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Bathroom Addition: Return on Investment

Published: February 19, 2010
A new bathroom brings added convenience for your family and can prove to be a valuable asset should you decide to sell your home.

Return on Investement
Depending on the size of your family and the number of existing bathrooms in your house, adding a new bathroom may be one of the best home improvement decisions you´ll make. According to Greg Miedema, chairman of the National Association of Home Builders Remodelers (NAHBR), additional bathrooms are highly desirable features. “You can almost never go wrong adding a bathroom,” says Miedema.
This is especially true if an additional bathroom helps relieve congestion at hectic times, or if it provides much-needed convenience for guests—no small considerations.
As an investment, however, a new bathroom should be carefully considered. The cost of a new bathroom addition ranges from $40,100 to $76,200, but the return on that investment averages a modest 52%, according to Remodeling Magazine´s annual Cost vs. Value Report. That value has been steadily declining over the past several years due to rising construction costs and falling home prices.

Nevertheless, national averages may not be a reliable predictor of value in your particular neighborhood. Before committing to a bathroom addition, call in a real estate agent or professional appraiser to evaluate whether an additional bathroom makes sense in your situation. Buyers tend to prefer houses where the number of bathrooms equals the number of bedrooms, according to the National Association of Home Builders (NAHB).

NAHB data also suggests that an additional half bath may increases a home´s total value by about 10%, while an additional full bath increases the value by 20%. However, that doesn´t mean you´ll recoup the full value of your remodeling investment—on average, you´ll spend almost twice what you recoup.
National and regional data from the Cost vs. Value Report:

National average cost, midrange 6x8-ft. bathroom addition:
Job cost: $40,700
Resale value: $21,700
Cost recoup: 53.3%
National average cost, upscale 10x10-ft. bathroom addition:
Job cost: $78,400
Resale value: $41,600
Cost recoup: 53%
Regional info:
New England

Middle Atlantic

South Atlantic

East South Central

West South Central

East North Central

West North Central



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