Evaluate Your House for a Bathroom Addition

If you can afford the $50,000 price tag, a bathroom addition is a reasonable investment, although your new bathroom will recover only about 52% of your initial investment at resale, according to the “2015 Remodeling Impact Report” from the NATIONAL ASSOCIATION OF REALTORS®.

Nevertheless, you’ll probably give yourself a well-deserved pat on the back. In fact, a bath addition gets a perfect Joy Score of 10 — a rating based on homeowners who said they were happy or satisfied with their project, with 10 being the highest rating and 1 the lowest.

But there are some important considerations you should make before you take the plunge, especially if you know you’ll be selling the house in the near future.

Adding Home Value

The good news is that buyers love bathrooms. “You can almost never go wrong adding a bathroom,” says Tucson builder Greg Miedema, former chairman of the National Association of Home Builders (NAHB) Remodelers. “We never hear someone say, ‘I have way too much bathroom space — could you turn one of mine into a closet?'”

But if you’re looking to recoup the cost through resale of the home, or improve your prospects of selling, do your homework carefully, says certified appraiser Melanie J. McLane of Jersey Shore, Pa. “Say you have an older row house that sells for $70,000 on a good day,” she says. “If you add a $30,000 bath to that house, you’re not going to have a $100,000 house. You’re going to have a $70,000 house with a really expensive bathroom.”

A general rule of thumb is that you should only undertake a major remodeling project if you plan to stay in your home at least five years. Each situation depends on the local market, McLane says.

Here’s how to evaluate your potential return:

Is Your House Balanced?

Buyers tend to prefer that the number of bathrooms roughly equal the number of bedrooms, according to the NAHB. Additions that bring bathrooms in line with bedrooms will likely return a bigger portion of their investment.

The most valuable bathroom addition you can make is when you start with only one bath in the house — a second bath makes a good impression on buyers and can be the difference between selling a house and having it remain on the market.

Another important area of balance is showers vs. tubs. For maximum resale potential, you need one of each in your house — young children need a tub for bath time, and aging buyers (including the massive Baby Boomers market) often prefer a shower when stepping in and out of a slippery tub becomes less appealing. An addition that gives you the shower or tub you’re lacking is a smart choice.

Full vs. Half Baths

Both Miedema and McLane suggest adding a full bath (or a 3/4 bath, which has a shower stall) rather than a half. “If I’m going to go to the trouble and expense of getting carpenters and plumbers in there, I’m adding at least a shower stall,” McLane says.

NAHB data suggest that an additional half bath increases a home’s value by 10.5%, but an additional full bath increases the value by 20%. However, that doesn’t mean you’ll recover the total cost of your remodeling investment. You’ll likely get back only about 52% of the cost of a bathroom addition project when you sell your home.

Sizing Up Your Neighborhood

Because national percentages on return of investment can’t capture all the variables that affect your home’s value, it’s best to call a REALTOR® or appraiser to see if your neighborhood can support an increase in value. “If your house is already one of the nicest in your neighborhood, think long and hard before you add a $40,000 bath,” McLane says. “You may be facing diminishing returns.”

It’s also critical to find out what buyer expectations are for a home of your size in your particular location if you know you’re planning to sell within a few years. Features you think will be attractive to buyers may or may not make a real difference — only a REALTOR® or appraiser can tell you whether buyers looking in your neighborhood are appreciably interested in, say, a jetted tub in the master bathroom. Consider expensive upgrades only if they’re important to you personally.

Weighing Intangibles

If your unhappy family is standing in line to share a bathroom, or if you’ve always dreamed of relaxing in a jetted tub, you may not care about recouping the full cost of an addition. “Only the homeowner can decide what the personal satisfaction is worth,” McLane says.

Understanding the implications for your home’s value is important and can keep you from making costly mistakes, but you can’t put a price tag on family harmony.

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These articles are not intended to give legal or tax advice, and you should consult your attorney or financial advisor for additional information.

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