Building an addition to your home can vastly increase its value. By how much is extremely important. This in part depends on your future plans. Hence, you should take the following into consideration before moving ahead with a home addition.
New Home Addition: The Importance of Value
The size of the addition will impact how much value it will add to your home. It’s important here to balance what you want with what it will bring in terms of value. For example, you can “over renovate.”
In order to prevent this, find out the market value of similar homes in your area that have the features you’re thinking about adding. Then, ask yourself, “Value-wise, will my home addition put me at the top of the market, over the top, or right in the middle?”
You don’t want your home addition to put you at or over the top value wise because it can take longer to recoup the value of the addition. It can also make it harder to sell if you don’t stay put long enough to recoup the value.
For every homeowner, this will be different. For example, if you plan to stay in your house indefinitely and your home addition puts you at or over the top in value, then it may not matter to you at all. However, if you think you might want to sell at some point, eg, in three, five or seven years, then the value that the new home addition will bring should be very important to you.
How to Calculate How Much to Spend on Your New Home Addition
To calculate how much to spend on your new home addition, take the difference between your home’s current market value, and the value once the addition has been completed. This figure represents the maximum you should spend – if a positive investment is required.
As you can see, a home addition is as much about the future as it is the present. An experienced home addition contractor can help you make the wisest investment – for your needs now, as well as future ones.
1 comment so far ↓
Thanks for the tip on how to figure out how much to spend. I’ve known too many people that put too much money into home renovations and then couldn’t make their money back when they sold their home.