Choosing to extend the size of your current home via building a home addition is frequently a better decision than selling your home and buying a larger one. In addition to making financial sense, in many cases it also offers other advantages. For example, if you like where you live and/or have children in a school system that they enjoy, building a home addition can preserve these ties.
In addition to providing your house with more living space and saving money, building an addition can also be a terrific investment. However, before starting a large project such as building an addition, it's important that you first consider several factors. These factors include: the size and scale of the home addition, the property market values in the neighborhood, required financing, architecture, timeline for completing the project, and the personal disruption that you and your family are willing to stand.
Before breaking ground on a home addition, you should first determine your specific extra living space needs. For example, what types of room(s) are you looking to add, and how many square feet of space is desired? Once you know what you need for space, it is then critical to find out the market value of houses in your local area with similar features and sizes to your new home plans. With this market analysis you can then determine the market value difference between your current home footprint and your enlarged home footprint. This market value difference should represent the maximum budget for the new home addition if you want to make a positive investment.
The next major issue that needs to be addressed is how to finance the building of a home addition. Unless the project is being funded via your personal savings then financing will be necessary. If current mortgage rates are higher than the existing house loan, then a home equity loan may make more sense. If current mortgage rates are lower than the existing home mortgage, then refinancing the entire home, including the cost of the home addition project, may make better sense.
After addressing the financing of the home addition, the next major item to focus on are the plans. It is important to consider both the size and scale of the addition, as well as the aesthetics and architecture of the new addition. The home addition should be designed such that it melds into the existing home and is aesthetically appealing from the road. It should not be too large or small relative to the original home. Frequently, homeowners build large additions that either dwarf the existing home or look like aberrations cobbled onto the existing home. Home market values are based on more than just living space. Exterior aesthetics play a major role in calculating the home's market value.
It is also important to consider other items such as rooflines, doors, siding, windows, shingles, and height elevations. All should meld into the existing home exterior seamlessly.
If you are not planning to use an architect for designing the new home addition then consider purchasing a home design software package. There are a number of good ones on the market and they can help you in multiple ways. Besides providing you with overall sketches of the existing home and addition, they can provide necessary structural drawings to provide to the building inspector when pulling permits for the project.
The next two important aspects to consider are the timeline for completing the project, and the level of homeowner sweaty equity you are willing to provide. When developing a timeline, plan for delays and contingency plans. Regarding homeowner sweat equity, many homeowners over estimate their skill sets and time commitment. Do not over commit yourself both in time and skill sets. Hire contractors where you lack skills, tools, equipment, and time. Also where you legally can not perform the work, e.g. plumbing and electric, plan on finding licensed contractors. For smaller projects, such as installing interior doors, finish trim, painting, cabinet installation, tiling and hardwood flooring, by all means sign up for these tasks if you have the tools and skills.
Finally, remember that building a home addition is a major undertaking. It is also very disruptive to your home for many months. So before choosing to build a home addition, be prepared for the inconveniences of possibly not having a functional kitchen, contractors walking through your home, and loud noises throughout the day. Building a home addition is also a dusty and dirty endeavor. Finally, dealing with contractors can also be challenging at times.
If after considering all these factors you still want to move forward on building an addition, create your plans, hire your contractors, pull your permits and expect a few bumps along the way. When the project is complete you will have more living space, save money and maintain your home base.