Should You Add Onto Your Home?

Perhaps your growing family is feeling cramped in its current quarters, or you have some extra cash and want to know if putting it into your home would be more worthwhile than using it toward buying another home?

In the current economy, many homeowners are finding their homes still being valued somewhat below what they may have been worth in 2006 during the peak of the U.S. housing bubble. Though housing prices are back on the rise, many homeowners would prefer to get more out of their homes at the point of sale.

An addition can be a great compromise, giving you the extra space you need along with something new to come home to — even if it can’t be a new home, quite yet.

The top three types of additions, according to the annual Cost-to-Value Report, include the following.

Seasonal Use Spaces

In some ways, it’s ironic that these seasonal add-ons have such high return rates; after all, they’re only usable for parts of the year. Perhaps it’s that family BBQ or just being ready to enjoy the summer rays, but decks and sunrooms are definite favorites, when it comes to additions, with wood decks achieving the highest return of any additions at 70.1%. With the lowest average cost of any additions listed, this project is likely to cost you just over $10,000, with a return of over $7,000. Composite decks are pricier, at around $15,500, but only earn about a 62.8% return on your investment. Sunrooms, of course, offer greater flexibility, sometimes being able to be used for 3 of the 4 seasons, but you’re only likely to see your home’s value increase by $34,000 after a $74,000 investment.

Single Room Additions

The three most popular single-room additions include bathrooms, family rooms, and master suites. All three of these additions require the help of expert contractors and, preferably, professional architects. For a $40,000 investment, you can expect to receive back only about $20,500, a 51% return. Family rooms cost about twice that amount, at $83,000, but the return is nearly 10 points higher, at 60.2%. The Master Suite earns about the same percentage as the family room, but it requires a higher investment of over $100,000.

Since you’ll be changing the blueprint of your home, you may be limited by building codes. Matching siding and ensuring a leak-proof roof can also be hurdles. Bathrooms come least expensive, in part due to their comparatively small size. Of course, room additions can really eat up your yard, so that can be a down side, as well.

Second Stories and Out Buildings

The addition of a garage or a second story can definitely be a plus, both for your convenience and resale value. Garages cost nearly $58,000, on average, with a return of 57.2%. At $166,000, adding a second story costs more than any of the other additions mentioned, but the 62.4% return rate will mean a major increase in your home’s value. Especially if your home is one of the few in your neighborhood without an upstairs or that coveted attached garage, adding those spaces can mean even more of a benefit in the way of saleability.