Value of Adding a Bedroom

[Kevin Dunlop]

Does anybody have experience with adding on bedrooms? This is not the sole renovation I am planning, but I was wondering what kind of ROI I could expect. Obviously comparable homes in the area and different variable costs will drastically change this, but I mainly want to know if this is something I should even be considering. Thanks in advance for the insight!

[Lawrence Dy]

Determining the ROI can vary greatly without knowing all the details of your property. Generally speaking, adding bedrooms is an excellent renovation and something we've found to be very profitable in the past. But it depends which route you are going.

There are various ways to do it like sectioning off part of the existing sq footage to convert into a bedroom (i.e. dining room, den, or office). This is our favorite approach as it is the lowest cost and generally has the best ROI. The other approach is new construction where you actually add the the home from the ground up. To determine if this makes sense for you, you need to assess several things:

1) The cost of permitting and construction. Also, will this cost be cash or financed? This can impact the ROI figures.

2) What is the potential increase of rental income for this extra bedroom. This will vary greatly depending on your rental strategy, what the current home size is, and what is the expectation of renters in the area etc.

Ultimately, you can determine your own ROI after doing serious research on construction costs and potential rental income. Hopes this helps!