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What’s the Return on Investment on a Kitchen Remodel?

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One of the most popular home improvement projects is a kitchen remodel. Whether you’re looking to update the appliances, install new countertops, or add a backsplash, there are plenty of ways to give your kitchen a fresh look. Another advantage of remodeling your kitchen is that it can increase the value of your home. If you’re considering a kitchen remodel, home improvement loans can help you spread out the cost over time.

Why Should You Remodel Your Kitchen?

Your kitchen is the heart of your home. It’s where you and your family spend much of your time enjoying warm meals and creating memories all year long. Your kitchen can also be the one room that makes or breaks the deal if you decide to place your home on the market.

Whether you’re already in your forever home or have plans to sell, a kitchen remodel is the perfect opportunity to make it more functional and appealing to the eye with small improvement projects like repainting cabinet doors or replacing countertops and flooring.

What’s the ROI on a Kitchen Remodel?

Anyone who’s ever gone through a kitchen remodel knows that it’s not a cheap undertaking. But what many people don’t realize is that a kitchen remodel can also be a great investment. Not only will you enjoy cooking in a beautiful new space, but a well-done kitchen remodel can also add significant value to your home.

If you’re planning to finance your kitchen remodel with a home improvement loan, you’ll want to know what kind of return on investment you can expect. Unfortunately, there’s no easy answer, as the ROI on a kitchen remodel can vary greatly depending on the scope of the project, the quality of the materials used, and the market conditions in your area.

However, as a general rule of thumb, you can expect to see anywhere from a 50% to 80% return on your investment. According to the 2022 Cost vs. Value Report, a minor kitchen remodel costing $28,879 would have a resale value of $20,125, around 71.2% of the recouped costs.

How to Fund a Kitchen Remodel Project

Improving your kitchen doesn’t have to be overly expensive to achieve a good return on your investment, but that being said, even a minor renovation takes a bit more than pocket change to fund. A home improvement loan can be a cost-effective way to help spread the cost of home renovations.

Unlike other home-related financing products like a home equity loan or home equity line of credit, an unsecured home improvement loan won’t require you to put your house up as collateral. This means you don’t have to worry about being foreclosed on if you ever fall behind with repaying your loan.

With a fixed-rate home improvement loan, you’ll receive a lump sum of money that you’ll be responsible for paying back in affordable monthly payments spread out over a term that suits your budget.

The Bottom Line

For large home improvement projects, such as kitchen renovations, you want to ensure you get it right the first time, so giving yourself an adequate budget is key. Not only does it save you money on having to do any future work, but it can also make your home a more pleasant place to live and boost the profit you could make if you ever decide to sell.

A home improvement loan gives you an affordable way to borrow a lump sum of money, with set monthly repayments over a time frame that suits your financial situation. So, a kitchen remodel is worth considering if you’re planning to sell your home soon or just want to enjoy your new kitchen for years to come.

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