The Right Room Addition Can Add Resale Value to Your Home
by Roger Diez
You have looked at purchasing a new home, but have decided to stay where you are. You can give yourself more space by adding to your existing home, but make sure you consider the return on your investment when you ultimately decide to sell.
Room AdditionCost Versus Return
Studies by organizations, ranging from real estate associations to the Wall Street Journal, have examined the cost benefits and return on investment (ROI) of various home improvements. Depending on whom you listen to, where you live, and the current condition of the housing market, there are wide variations in estimates on room addition ROI. Typically, the best you can hope for is to recoup about 85 percent of your room addition investment when you sell your home, but some home additions may net you less than 50 percent.
Highest Return Room Additions
Generally speaking, adding a bathroom or expanding a kitchen can ensure the highest return on a room addition investment. The room additioncost of a bathroom is relatively low, but gives higher functionality to a home, particularly one with a large family. And a larger kitchen is nearly always a positive selling point. A family room additions will also yield a decent return, but home offices and sun rooms are typically in the 50 percent range of return.
Where You Live Affects Room Addition ROI
Regional variations can greatly affect your return. A wooden deck in California is a more valuable addition than it is in Michigan, because it can be used for more months in the year. But a second-story addition in an earthquake-prone area greatly increases room additioncost, hence a smaller return.
The Bottom Line on Room Additions
Although return on investment is important when considering room additionplans, your current needs are a critical factor. If you plan to live in your home for some time, the enjoyment and use you get from your room addition may override a less than stellar ROI. Do what works for you.
About the Author:
Roger Diez is a freelance writer who has lived through two room additions as well as a myriad of other major household projects.