How does a home addition increase property value in Lake Oswego?

When planning a home addition, most homeowners are wondering, “is it worth it?” The truth is, you have to gather a lot of information before you can answer that question. So let’s get into it. 

Do home additions add value to the property?

Typically, yes. However, increased value doesn’t mean a return on your investment is guaranteed. Quality, smart spending, and the type of home extension you’re considering all impact not only the final cost of your renovation, but the ROI too. You can expect to recoup anywhere from 22-50% of your investment with an extension. 

For consideration: Remember, higher value properties come with higher property taxes; something else to think about when considering whether to renovate your Lake Oswego property.

Home extension costs vary across the country, but according to Cost vs. Value, most fall in the ballpark of $50,000-$325,000*. You can learn more about how much it costs to build a home extension here, or get in touch with a Lake Oswego Remodeling Consultant to discuss your specific project. 

Dos and don'ts of home extensions

Best ways to add value to your home 

Universally functional rooms are the way to go. Everyone can use bedrooms and extra living space like kitchens, dens, and lounges. Building an extension that could be used as an income generating rental unit is another sure fire way to add value to your home. Even if you don’t want to be a landlord, you can host guests, and it always leaves the potential available for the next owner. 

New home upgrades to avoid

If your eventual goal is to sell your property for a profit, avoid improvements that are too niche or personal. Home theaters, hot tubs, and sunrooms are fantastic ways to upgrade your forever home, but these rooms rarely find their way onto potential buyers’ lists of “must-haves” and aren’t the best ways to utilize a home extension. 

Overinvesting and over-improvement – is that a thing?

Yes! Overinvesting happens when you put too much capital into a renovation to realistically achieve a return. This is less of an issue when it comes to renovating your forever home. Extensions add value in more ways than one, and in the case of making your family’s daily life more comfortable and functional, that is more valuable than a high resale price. 

Overinvesting becomes a problem when reselling is the motivation behind your project. Working with a renovation professional to plan for the future is an easy way to mitigate your overinvestment risk. 

Over-improving your property

Have you ever heard a real estate agent refer to “comps” in the area? That means comparable properties, which are used in part to assess property value and establish a consistent local market. Here’s an example:

Let’s say homes in your neighborhood are 1,500ft². If you build a two-story home extension that brings your total square footage to 2,500, your house will not only be considerably larger than the rest, it will easily become the most expensive on the block. That might seem like a good thing, but just because a home may be “worth” a certain amount on paper, doesn’t mean people will be willing to pay that price in real life. No one wants to buy the most expensive home in the neighborhood. Other properties are more likely to benefit from your newly renovated home than you are.

For illustrative purposes only.

Is it more affordable to build a first floor extension or second storey addition?

As is true with anything cost related, it depends! If both options are completed to the same standard, using identical materials and design plans, then the second storey addition will be more extensive due to structural needs. Building up (as opposed to out) requires additional engineering expertise, permits, and specialists like roofers. But that’s not to say it always costs more. 

If you’re unsure of what type of extension is best for your budget and lifestyle, consult with a renovation professional to weigh your options. 

Looking to upgrade your house? 

If you want to find out how much value a home addition could add to your property, get in touch with our local Remodeling Consultants in Lake Oswego. With a free consultation, we can advise you on how best to upgrade your home.