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Understanding Outdoor Kitchen Financing

Ultimate Guide to Outdoor Kitchen Financing
Jacqueline DeMarco
Jacqueline DeMarcoUpdated November 19, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Do you dream of having an outdoor kitchen for cooking meals and entertaining family and friends? Perhaps you’ve even envisioned your property with a pool, backyard outdoor kitchen, and stone patio. Your dream can become a reality with an outdoor kitchen makeover. Building a backyard kitchen can add value to your home and provide you with years of enjoyment. And if you need help covering the costs, outdoor kitchen financing is available. Read on to learn about the cost of building an outdoor kitchen, plus outdoor kitchen financing options you might want to consider. 

Cost to Build an Outdoor Kitchen 

The cost of building an outdoor kitchen is generally about $13,000, though it can vary widely based on factors like the scope of the project and the contractor you use. Size plays a big role in pricing. You can expect to spend between $40 and $130 per square foot to build an outdoor kitchen. Labor costs for building an outdoor kitchen are also significant. In fact, labor expenses typically account for about 70% of the total expense of this type of home renovation project. It’s often necessary to hire a few different specialists, such as a general contractor, electricians, plumbers, and concrete specialists, to complete an outdoor kitchen build. A custom-built outdoor kitchen can cost up to $50,000. And if you decide to add other components to your backyard as well, like a pool or extensive landscaping, the costs will go up even more. In that case, backyard remodel financing might be helpful.

Factors that Affect the Cost of Outdoor Kitchen Projects 

The reason an outdoor kitchen backyard makeover can range so much in price is because so many different elements may come into play. Typically, an outdoor kitchen consists of areas to prep and cook food and includes counters, cabinets, and a grill. More elaborate outdoor kitchens also have a sink, a refrigerator, a pizza oven, and a bar. Here’s a look at common price ranges for the typical components of an average outdoor kitchen project (including installation).
  • Countertops: $10 to $100 per square foot 
  • Cover (for weather protection): $25 to $100 per square foot 
  • Patio: $40 to $100 per square foot 
  • Cabinets: $200 to $600 per square foot 
  • Plumbing: $300 to $1,500 per square foot 
  • Lighting: $500 to $3,000 per square foot 
  • Appliances: $1,500 to $7,000 per square foot 
Remember that the size of the outdoor kitchen is a major factor in how much it will cost to build. For example, it’s often necessary to carve out at least 100 square feet for an outdoor kitchen. If you want something larger, the costs would likely rise significantly. A 500-square-foot kitchen tends to cost between $20,000 and $65,000.The materials you choose for the project can also impact the cost. These are some common options:
  • Tile: $1 to $50 per square foot
  • Wood: $30 to $60 per square foot
  • Quartz: $55 to $155
  • Stainless steel: $80 to $225.

How Does Outdoor Kitchen Financing Work? 

There are a few different options to consider for outdoor kitchen financing. Usually, the way kitchen financing works is that the homeowner either takes out an unsecured loan (such as a personal loan) or a secured loan such as a home equity loan that uses the equity they have in their home as collateral. Unsecured forms of credit tend to come with higher interest rates than secured forms of credit.

Does Adding an Outdoor Kitchen Increase the Value of Your Home?

Typically, any major addition to a home’s living space can help increase its overall value. According to estimates, homeowners typically see a 71% average return on their outdoor kitchen spending. 

Pros of Outdoor Kitchen Financing 

Some of the advantages of using financing to build an outdoor kitchen include:
  • Spreading out the cost of a large purchase over time
  • Adding to the value of your home
  • Being able to get more use out of backyard space
  • Manageable payments in installments

Cons of Outdoor Kitchen Financing

There are also disadvantages associated with financing a major home project, such as:
  • Fees and interest payments can increase the total cost of the project
  • Missed payments can damage your credit score
  • Increases the total amount of debt you have

Ways to Finance Your Outdoor Kitchen 

If you decide you want to finance the cost of an outdoor kitchen, these are some of the options available. 

Personal Loans 

Home improvement projects are one of the common reasons for personal loans. Personal loans are flexible and can be used for almost any purpose. With a personal loan, you get a lump sum that you pay back in regular installments over time with interest. Personal loans tend to have better interest rates than credit cards. One of the tips and tricks for getting a personal loan is to make sure your credit is in good standing. Typically, the higher your credit score, the lower the interest rate you can get on a loan.Installing an outdoor kitchen can be one of several ways to use a personal loan you might want to consider.

Credit Cards 

Credit cards are easy and convenient to use. However, they tend to have high interest rates. You could look for a credit card with a 0% APR introductory offer. As long as you pay off the balance of your outdoor kitchen in full before the introductory period ends, you won’t owe any interest. If you don’t pay it off, however, you may end up paying a very high amount of interest on the remaining balance. 

Home Equity Loans 

Home equity loans use the equity you already have in your home as collateral, and you can usually borrow up to 75% to 85% of your equity. Repayments are made in fixed monthly installments, usually for terms of five or 30 years. However, if you fail to repay the loan, the lender can foreclose on your home.

HELOC 

With a home equity line of credit (HELOC), you can use the equity in your home as collateral to get access to a line of credit you can use whenever you need to borrow money. It’s usually possible to borrow up to 85% of available equity. But again, if you default on the loan, the lender can seize your house.

Construction Loans 

A construction loan is typically a short-term loan with higher interest than a personal loan. Construction loans last as long as your building project does, and then usually must be repaid. These loans are mainly used for building a home.

Personal Loans With Lantern

If you decide that a personal loan is the right financing option for your outdoor kitchen, comparing personal loan interest rates is easy and convenient with Lantern by SoFi. All you have to do is fill out one simple form and you can explore offers from multiple lenders in order to choose the one that’s best for you. Check out personal loan rates today with Lantern and see if you prequalify.

Frequently Asked Questions

What are some outdoor kitchen financing options?
Can you use a personal loan for outdoor kitchen financing?
What are the advantages of outdoor kitchen financing?
Photo credit: iStock/lovro77
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About the Author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a personal finance writer and editor based in Southern California. While she spends the bulk of her time writing about complex financial issues, she also tackles a variety of subjects ranging from food to fashion to travel. Her work can be found across dozens of publications such as Credit Karma, LendingTree, Northwestern Mutual, The Everygirl, and Apartment Therapy.
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