If you are looking to add some desirable square footage to your home, youโre right to think it will also increase home value as well. Whether you are looking to add a new bedroom, bathroom, deck, or a whole story, additions are a great way to make more out of your existing home without moving. That added square footage will make living more efficient and enjoyable, and can also increase the value of your home should you ever sell. The only thing to note is that additions are not cheap remodelling projects.
Additions and Cost
While the investment needed to fund a home addition is often steeper than an interior renovation, you definitely get to reap the benefits of your investment in the end. Here are some average costs and ROI numbers to show that additions will benefit your homeโs value long term.
New Bedroom: On average, adding a whole new bedroom with an ensuite to a home can cost around $155,000, depending on size, materials, etc. This type of addition can lead to about a 48-55% return on investment in home value.
New Bathroom: If just adding a new bathroom, you can expect the cost to be around $55,000, again depending on materials, size, labour, etc. A bathroom can give you a return of around 53%
A New Deck: Adding a deck to your yard is a great way to add some living space to your exterior, but it can cost up to $20,000. The good news is that decks have an ROI value of around 65%.
Other additions can include expanding existing spaces without creating new rooms or floors, each with its own return benefits.
Are Additions Worth It?
Additions are expensive and require much thought, research and commitment. You also would need to determine if you intend to stay in the home long-term, or are looking for a quick sale.
With additions, donโt expect to recoup the entire cost when selling the home. But, most additions will raise your expected return by a healthy percentage to be noticeable. Some renovations are more so than others, such as a new deck bringing value upwards of 65%.
Youโll also want to consider if your intended additions could negatively impact resale. One way this can happen is if you do so much to the house that its value skyrockets over the neighbourhood. For example, if you live in a neighbourhood of 2,000 sq feet homes and you add an additional 1500-2000sq foot in additions, it can become difficult to sell as your home becomes โover-improvedโ to the market. This results in lower returns on your investment and fewer chances of selling your home to the local market.
Do Additions Increase Property Tax?
Additions can increase your yearly property tax bill. As additions and pools add value to the home, your property could potentially be assessed a higher value by the government assessment agency. This would lead to higher taxes hitting your wallet.
Conclusion
While the cost of home additions can be considerable, there is a great potential reward in return when the time comes to sell the home. Finishing a basement, adding a deck, building a room atop the garage, and more – all of these additions have the chance to up the value of your home so you can earn more when you list it on the market.
If you are looking to expand your living space with reliable home addition services, contact Contempo Renovations Solutions today for a full range of residential construction services.