Do Home Additions Increase the Value of Your Home?

Expanding your living space with a home addition is a smart way to increase your property value. However, not all additions are created equal. Understanding what makes a home addition worthwhile can help you maximize your investment.

The Impact of Home Additions on Market Value

A well-planned home addition makes your property more desirable to buyers and increases its market value. The higher the return on investment (ROI), the more money you recoup when you sell your home. Even if you don’t get a 100% return, you can expect the right additions to make your home stand out and sell faster, which is equally important in a competitive housing market.

Factors That Affect the ROI of Home Additions

Here’s a closer look at the factors that influence the financial return on home additions:

• Location: A screened-in porch is a more valuable addition in mild climates, while an additional bedroom may provide a greater boost in areas with high demand for family housing.
• Construction quality: A well-executed home addition increases property value more than a poorly built addition.
• Type of addition: Functional, universally appealing upgrades yield better financial outcomes than luxury upgrades catering to personal preferences.
• Market conditions: The housing market fluctuates, and timing can impact a home addition’s ROI. The upgrade will more likely generate a positive return if home values rise.
• Neighborhood factors: If an addition makes your home significantly larger or more expensive than others in the area, it may not recoup as much of the cost.
• Permits and regulations: Complying with local building codes ensures the addition is legally recognized. Unpermitted additions can create problems during property appraisals and sales.
• Project costs: If added value is your most important concern, consider the total investment required. An addition that costs significantly more than the value it adds may not be a wise financial decision.

Which Home Additions Add the Most Value?

Some home additions consistently offer better returns than others. Here are some of the most valuable upgrades:

• Expanded kitchen: A well-designed, modern kitchen is a major selling point. A kitchen expansion with an accompanying minor renovation has an average return of 83%.
• Garage conversion: Converting a garage into a home office, guest suite, or additional bedroom adds functional square footage. In high-cost markets, where additional living space is more important than a parking spot, a garage conversion can recoup 80% or more of the cost.
• Outdoor living space: Features like decks and patios create additional usable space and enhance curb appeal. A deck addition recoups approximately 50% of the investment.
• Additional bathroom: Homes with multiple bathrooms are more appealing to buyers. A midrange bathroom addition has an expected return of about 30%.
• Extra bedroom: Since the number of bedrooms is a major selling point, adding an extra one makes your home more attractive. A bedroom addition may increase home value by about 23% of the project cost.

How To Plan a Home Addition for Maximum Value

Proper planning ensures a home addition enhances your living space and boosts property value. Consider these steps:

• Assess market preferences: Research which home features are most sought-after in your area to guide you toward an addition that appeals to future buyers.
• Obtain necessary permits: Comply with local regulations to prevent future legal and financial issues.
• Work with experienced remodelers: Hiring a reputable design/build remodeling company ensures a smooth process and professional results.
• Budget wisely: Set a realistic budget and avoid unnecessary upgrades to ensure the addition remains a financially sound investment.

Call Us To Ask About Your New Home Addition

Blackdog Design/Build has helped homeowners in Southern New Hampshire and Northeastern Massachusetts transform their spaces for over 35 years. Our unique five-step design/build process ensures proactive project management.

Plus, we back our work with a three-year warranty. Whether you want to add a bedroom, expand your kitchen, or enhance your outdoor space, our team is ready to help.

Take the first step today to discuss your vision and goals for adding value with a home addition.