| Kitchens have the biggest impact on the sale price of any
room in the house. Kitchens that sparkle provide an immediate draw for
buyers; kitchens that are old and tired do more to dissuade would-be
buyers than anything else.
This is why, when looking for investment properties, it makes sense
to look for properties with tired and unappealing kitchens [the first
two investment properties I purchased had no kitchens at all! {ed}]. As
always, be sure your offer price takes into account the cost of
replacing the kitchen. (Remember, your offer price is not based on the
asking price, but upon the projected value of the property when your
improvements have been completed minus the costs, including profits, to
improve the property; see also Raising the Money).
Kitchen remodeling can be a costly project, especially in larger
homes in the upper end of the price market, where only the very best
appliances, work surfaces and cabinets are acceptable to most buyers. As
an investor, it is important to understand how much money you will need
to put into the kitchen remodel project. Keep in mind that upgrading a
kitchen for resale is very different from upgrading a kitchen in your
own home. Where you might select appliances and fittings for comfort and
personal taste in your own home, in a remodel the goal is to have it
look as expensive as possible without it actually costing that much.
When remodeling, consider following these tried and tested tips:
Lighting
Add as much lighting as possible, especially over counter space;
lighting is relatively inexpensive and a well-lit kitchen is more
inviting, warmer and sells better. Use warm lighting (not fluorescent).
If the kitchen is big enough, create pools of warm light using a mixture
of flood and spot lighting. (Tip: Always have all lights on when
selling; brightly lit rooms appear bigger even in daylight).
Flooring
The floor is often the first thing a buyer will see when entering the
room. The more luxurious the floor, the more appeal the room will have.
New vinyl/linoleum is the minimum you can typically get away with; a
more modern tiled flooring or polished hardwood flooring will have more
appeal and leave a stronger impression of value in the mind of the
buyer.
Appliances
If the appliances are old they should definitely be replaced with new.
Buy the basic model of the appliances but upgrade the finish to match
the kitchen and fashion trends (e.g. stainless steel has been very
popular in recent years). The key here is leaving a visual impression of
luxury; you are less concerned with functionality than you are with
creating the impression in the buyer's mind that this kitchen must have
been expensive to install, therefore if they can buy the house they are
getting great value. If you are remodeling an up-market home, consider a
counter-top professional range and a wall-mounted eye-level oven. These
have been popular in Europe for many years and are becoming increasingly
sought-after in America. (If you want to add that extra sales touch, and
have the space, plumb in two dishwashers; these are relatively
inexpensive and the extra capacity is great for entertaining and for a
family there is never a reason to have dishes stacked in the sink - all
great selling points).
Cabinets
Cabinets are typically the biggest budget item in the kitchen project.
Pre-assembled cabinets save time but they are much more expensive that
those assembled on-site. Assembling on-site is relatively easy to do for
anyone that is remotely handy with a screwdriver and a drill. Even if
you have to have the kitchen installed by professionals (and many people
do), being judicious in your choice of cabinetry can save thousands.
Sticking to the basic doors without any of the fancy trim (unless the
home price demands it) can save 20% - 30% on the budget. Avoid the
interior upgrades such as revolving and sliding shelves; very few buyers
open the cabinets and those that do won't be put off if they are not
there. If you have space for one, add a walk-in pantry; it's a popular
item and it reduces the need for masses of cabinet space. Remember,
visual impact is key; create the illusion of luxury without spending a
fortune and you'll be a more successful investor.
Counter Tops
Perhaps the most important area to spend money in the kitchen is on the
work surfaces. Given the visual impact a gleaming stone counter has on a
buyer, new work surfaces go most of the way toward creating a feeling of
luxury. Get the best surfaces your budget will allow; a polished granite
counter in a well-lit room can turn even a tired old kitchen into a
thing of beauty. A polished stone or stone equivalent surface attracts
the eye and takes it away from other aspects of the room that may be
less than perfect. Given today's variety of work surfaces, you should be
able to find a granite-like counter top for a reasonable price (there
are many new quartz composites and similar coming onto the market that
look and feel like stone at a lower price-point).
Backsplash
The area behind the counter often goes unnoticed by the buyer when it is
left plain. Making this area an attractive feature using modern tile has
a visual impact disproportionate to the cost. Relatively inexpensive to
do, upgrading the backsplash using tile can transform the feel of any
counter area.
The Kitchen Sink
Install a new sink unless the existing one looks new. Stainless steel
sinks become scratched and dull over time. Unless the faucet is new,
install a new one. Spend a few extra bucks and select a set that looks
expensive.
Summary
Think visually; how a kitchen looks and feels makes your investment easy
or difficult to sell; part of the cost of sales is the cost of not
selling your investment quickly. |
