Today we’re not talking about the stock market — we’re talking storage. As the title says, we transformed a previously VERY packed utility closet in our new kitchen into a much more useful space. It used to house only a bulky water heater and our HVAC system, leaving most of the under-stair area inaccessible. Now it’s practical, neat, and holds far more than it did before.
If you caught our drawer-by-drawer kitchen organization video, you may have seen a glimpse of this closet. Here I’ll walk through each step we took to turn this space from “mostly water heater” into a functional storage zone with real usable room.
The Utility Closet Before
We don’t have many “before” photos because the closet was nothing special: a home for the HVAC and a large electric water heater that blocked most of the storage under the stairs. The closet is deep, but the water heater obstructed more than half of the usable space.
On moving day this small patch of floor ended up as a catch-all for random bins and seasonal decor. It was functional in the worst way: items piled between the water heater and the HVAC with no real order.
The most frustrating part was knowing there was a large empty cavity under the stairs that we couldn’t access because of the water heater. In a smaller house, every bit of storage counts, so reclaiming that space became a priority.
That led us to step one of the makeover.
Step 1: Update (and Relocate) the Water Heater
We replaced the bulky electric water heater with a more efficient tankless model. Having used tankless systems in our other properties, we knew the space savings would be significant. The best part: our contractor installed the tankless unit on the exterior of the house. Mounted on the siding outside, it freed up the entire under-stair area and immediately opened up tons of storage.
With the old tank gone, we initially used wire shelves and stacked larger items under the stairs, but that setup felt chaotic and inefficient. Once the kitchen renovation progressed, we had a clearer idea of how we wanted to use the newfound space.
Step 2: Reroute Pipes and Wires
With the bigger equipment moved, the next obstacle was pipes and wiring that stuck out into usable space. We hired pros to re-route the HVAC tubing and the water lines so everything sat flush against the walls and behind the doorway. The work was straightforward but important: moving those lines cleared the back wall and made layout planning possible.
Once everything was out of the way, we could move on to designing storage that actually looked good.
Step 3: Customize a Cube Storage Shelf
We replaced the shallow wire shelving with a cube organizer. To elevate the look, we added brass furniture legs and topped it with a butcher block counter cut to size and sealed with cutting board oil. The result feels both practical and finished.
We use matching taupe fabric bins in the front-facing cubes to keep things tidy; they hold dog food, vacuum attachments, tools, and miscellaneous supplies. The remaining open cubes store toilet paper, beverages, emergency supplies, and our Berkey water filter, which we keep handy for potential emergencies even though our fridge now dispenses filtered water and ice.
There’s additional floor space beside the shelf for larger items like a dehumidifier, which helps control humidity since we’re in Florida.
Step 4: Add a Floating Shelf
We had leftover butcher block so we added a floating shelf above the cube organizer. We painted the metal brackets to match the brass legs for a cohesive look. The shelf holds mugs, a pitcher for watering plants, a handheld vacuum, and a few decorative items, which turns the closet into something that feels almost like a mini pantry or beverage station.
Step 5: Cover the Ugly
To hide the utilitarian HVAC unit, we built a removable cover panel from thin plywood trimmed with 1x2s and painted it the wall color. The panel hangs from eye hooks on a wooden rod near the ceiling so it’s easy to remove for servicing. Because the HVAC intake sits at the bottom, the cover doesn’t impede airflow or filter access.
The panel makes a big visual difference — the closet no longer reads as purely utilitarian but still remains fully functional.
Step 6: Take Advantage of Hidden Walls
Finally, we used the inside wall opposite the cube shelf to hang a dustpan, cleaning tools, and a fly swatter. We also installed a vertical under-cabinet light along the door molding. It plugs into an outlet we had installed when relocating the water heater and offers two brightness settings, providing useful illumination inside the closet.
So that’s how we turned a cramped utility closet with only a tiny bit of accessible floor space into a functional, attractive storage area. It feels much more like a thoughtful extension of the kitchen now.
Yes, the closet is shallow, but both of us can stand inside, reach the back corner, and access everything we need. The ceiling does dip toward the back as it’s under the stairs, but that’s expected — and well worth the extra storage gained.
We also cleared out and reorganized other less-glamorous items — like our upright vacuum — and made room for essentials and emergencies. The result is a closet that’s tidy, functional, and surprisingly pleasant to use.
Small changes — replacing the water heater, rerouting pipes, adding a customized cube shelf, a floating shelf, a removable cover panel, and sensible wall storage — added up to a big payoff. This closet went from wasted space to a useful, organized area that complements our kitchen renovation and makes everyday life easier.
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