What Home Additions Are Worth the Money?

Bathrooms

• Adding an extra bathroom to a single bathroom home will almost certainly yield a high return. If the homes in your neighborhood are single-bath homes, your house is now the more desirable commodity when it comes to market value.

  Expanding a master bedroom and including a master bath not only adds square footage to the house, it also meets what may be considered a new standard in home building. Homebuyers are becoming accustomed to seeing spa-like bathrooms in master suites. Adding just such a luxury improvement to your home may make your home worth more on the market than neighboring homes lacking that amenity.

Kitchens

• Increasing the size of your kitchen adds square footage and increases the functionality of the kitchen. If, however, you create a large gourmet kitchen complete with a temperature-controlled wine closet and dual ovens at a cost of $100,000, but all other homes in your neighborhood possess modest-sized kitchens with no such amenities, your return is considerably lowered. The neighborhood market value is unlikely to support a $100,000 addition.

  If you increase the kitchen size and functionality at the cost of less than $40,000, your return is likely to be higher since your home may be the more desirable commodity and therefore command a higher price.

Family Rooms

• If your home does not have a family room, and many others in the neighborhood have added that amenity to their homes, your dollar-for-dollar investment may not be as high. When family rooms are standard in the neighborhood, a lack of one hurts your market value. Adding the family room improves your home by meeting the community standard. The addition is worth the money in terms of resale value, even if the return on the investment is low.

  Converting existing space, such as a basement, into a family room may not physically increase the square footage of your home, but it does increase the usable living space. Making the best use of all space by increasing functionality and usability will more likely increase your market value, making the investment worthwhile.