Which Home Addition can increase its resale value?

Cremodeling, does it add value?Q. I just purchased a 900 sq. ft. 2 bedroom, 1 bath home. I am considering either adding an additional full bathroom off the master bedroom and/or enclosing the patio to make a sun room.
My questions are:

1. What is the better addition to make in terms of resale value, resale potential, return on investment?
2. Do you think the investment is worth it in terms of resale value, resale potential, and return on investment?

I’m curious if a 2 BR, 2 BATH is much more marketable than a 2BR, 1BATH? I am also considering adding an entire master suite, complete with full bedroom and bath, making the home a 3+2 but not sure if the extra expense would be justified in terms of return on investment.

If you had the money for any of these additions, which one(s) would you do? Or should I just leave the property as-is?

CJ’s Answer
Your return is dependent on a several factors:

1.) Will adding rooms/bathrooms be consistent with neighborhood? In other words, if you build a mansion in the middle of 2BR/1BA bungalows, you will never get the return as if you were building a mansion along Bel Air Avenue. So make sure you have input from a local real estate agent in regards to the neighborhood consistency, value, and general appreciation predictions. Is this an up and coming neighborhood? Are other owners remodeling? etc.

2.) Additions should flow well with the rest of the house. Quirky add ons (cramming a bath in a closet etc) do not get the return that a well planned design within flow of the current floor plan will. Make sure it can be done in a way that improves the floor plan and not hinders it.

3.) Bedrooms in general bring the most return but must be balanced with baths and living space. No sense in having 6 bedrooms and 1 bath. Two bedrooms/two baths are great for small families, roommate situations and guest. It is a great rental combination as well if the property may someday be used as a rental. Sun rooms, least value when compared to adding a bedroom or bath. In my opinion bath, bedroom, then sun room but again it depends on how it will be done and the rest of the neighborhood. For example, the cost of adding a bath may be significant simply because current plumbing can not be tapped into and new plumbing (slope), significant trench digging etc may make a bedroom more cost effective and a better return on investment.

You can see how my answer quickly becomes: It depends.

Here is a great link to remodeling returns by the NAHB. Let me know if this helps.

My top recommended additions for California residences:
1.) Green wherever you can (grey water, low flow water systems, tankless, low maintenance yards – less grass)
2.) Efficient living space – larger kitchens (busy families eat, entertain, and do homework around the evening meals)
3.) Master suites = walk in closets, shower tub separate, double vanity for busy couples getting ready for work.
4.) Outdoor kitchens – our weather is perfect for taking it outside. Inset grills and refrigerators with low maintenance arbors and patios.
5.) Movie rooms – spaces large enough to view the large panel screens coming out.
6.) Beds/Bath consistent with neighborhood growth and ideally one bedroom/bath on first level of any two story home. (aging parents, won’t leave the nest kids)

Got a real estate question? Talk to CJ!

Tags: , ,