COMMUNITY FORUM

Lefty

05:01AM | 01/31/99
Bvmisc
I'm considering a second-floor addition to a 70+ year-old frame house in the Northeast. It would create a master suite with a new full bath. The expansion (done completely over the existing first floor & full foundation) would also enclose a new stair to the third floor (attic) which I would like to dormer out into two new bedrooms and add a full bath as well.

My question: How do I know if I can recoup the construction expense at resale time? Is there a standard formula I can follow?

DR HOME

11:02AM | 01/31/99
As you have heard, there are three things that determine the value of a home-area, area and area. The only rule that you can follow is to determine the value of single story and two story home in the area that you live. Compare that with the cost of your addition and make your determination.

BobF

03:04AM | 02/01/99
Dr Home is correct about location and comparing to other houses around you.

First - don't do any project like this if you are worried about resale unless most of your neighbors have two-story houses. Do it because you will enjoy it for many years.

Second - If the other houses are ranches, you may not get the $$ out of it. You can't get $200,000 for a house in a $100,000 neighborhood.

Lefty

02:39PM | 02/05/99
I appreciate the wisdom of what's been said here. I guess I was looking for something like this: If you add a master suite (renovate a kitchen, whatever), you tend to recoup XX% of the construction cost at resale time. Certainly there are limits to how much you can differentiate your home from the neighborhood because the location surely does set the baseline value. But within that, I was hoping to get a sense of what's a "good" addition and what's not.

BobF

02:43AM | 02/08/99
Lefty,

You still sound like you're trying to make a profit. However, yes there are guidelines as to xx% recouped per improvement. A local realtor can help you with that.

Another idea is to see what the addition would cost, get an idea of what the house would sell for with the addition (and be conservative). The difference will tell you what you want to know.

LisaR

06:55AM | 02/18/99
Hi there

I am in a very similar position. I, recently, purchased a home built in 1916 that currently has a finished attic. After talking with contractors and designers, and especially a bank that does 203K Loans. I've decided to add large gables rather than an entire seacond floor.

One gable will be just a master bedroom and the other will be a larger bath and allow room for the new stairwell and a sitting room. This will still allow us to have two smaller bedrooms with the attic style ceilings at each end of the house. There were several reasons we decided to do this.
A big reason was price. Here in our area, it's costing $90 - $100 a square foot for new construction. That's simply more than I am willing to spend.

My best source for assisting with my decision was a bank that does 203K loans. They'll assess your costs vs. the financial rewards of the addition or remodel.

It's also very important to talk with a designer and have them take a look at your foundation. Your foundation's ability to accomidate an additional floor and attic can, often, make your decision for you.

I think that if you plan on spending 15 to 20 years in your home, any addition you do, within reason, is worth the time and money.

I hope that I was able to help.
LisaR

BobF

02:43AM | 02/19/99
Lefty,

Unless there is major damage, you will lose money on any home improvement. Don't worry about recouping xx%.

Do what would help you and your family enjoy the house more and that fits in the budget. For example, say a bathroom upgrade will recoup more than a kitchen upgrade. Yet, you need/want a kitchen upgrade more. Then do the kitchen instead of the bath.

A home is more than a house and dollars.

dudleydoright

03:19AM | 02/28/99
I recently remodeled 50% of a 97+ year old house. The results were great but on resale I had worked for approx. 28 cents an hour. If you are the practical minded sort and tend to look down the road a piece, check with state and national home remodelers associations for the FACTS and payback dollars info. A few years ago (AFTER starting my MBR/Suite project) I learned (1)national averages show that remodeling a kitchen is the ONLY project that translates into more dollars at resale and (2) many alterations negatively affect the "feel" of the house and conflict with the original style unless you hire a competent architect. Even if you do all/most of the work yourself, it's still a huge pain in the _____ that often threatens the best of marriages (assuming you will live in the house and remodel simultaneously. Don't intend to be totally negative on major remodelling especially if you are planning on living in the house forever, but I would't even consider it without some reasonable assurance of a payback.

Calene

09:53AM | 02/28/99
I wouldn't think of trying to recoup your cost unless you plan on living in the house another 20 years. You're talking about a prety expensive addition. Generally, if the cost of your remodel project is more the 60% of the cost of your home chances are you wont recoup much. Time is the factor here. Real Estate market is another factor, and AREA. I know in my neighborhood here in Maine putting on an addition is not in the cards for me. That would be a huge loss for me. I have heard that with a kitchen remodel you can up generally add anywhere from 30-40% to the resale value of your home. Bathroom remodels are around 20-30%. Most people are interested in functional kitchens and bathrooms not glamorous bedrooms unless yours are very basic and need some oomph. Good luck!!

Lefty

05:00AM | 03/09/99
Thank you all for your thoughtful and meaningful responses. They have really helped me firm up my thinking (just add the second bath and remodel the kitchen). By scanning the neighborhood, I was able to find two homes with similar designs as mine. Asking the current owners about additions they had made (or had been made by previous owners) revealed some horror stories and pretty much proved the wisdom of the cautionary comments made in this thread. I am SO glad that I asked. Thanks again for your time and insights.

Lefty

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