Home Mortgage Alliance Corporation (HMAC)

Going into a home addition with eyes wide open

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Published Date 10/3/2024

Good’ole Ben Franklin knew what to do when making an important decision. Place the plusses (the pros) of an idea in one column, and the minuses (the cons) on a list in front of you. Then examine which one stacks in favor.

Such is the case when considering building an addition to your home. Realtor.com’s Geraldine Campbell says whether you’re considering a second-floor home office that leaves your property’s footprint unchanged or an additional primary suite that cuts into your outdoor space, a home addition is a (really) big decision. “The process will likely take a considerable amount of planning, time, and money—but when the dust settles, that extra living space may be just what you and your family need to stay put for another five or ten (or more) years. So, is building a home addition worth it?” She spoke to a few experts to get their take.

Building an addition to your home can be a transformative experience, offering numerous benefits but also presenting some challenges. The most obvious benefit of a home addition is the extra living space it provides. North Carolina-based Realtor Ryan Fitzgerald notes, "I've had countless clients who've transformed their homes with additions, creating more room for growing families or adding functional spaces like home offices." Eric Bramlett, an Austin-based Realtor, adds that a well-executed addition gives homeowners the space they need without the hassle of moving.

In many cases, additional living space can increase your home's appeal to potential buyers. Bramlett observes that certain types of additions are particularly attractive: large, modern primary bedrooms and bathrooms, extra bathrooms (especially in larger homes), and expanded kitchens. While you gain indoor space, you may sacrifice some of your yard. This might not apply to second-floor additions, but it's an important consideration for resale value. Fitzgerald cautions, "From my experience, homes that lose too much yard space to an addition can be less appealing to buyers."

Adding square footage typically leads to higher property taxes and utility bills. Virginia-based general contractor Gabriela Narvaez advises homeowners to factor these ongoing expenses into their decision-making process. Another issue? Poor design or execution can actually hurt your home's value. An addition that's poorly designed or doesn't blend well with the original structure can detract from the home's overall appeal, adds another source.

Homeowners should plan for about three months of pre-construction work and six months of actual construction. As for costs, experts estimate $450 to $500 per square foot, meaning a 500-square-foot addition could cost between $225,000 and $250,000. Then add a 10% to 20% buffer to the estimated cost to account for unexpected expenses and delays.

Home additions typically have a lower return on investment compared to other remodeling projects. The 2024 Zonda Cost vs. Value report indicates an average ROI of 35% for a mid-range primary suite addition and 34% for a mid-range bathroom addition. However, these figures can vary greatly depending on location and specific circumstances.

Despite the challenges, a well-planned home addition can significantly enhance your living experience and potentially increase your home's value. If your current layout doesn't meet your needs, an addition could be the perfect solution to create your dream home. With careful planning, expert guidance, and realistic expectations, you can embark on a home addition project that not only improves your quality of life but also proves to be a worthwhile investment in your property's future.

Realtor, TBWS

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