Children keep on growing. Families continue to outgrow their homes. Folks still need that first-floor master, or heart-of-the-home kitchen, or … (your hope here). Life just marches on. Is your home in step?
Five key factors to consider when deciding whether to add on to your home
It’s a question many people are asking in this economy: Should we add on to our home or sell in a difficult market and trade up?
1) If you love your home
Room additions should only be considered if you love the qualities you cannot change:
- your neighbors
- the school district
- the amount of traffic on your street
- the size and layout of your lot
- your commute
- access to shopping
- the quality of life in your neighborhood
If these qualities are issues, then looking for a new location may be the way to go. If you love the spot, then tailoring your home exactly to your everyday lifestyle while improving its value may make sense.
2) If you plan to stay
You’ll only want to consider an addition project if you are planning to stay in the house for several years. Even in today’s economic climate, room additions can be the answer and deliver a tremendous boost to the value of your home. They can fulfill an immediate or long-term family need and can make your home easier to sell to a future buyer. But if your primary goal is strictly resale, stick to minor remodeling only.
3) Add on for your needs, not for resale
Your main focus should be to build an expansion that perfectly suits you and your family’s everyday living needs. Otherwise, why bother to add on? But it’s also important to consider how the new space will be perceived by potential buyers when (or if) you ever move. Thoughtfully conceived and quality-built additions can both meet your needs now and translate into a re-sellable asset in the future.
4) Consider cost versus value
Each year, Remodeling Magazine, a leading industry trade journal, works with real estate agents around the country to evaluate the resale value of popular remodeling projects one year after completion. And there’s the kicker. Most owners who remodel or add on stay in their homes far longer than a year after the project is complete. But the report does have value. It provides us and our clients a baseline to compare the costs of some common projects and offers information toward figuring out the best solution for their unique circumstances.
Below are some of the report’s findings from our region (Tennessee, Kentucky, Mississippi and Alabama):
-
15-by-15 attic bedroom addition, dormering out, with 5-by-7 bath and standard appointments:
Regional Job Cost: $43,535
One-Year Resale Value: $39,360
One-Year Cost Recoup: 90.4%
-
6-by-8 bathroom addition with standard appointments:
Regional Job Cost: $34,672
One-Year Resale Value: $23,606
One-Year Cost Recoup: 68.1%
-
24-by-16 master suite addition with standard appointments:
Regional Job Cost: $92,216
One-Year Resale Value: $63,940
One-Year Cost Recoup: 69.3%
-
200-sf major kitchen remodel with standard appointments:
Regional Job Cost: $53,937
One-Year Resale Value: $39,344
One-Year Cost Recoup: 72.9%
These figures are interesting, but your house isn’t just an investment. It’s the place where your family lives and friends gather. If you intend to live in your home for several years, short-term return figures are less important than if your primary goal is to resell. The value you place on ease of living and the enjoyment of home and family may far outweigh any presumed or estimated payback you get at some unknown point in the future when it comes time to sell.
5) Last but not least
Two more quick key factors in building a high-value addition: Do not over-improve and do not build an addition that sticks out like a sore thumb. And remember that building an addition is a big project. You’ll want to make sure you are choosing the right design-build team for your project and your budget.
To see the full Remodeling Magazine Cost vs. Value Report, click the “Resource” tab and select “Links”.
