Homeowners should consider several questions before making a choice between adding on to an existing home or moving up in the market to a bigger house.
- How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
- How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
- What do local zoning and building ordinances permit?
- How much equity already exists in the property?
- Are there affordable properties for sale that would satisfy housing needs?
Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value. According to the "Cost vs.Value Report, published annually by Remodeling Magazine, remodeling a home not only improves its livability but its curb appeal with potential buyers.
Among the hottest improvement projects in 1995 were updated kitchens and baths, home-office additions and more amenities in older homes in order to compete with new homes on the market.
The highest paybacks come from the latter projects, according to the magazine's 1995-96 survey of more than 300 real estate professionals. "The resale market is tough right now and you need to give your home every competitive advantage you can, one agent said. While home offices are a relatively new remodeling trend, adding one to a house recoups 58 percent of the costs, according to the survey.