Advantage: IKEA kitchen over custom?
One worth considering, especially in a soft housing market.
It gets pummeled into our brains daily now: HOUSING MARKET IN THE CRAPPER! Yes. Yes it is. I thought it worth a post, especially highlighting Kelly’s excellent summary on the IKEAFANS site.
Basically, the two ways for your home to increase in value, is with time, and/or with improvements. To maximize your return, you can either DIY on that custom kitchen. That’s great if you have time. And the skills. If you don’t, you can still maximize by going with IKEA:
My IKEA kitchen reduced the cost of my renovation by half, with some labor hired out. If you poll the people on this site, you’d find similar numbers.
In this example, I’ll still use the midlevel kitchen remodel which looks like others costing $20k, and which you can expect a resale value of $16k out of. Remember this is how real estate valuation works- comparables, not actual cost. I’m still assuming that the materials make up $16k of the $20k expense as in the original example.
But, with IKEA, this kitchen will cost you $8k, or 50% less than the $16k of materials in the first example. Remember, there is $4k on the table for labor which you can retain by doing it yourself (the work is the same regardless of what kitchen you choose). So, if you hire someone to do your IKEA kitchen, you will pay $12k ($8k materials + $4k labor=$12k). Remember, the $16k resale value is for kitchens that look like those which cost $20k. In this example, an IKEA kitchen installed by a professional nets you a margin of $4k.
Let’s go over that again: Build in a profit margin of $4k (IKEA with an installer) OR build in an upfront loss of $4k (other cabinets with an installer).
Win, win
Another bonus: you get to enjoy the improvement while you wait out the market recovery. And you may even decide to stay put, further saving the cost of moving.
