how much of an increase in value will I see doing a home renovation?
October 28th, 2007 | by admin |Mr Yankee asked:
I am thinking of having a 300ft addition built. This addition will create a master bedroom suite and an large updated kitchen. Estimated cost of renovation 100,000.
Question posted courtesy of: Victoria
I am thinking of having a 300ft addition built. This addition will create a master bedroom suite and an large updated kitchen. Estimated cost of renovation 100,000.
Question posted courtesy of: Victoria
4 Responses to “how much of an increase in value will I see doing a home renovation?”
By HyperDog on Oct 30, 2007 | Reply
Not enough information!
If the house is currently only 600 sq ft, then adding 300 sq ft might increase the value quite a bit. Will it equal or surpass $100K? Again, not enough info - how much would the house sell for w/o the addition? How much would the other houses in the neighborhood sell for? Is your house similar or is it on the edges of a more upscale development?
Your best bet would be to talk to an experience local realtor or an appraiser - most of them will come out and talk for 1/2 hour for fifty bucks (often longer) and the information you get may save you a lot more money.
By eclipse on Oct 31, 2007 | Reply
if you put in 100,000 in adding a room and increasing your square footage by 300 sqft id excellent you will gain 100% in profit if you sell it. Make sure you present the rooms and the house in a way that makes the buyer comfortable. Avoid clutter, and too many personal touches. Make rooms neutral but inviting. With neutral setting add colors like rich browns and oranges too balance everything. Kitchen should be modern to contemporary like granite countertops and nice wood finishes would make a good sale. Good luck!
By Paul in San Diego on Nov 1, 2007 | Reply
The renovations that give you the most bang for your buck (increase in value versus how much you pay) are adding bathrooms, updating kitchens, and adding bedrooms.
My estimations below are based on a major remodel that I did last year and then had the house appraised for a home equity loan. I had the house completely gutted and rearranged, including all new plumbing and electrical. I then added about a 300 square foot master suite, with a 100 square foot master bath and 50 square foot walk-in closet. I also added about 200 square feet to the back of the house to extend the kitchen, and make room for a dining area and laundry closet. I spent $300K, and the value of the house went from a pre-construction appraisal of $725K to a post-construction appraisal of $960K. It wasn’t a 1-to-1 increase in value, because the updating of the plumbing and electrical were considered maintenance items.
For the master suite, it depends on what your current house configuration is. If this makes the house a 3- or 4-bedroom house, figure that you get the increased value for the square footage added (about $200 a square foot) and another $30,000 (in San Diego, anyway) for the fact that you have that additional bedroom and bathroom. 3- and 4-bedroom houses are the most desireable configurations for home buyers.
So, you’re looking at an additional $90K for that addition alone. For the kitchen, you get about 90% back on your investment in increased value, especially if you’re adding granite counterspace, custom cabinetry, and new appliances.
So, I would say you’re going to get pretty much all of your investment back in the increased value of the home, as long as the addition doesn’t make your home overbuilt for the area.
By cmira4 on Nov 3, 2007 | Reply
Renovations rarely add to the value of the home. With such an extensive and expensive renovation, it may add $10-20,000 value to your home. Not worth it, if the reason for renovation is to sell your home for a better price. If it is for your own satisfaction, then do whatever you want. It is for your own pleasure.