel, you’ll also want to discuss your preferences. If you love the idea of accent lights or have always dreamed of having ample storage space, make sure to mention this to your contractor. After all, the elements you find appealing boost your personal satisfaction and contribute to the overall value of your home.
The Forever Builders team will guide you through every step of your kitchen remodel. Rancho Santa Fe homeowners can trust our experienced professionals to make sure their kitchen remodels go as smoothly as possible. From initial design to final completion, we’ll help you create the beautiful kitchen you’ve always wanted while keeping your costs within budget. To find out more about our exceptional remodeling services, give one of our friendly team members a call today.