Today we’re not talking about the stock market—we’re talking storage. As the title says, we turned a formerly overstuffed utility closet into valuable extra storage for our new kitchen. That closet used to be mostly water heater and HVAC, leaving little usable space. After some updates and a few smart choices, we gained a surprising amount of organized storage—enough to make a real difference in a smaller home.
If you saw our drawer-by-drawer kitchen organization video, you’ve already glimpsed this closet. Here we’ll share a full walkthrough: what it looked like before, the practical steps we took, and how it now functions as useful and attractive storage.
The Utility Closet Before
We don’t have many “before” shots because the closet was essentially a service cavity: an HVAC system and a large electric water heater dominated the space. The closet is deep—it runs under the stairs—but the bulky water heater blocked access to most of that area, making it inaccessible for regular storage.
In the early days we simply piled bins and seasonal items into the small gap between the water heater and the HVAC unit. It was temporary and messy, and knowing there was useful space sitting behind that tank felt like a waste.
The main problem: that water heater blocked a large, perfectly usable cavity under the stairs. In a small house every bit of storage counts, so our first priority was to free up that space.
That led to the first decisive change.
Step 1: Update and Relocate the Water Heater
We replaced the bulky electric tank with a compact, energy-efficient tankless unit. In our region it’s common to mount tankless heaters outside, so we had ours installed on the exterior wall behind the closet. The result: a modern, smaller heater and a huge amount of reclaimed floor and under-stair storage inside the closet.
With the tank removed, the previously unreachable space opens all the way to the back of the closet, which was a game changer for storage planning.
At first we tried temporary wire shelving and whatever fit on the floor, but it quickly became clear we needed a more intentional solution.
Step 2: Reroute Pipes and Wires
Next, we cleared the way by moving a few obtrusive tubes and pipes. For about $280 we hired professionals: HVAC technicians repositioned the tubing and piping so it hugged the right side of the closet, and a plumber rerouted the water lines to run discreetly behind the doorway. Clearing these obstacles let us use the full back wall for storage.
With utilities out of the way, we could design storage that looked good and worked well.
Step 3: Add a Customized Cube Storage Shelf
We replaced the shallow wire shelving with a cube organizer. To elevate the look, we added brass legs and topped it with a cut-to-size butcher block counter sealed with cutting board oil. The result is sturdy, attractive, and much more functional for everyday items.
We use four matching fabric bins in the visible cubes to keep the space tidy. Those bins store dog food, vacuum attachments, tools, and other odds and ends. The remaining open cubes hold toilet paper, beverages, emergency supplies, and our Berkey water filter for emergencies. The butcher block top doubles as a convenient counter for mugs, a pitcher, and a handheld vacuum.
There’s also room beside the shelf for larger items like a dehumidifier, which helps keep humidity under control in our climate.
Step 4: Add a Floating Shelf
With leftover butcher block, we installed a floating shelf above the cube unit using painted metal brackets to match the brass legs. The shelf adds useful vertical storage for extra cups, a pitcher, and a few decorative items to make the closet feel intentional rather than purely utilitarian.
Step 5: Hide the HVAC with a Removable Panel
To soften the utilitarian look, we made a simple cover panel from thin plywood trimmed with 1x2s and painted to match the wall. It hangs from eye hooks attached to a closet rod so it’s easy to remove for HVAC service. The intake is unobstructed, so airflow isn’t affected and filters are accessible.
The panel makes a big visual difference: the closet now reads as a tidy pantry-like space instead of a purely mechanical room.
Step 6: Make Use 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 mounted a slim under-cabinet style light vertically along the door molding for additional illumination. It plugs into an outlet that was added when the water heater was moved, and offers two brightness settings for convenience.
So that’s how this modest utility closet went from cramped and wasted to functional and tidy. We can stand fully inside, reach the back, and access stored items easily—while still keeping mechanical systems serviceable. A few targeted upgrades transformed a tiny, overlooked space into meaningful storage that supports our kitchen and daily life.
Note: images show the progression and final result so you can see how much more useful the space became.