Besides providing your home with more living space, building a home addition can be a terrific investment. However, before embarking on building a home addition the homeowner should first consider several important items. These items include: home market values in the neighborhood, financing, home addition costs, home addition plans (size and scale of project), architecture, timetable for completion, personal disruption and inconvenience threshold and the sweat equity commitment level.
Size of Home Addition and Market Value
Prior to actually breaking ground on building a home addition, it is best to first have a plan. You need to determine what you are looking for 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 value and the new and improved home market value. This difference should represent the maximum cost 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.
The next important question involves how to fund the cost of the home addition. Unless the project is being funded via cash/savings then financing will be required. If current mortgage rates are higher than the existing mortgage, then a home equity loan will probably make the most sense. If current mortgage rates are lower than the existing mortgage, then refinancing the entire home, including the cost of the home addition project, may make the most sense.
Architectural Considerations when Building a Home Addition
Once the financial items have been addressed it is then time to focus on the size and scale of the project, as well as the architectural and aesthetics of the new addition. The home addition should be of size and scale such that it aesthetically melds into the original house. It should not be too small or too big. Frequently, homeowners get carried away and add large amounts of new living space without sufficient thought on the outside appearance. From a market value, there is more to a home than just pure living space. A home needs to maintain its exterior aesthetics as well. It is important to consider such items as siding, doors, windows, rooflines, and elevations. All should meld into the existing home exterior seamlessly and aesthetically.
If an architect is not planned for the project, then the homeowner should at least make some sketches of the home exterior with the new home addition. The building inspector will probably require them anyways during the permit process. Also, there are many Home Design software packages on the market today that can help create such drawings.
Schedule and Sweat Equity Commitment
The next two items that should be considered include the timetable for completing the home addition project and the homeowner sweaty equity commitment level. Many homeowners assume they can do a lot more than they are either skilled to do or have the time to do. From personal experience, I would suggest contracting out the site/ground work, rough framing, roofing, siding, heating/cooling, and the drywall. All of these tasks require skill, time and brawn. If local laws permit, electric and plumbing may be tackled by the homeowner. However, both require skill and can be life threatening if not performed properly. Other tasks that a homeowner could tackle when building a home addition include installing interior doors, finish trim, painting, cabinet installation, tiling and hardwood flooring. Prior to a homeowner signing up to any specific task however, they should first honestly assess their skill and available time, and compare them to their project schedule. If they don’t match, hire the contractor.
Threshold of Inconvenience and Disruption
Finally, a homeowner should consider their threshold for inconvenience and disruption. Building a home addition, particularly if it involves the kitchen, is very disruptive to today’s busy lifestyles. It is also a dusty, dirty and noisy endeavor. In addition, dealing with subcontractors can be challenging at times. For a typical addition anticipate several months of effort and inconvenience.