Enjoy More Space With A Home Addition
Building an addition for your home is a great idea if you need more space, especially if you purchased your house years ago and have a lot of equity in your home because to purchase a NEW house of your dreams may actually cost you a lot more than what adding extra space through a home addition would cost.
Why choose to do a home addition?
A home addition means you’re adding extra square footage to your home. Essentially, you’re expanding your home, either upwards or outwards. And there are countless reasons why you’d want to invest in a home addition over any other kind of renovation.
Some of the more popular reasons why you’d like to add square footage to your home are:
- You’re spending more of your spare time at home
- Your family is growing in size
- You’ve begun working from home
- You have in-laws that are going to move in permanently
- You’d like to have a semi-detached rental unit as an income-generating property
- You’ve outgrown your home, and you just want more space
Here Are The 2 BEST Reasons To Invest In A Home Addition
1- It’s entirely your creation. Building an addition is like designing a whole new house without the expense of a whole new house. Few renovation projects are as thrilling and creatively satisfying as working with the blank slate that a home addition offers.
2- A home addition has the potential to provide you with the best return-on-investment (ROI) than any other home renovation. This is because adding extra square footage to your home typically adds more value than room renovations. Understandably then, additions are usually much more costly than renovations.
Best Bang for Your Buck: Home Addition vs. Home Renovation
Between 2019 and 2022, the majority of people who renovated their homes did it to improve their living situation, superseding financial gain as the previous driving factor. However, according to a survey conducted on behalf of RE/MAX Canada, despite the trend of home renovations done for personal use and enjoyment, 59% of Canadians still considered what their return on investment would be.
In short, both enjoyment and resale value matter.
A home addition adds livable square footage to your home and is usable all year round (a porch doesn’t count). Additions usually increase the value of your home more than renovations, because you are physically making your house bigger, and everyone likes more space
A renovation refers to updating or repairing an already-existing space and does not add square footage to your home. Turning your unfinished basement into an entertainment room or building an outdoor deck are both considered renovations. They’ll likely also increase the value of your home, but at a lesser amount than an addition.
So why does adding more square footage to your home increase its value more than renovating an existing space?
Adding square footage is adding actual livable space. And adding more livable space will always be more valuable than simply changing the look of a room. While both an addition and a renovation will make your home more appealing, and both will increase its functionality, only one actually makes your home bigger. And more space equals higher resale value.
Renovating Your Basement vs. Adding a Room Above Your Garage
You’re trying to add more livable space to your house AND increase its value. So, which renovation holds the biggest bang for your buck? Let’s look at an example.
Renovating an unfinished basement is a popular option. The space is already there, it’s just a matter of making it a functional, fun, and cozy place to hang out. But renovating a basement does not add square footage to your home.
So, if you’re looking to increase the resale value of your home at the same time as adding more livable space, building an additional room above the garage is worth some serious thought. It may be a more expensive investment, but it will add additional square footage to your home and will increase your home’s value significantly more than renovating the basement.
6 Popular Home Additions
- Expanding an existing room (ie: kitchen, dining room or family room)
- Bump-outs to existing rooms (ie: adding a walk-in closet to a bedroom, adding a mudroom to a front entry, adding a pantry to a kitchen, adding a fireplace or bay window to a living room)
- A 4-seasons sunroom
- An extra room above the garage (ie: guest bedroom, playroom, office)
- A full second story
- An in-law suite or rental unit complete with bedroom, bathroom, kitchenette, living room, and laundry
Important Considerations For Your Home Addition
Properly Prepare for the Construction Process
Having work crews in your house five to six days a week; noise and dust; constantly dealing with the contractor rather than with each other; lack of privacy; and the ultimate relationship stressor… money worries.
Our best advice, if possible, consider living somewhere else during the construction phase.
Really understand what you hope to achieve with your addition
More space, more privacy, more functionality, more uniqueness, higher resale value, etc etc etc. Dig deep with your reasons for investing in a home addition, and make sure to communicate this with everyone involved in the project: spouse, other family members, contractors, appraiser, neighbours, etc.
Get your home appraised before and after the home addition
If you decide to go ahead with a major home addition, like an extra room, a complete stand-alone suite, or an entire second floor, consider having your home appraised before and after the addition. You’ll undoubtedly find it helpful to know what kind of value the addition has added to your house.
Learn more about home additions in our full blog, including advice from a mortgage broker and real life case study.
- Home additions are usually more costly than renovations, but they can significantly increase the value of your home more than a renovation.
- There are all kinds of additions that add extra space (square footage) to your home: big and small.
- The construction process that comes with a large-scale home addition is very invasive to your personal living space, so consider living somewhere else during the construction phase.
- If your home addition is a huge investment, have your house appraised before and after to get a sense of the increase in value.
- Mortgage debt is still a good kind of debt, so consider refinancing your home to pay for your addition.
- Don’t invest in a home addition just because of the potential resale value. You want the addition to be a space you and your family will get to enjoy as well.