Besides providing your home with more living space, a home add-on can be a fantastic investment. However, before embarking on such a project the homeowner should first consider several important items. These items include: house market values in the neighborhood, financing, size and scale of project, architecture, timetable for completion, personal disruption/inconvenience threshold and the sweat equity commitment level.
Size of Addition and Market Value
Prior to actually breaking ground on a home add-on, it is best to first determine what you are searching in terms of additional living space. For example: How many square feet? What types of rooms? Once this is understood, it is then important to find out the market value of homes in the local area with similar size and features to the new and improved home. With this information the homeowner can then calculate the difference between their current home market price and the new and improved home market value. This difference should represent the maximum budget for the new addition if a positive investment is desired. For example, a homeowner would not want to spend $50,000 on a new home addition that provides only $25,000 in increased market value to the improved home.
