You love your house. When you first moved in, it was the perfect fit for you. Not too big, not too small–just right. But now your family has grown and the house is starting to strain at the edges.
So what do you do? Well, your two main options are moving to a larger house or expanding your current house with a home addition. For families attached to their current home and where they live (which describes a lot of people in Mercer and Darke counties!), you can rule out moving.
If it’s time to expand, then, here’s what you need to know about the benefits of home additions — and what’s going to add value to your home.
Why should I add on to my home instead of moving?
When you’re deciding whether to add on or move on, the two main considerations are cost and overall suitability.
As far as costs go, it’s difficult to compare the two in general terms because it depends so much on your personal situation. The house addition cost versus the cost of moving is subject to the scope of the project and the new houses you would be looking at in a given area. That’s something that each homeowner will have to determine as they lay out the costs.
The advantage of adding on to an existing home is much easier to determine when you look at overall suitability. It’s simple: you’re already settled in your house and you picked it for a reason.
Adding on to your existing home means you’re staying in a house you’re emotionally (and financially) invested in. You might like the school district you’re in or enjoy the group of friends you’ve found in your neighborhood. You might be close to family or be a short walk away from the library. Moving to a new location might mean giving those things up.
If you’ve decided to improve your existing house, the next thing you need to do is decide what your priorities are.
What types of rooms should I add to make my home more valuable?
There are two main things to keep in mind when deciding rooms for a home addition: what you need and what will boost your home’s resale value.
If you’re thinking about adding on, you’ve obviously decided you need more space for your growing family. Determine where you need that space most to start making your addition priority list. Do you need a new bedroom to keep your kids from entering into a civil war? Would increasing the living space help lessen the feeling that you’re all living on top of each other? How about a bathroom to make the mornings a little less hectic?
At the same time, consider what’s going to add the most value to your home. After all, home addition costs aren’t a minor budget item. If you’re going to spend the money, you might as well do it in a way that gets the most for your investment.
The return on investment rate for addition projects varies widely by area and scope. You can check out specifics in the 2017 Cost Vs. Value Report, but here’s quick list of the national average rate of return on basic room addition types:
- Bathroom: 53.6%
- Family Room: 69.3%
- Patio: 54.6%
- Wooden Deck: 71.5%
- Master Suite: 64.8%
Percentages are determined by the job cost compared to the resale value
You should also take into account what will make your house easier to sell, should you ever decide to go that route. For example, a National Association of Home Builders study found that 47% of home buyers want three bedrooms while 32% want four, 65% want two or two and a half bathrooms, and 53% want a two-car garage.
The best way to go about making a decision that takes all of this into consideration is to make a wish list that has everything you would want and then score it by what’s going to give your home the most value.
Average Home Addition Costs
So how much will a home addition cost you? Well, HGTV estimates that you’ll spend anywhere from $100-$200 per square foot.
The costs will obviously vary by project. But as an example, Home Advisor places the cost of adding a bathroom at up to $25,000. Keep in mind, that depends on who’s doing the work and the scope of your project.
Ways to Pay for a Home Addition
Your local bank can help you finance a project if you don’t want to pay for it out of pocket or risk using up your savings or emergency funds.
A home equity loan is one great option for homeowners. They’re such a good option because the interest rates are generally lower than other consumer loans and they’re easier to qualify for because your home secures them.
Another solid option for a home loan is a HELOC. A HELOC is a revolving line of credit against your home, using equity you’ve accumulated as collateral for the loan. Rather than borrowing a specific dollar amount for one specific purchase, a HELOC provides a maximum amount that you can borrow over a specific time period, such as five or 10 years.
You only pay the interest on the amount you’ve used (not your maximum credit line). The rate is variable but they’re typically lower than credit card interest rates.
Home Addition Tips
Here are some things you might want to take advantage of when adding on:
- Consider a bump-out addition to add space without a huge cost. The experts at HGTV estimate it can save you 15-30% compared to a full scale addition. The only downside is it may limit the scope of the addition.
- Add on without adding on. In other words, add rooms to the existing structure of your house by finishing the basement or adding an attic bedroom.
- Add living space with a deck. It adds a lot of value to your home and you won’t need to pour a foundation, making it cheaper than adding on more interior living space.
- Check out Home Advisor to get a better idea of what all you’ll need for your project. It’s a great resource for cost comparisons, ideas, and pro tips.
- Learn how to deal with the hassle of a remodeling project with this great article from NAHB.
The best tip is this: talk to your local bank representative. They can help you secure a home loan and help you through your home’s growing pains. Work with them to find the best lending strategy to make sure your house grows at the same pace your family does.
Let us help! Call 877.672.4543 or visit a Mercer Savings Bank location near you to get the ball rolling.