Spending thousands of dollars on a backyard addition is way easier while treated as an investment. It is nice to have an additional party spot and a fancy cooking space, but how much does an outdoor kitchen add to home value?
According to a report by the National Association of Realtors® an outdoor kitchen on average adds to home value 71% of the investment. In states, where it can be used year-round, ROI can go up to 130%. Such addition is most helpful when the house goes to the market in the spring.
There are multiple rules on how to build an outdoor kitchen so it actually adds value to the property, as plenty of them don’t. When an outdoor kitchen can really be an investment? What appliances to look for, and which omit? What buyers are looking for? 2 case studies are at the very end.
How much does an outdoor kitchen add to home value?
There are plenty of types of outdoor kitchens, as there are plenty of types of neighborhoods and houses. In some of them, an outdoor kitchen is a nice-to-have addition, in others a must rather. There are plenty of factors to take into consideration.
The attraction that an outdoor kitchen brings grows in last years and COVID in 2020 made it pick, as it made home dining and entertaining grow. Even in 2018, it was clear that outdoor kitchens are much wanted by buyers. National Association of Landscape Professionals and the National Association of Realtors® made a research on how outdoor features affect the selling price. This is research that gives a nationwide average, so a good starting point.
What researchers were looking for are average prices customers paid for specific features, and return they get on it on average. Landscapers gave cost estimates, realtors cost recovered from the sale. The average price of an outdoor kitchen was $14,000 (inset grill, stainless steel drawers, ice chest, sink, 60 sq ft of concrete countertop, made from veneered masonry stone), estimated cost recovered from the sale of the property was $10,000 (so 71%).
Even though average prices can give a somewhat orientation in the subject, in case of outdoor kitchens they’re not showing what are the factors that influence cost recovery /making money on the investment. In 2020 the American Institute of Architects published a Home Design Trend Survey Kitchen and Bath.
And there is plenty to read from this survey. First of all, as a trend outdoor kitchens will keep growing, as an outdoor kitchen is a top kitchen feature for the house (nearly 50% said so!). It goes even prior to the open floor plan, which is huge! In other words, buyers are going to be looking more and more for outdoor kitchens, as new builds do have them in.
And while we’re at kitchens – if the one already owned works well and looks good enough, upgrading it is not going to raise a property worth a lot and is going to cost a fortune (very often $40k). An outdoor kitchen, on the other hand, as a kitchen feature, is something that did not exist before and is visible at first sight, as it makes backyard way more entertaining.
So how come they’re so popular, but data shows they’re not an investment? Well, they can be, but have to be designed according to not only owners’ taste, but also market demand. This means research has to be done.
How to figure if an outdoor kitchen will add value to home?
The easiest and fastest way is to get a consultation with a local real estate agent. Why it can be a crucial thing to do? First of all, this is a person who has no personal attachment to your house, so the agent is going to view it from a business perspective. Second of all, to figure what is worth adding to the backyard moneywise depends vastly on the research, that realtors are making each day.
The factors to take into consideration while planning to add an outdoor kitchen:
- What neighbors have in their backyards?
- What are the most-wanted features by buyers in your neighborhood?
- What is the average sale price of a property in your neighborhood?
- What is your house value at the moment?
- Can your house price increase according to sales in your neighborhood?
Such consultation may cost a few hundred bucks, but it can save a lot of money and effort later on. A realtor may not only tell you if you should go with the project but also give you tips on size, finishes, and budget. This process leads to building an addition, which is going to be fun, but not crazy-over-the-top.
All of the mentioned above queries can be researched by a homeowner, but it is going to take a lot of time. As selling prices of the houses in the neighborhood are usually well known, figuring what exactly can increase a specific property value may be a tough piece to figure. It is possible though.
Outdoor kitchen resale value & budget
Building an outdoor kitchen comes with a price. While treated as an investment budget needs to be set wisely and not change during the process. To measure how much can be spent on the project it’s worth looking at average resale value. If the average is 71% of the investment are you fine with losing this 29%? What is the amount that you can spend and not get back later on?
This is a number to start with. If you’re ok with spending $3,000 a budget of $10,000 seems to be a reasonable idea. And this is a beginning. While getting quotes from contractors it’s worth working on a smaller budget than the one you really have. 10 – 20% of the original budget is going to be a cushion that can be used for unexpected expenses. Setting percentage aside before beginning guarantees project is going to be finished no matter what.
Before picking a contractor it’s worth getting quotes from 2-3 companies. All of them are going to give insights that can be used during the project. They can be regarding design, installation, preferences in the area, finishes, and so on. It’s great finding a specialist who is going to help with permits too. The best recommendation is usually one from neighbors, friends, or relatives, but if not contractor should be able to show his previous work.
What massively influences a budget is a design. There are basically two types of outdoor kitchens: perimeter and satellite. Perimeter outdoor kitchens are placed close to the house. They’re usually easier, less expensive, and faster to build (roof and floor are very often present, and fewer permits are needed). Satellites are outdoor kitchens afar from the house, which means more construction, more materials, more appliances, and more money.
If you do not want to risk losing any money a mobile solution can be a thing for you. They can look really stylish, can be transferred to another location, and do not need any permits or construction budget. Mobile outdoor kitchens tend to last long, as they’re stored in the garage during an offseason. They grow as a trend (even Ikea sells them), and there are plenty of designs to choose from – even a traditional one.
There is another way to be sure you will not lose money on an outdoor kitchen. Handy DIY can save up to 40% of the regular outdoor kitchen budget. It is a tricky way though because the project can get out of control. Recommended to experienced DIY.
When and how much value will an outdoor kitchen add?
There are a lot of factors that can influence a return on an outdoor kitchen, like the location, season, or buyers’ needs. But there are two factors, that are constant in the long term. First of all, the value of the property after outdoor kitchen installation grows more in locations where bbq season is year-round. Secondly, this is a feature that shows a status well, so it goes well with luxury properties. This is where an outdoor kitchen can be a demand.
Why is it so? Outdoor kitchens are a part of a bigger trend called outdoor-indoor experience, or outdoor rooms. They make much more sense in locations that do not get cold winters. For example, there is a higher average outdoor kitchen resale value in the Pacific region than in West North Central (5% more!). Mild winters are important, but the climate is not the crucial factor.
Outdoor kitchens can get very luxurious and expensive. They show the status of owners very well, so buyers of such properties are more likely to expect such addition. Therefore if your property is luxurious this investment has a higher rank to pay off, especially if the area is going to have an overall luxurious style and finishes.
What designs of the outdoor kitchen add value to a house?
While designing an outdoor kitchen area it’s worth knowing a bit more about placement recommendations, essentials, and finishes. All of these factors play a role in adding home value.
Outdoor kitchen location
Locating an outdoor kitchen close to the house has many advantages. The first one is a budget, as it is on average a less expensive solution. Thanks to the close to house location utilities are usually in place, flooring and roofing too. While an outdoor kitchen is so close to the indoor one it is possible to omit some elements, like an outdoor sink, or fridge. Very often a prefab island is going to work great as an amongst the wall structure.
Perimeter location is a great choice for an outdoor kitchen, but it has disadvantages too. It takes a lot of patio or deck space. Grill has to be located downwind to avoid smoking family and guests during meetups. Very often a vent hood is a must at the area. It is also important to take care of the interior while working on the exterior of the house – additional roofing or furniture can block a lot of sunlight.
Even though there are disadvantages close to house location wins in both: function and budget. Usually, perimeter outdoor kitchens are used more often than satellites. And this is basically the reason people build them: they want to entertain in the backyard a lot. From the budget point of view adding extra money to create an outdoor kitchen afar is just no go.
Outdoor kitchen essentials
There are appliances and functions buyers, who are interested in having an outdoor kitchen, are looking for in one. Outdoor kitchen must-haves according to buyers and realtors are:
- countertop space.
These elements are necessary to create a functional, separate outdoor kitchen, unfortunately, at the same time, they require plumbing, electricity, and gas. It’s possible a connection for these is already in place while building next to the house, but connections are going to eat a part of the budget.
On the one hand, the list requires a lot of work, but on the other, it makes choices easier, as there is no pizza oven or Argentinian grill. The list is basic, but all of the elements it incorporates make using the space convenient.
To this list, I would add lighting, as an outdoor kitchen area without a proper illumination is not going to work great. Lighting can emphasize some parts of the area, and hide others. Well planned is going to photograph well, which helps a lot while selling.
Outdoor kitchen finishes
This is actually a very important factor in resale value. Finishes of an outdoor kitchen should reflect the house finishes, especially if an outdoor kitchen is located along the wall, or on the patio. Finding the balance between dreams and property type is actually a key to a proper return on the investment.
So the first thing while designing an outdoor kitchen is looking at the exterior of the house and finding a way for an outdoor kitchen to blend in a bit. If there is a brick on the house it’s worth incorporating it in outdoor kitchen design. Same with the stone and other finishes. If the material cannot be copied a color or shape can.
For countertops, in my opinion, granite is always the best choice. Each slab has to be picked carefully though. Check more info on it here.
While stainless steel is, in general, a great material for outdoors it may not present very well in the backyard when overrepresented. It’s worth remembering that an outdoor kitchen is in the backyard surrounded by nature. Using natural or neutral materials in most cases is going to be a way to go.
When does an outdoor kitchen increase home value? 2 case studies
Now it’s time for two case studies of property remodels including an outdoor kitchen remodel/ addition. Both are based in California, one in Berkeley, another in Santa Monica.
The Berkeley Craftsman is a case of the overall renovation. A prior worth of it was $833,000, after the process was done it was sold for $1.35 million. Inside and outside of the house got vastly updated up to a coherent color scheme. But even though the inside of the house looks very modern and inviting CEO of Voila Design Home, Tiffany Fasone, states that an outdoor kitchen “has the most impact”.
An outdoor kitchen area has been updated with most of the features from the essential list apart from storage. It resembles home exterior in the color scheme. The lighting is impressive. There are both string lights, which are great for setting a mood, and fans, which are, in my opinion, the best fixture for the area.
The second property – Santa Monica Cali-terranean is rather a high end. An impact on the price is rather hard to provide, as the renovation was performed so the owners would stay. An architect, Joseph Marek, created an entertaining area in the backyard. He advises “People make the mistake of putting the barbecue far away, and then they end up never using it”.
An outdoor kitchen is placed under a pergola with lighting and heaters. Hole area is coherent and based on natural materials, like square pavers bordered by Mexican river pebbles.
I created this post so other people have more data on outdoor kitchen moneywise. What is the most important information regarding this subject you’d like to share with others? Please live it in the comment section.