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Family Room Addition: Return on Investment

Published: March 18, 2010
A family room addition returns an average of 60.2% of its cost at resale, as long as the improvement is in line with other homes in the neighborhood.

Home Addition
Family room additions can cost considerably less per square foot than bathroom, laundry room, and kitchen additions because they don´t typically involve plumbing fixtures, stone or ceramic tiles, or major appliances.
Still, a sizeable 16-by-25-foot family room addition costs an average of $83,118, according to the 2011-2012 Cost vs. Value Report from Remodeling Magazine. Of that, you can expect to recoup around $50,000 (or about 60%) when you sell the house.

The highest rate of return on a family room addition is in the west-south-central portion of the country. In Dallas, for example, the average investment is $71,642 and the return is $49,771, or about 70%. The lowest payback is in the upper Midwest, where the average cost is $82,931 and the payback is $41,884, for a 50.5% return.

Wherever you live, however, the key to maximizing your return is to avoid over-improving. That means building a family room addition only if neighboring houses of similar style, size, and value tend to have family rooms, says Missoula, Mont., appraiser Bryan Flaherty.

If that´s not the case, there are lower-cost ways to achieve a similar transformation of your house: You could knock down interior walls and convert your dining room into a family room, finish the basement to create a family room, or simply use a spare bedroom or above-the-garage bonus room.

But all of these options require compromises—such as having your family room far from the kitchen or giving up having a formal dining room—that you don´t have to make when you build a family room addition.

And as long as you´re staying put for three to five years to enjoy the new space, you´ll get so much use from your family room addition that recouping every dollar back when you sell shouldn´t be a prime concern.
National average cost, 16-by-25-foot family room addition, with standard appointments:
Job Cost: $83,118
Resale Value: $50,004
Cost Recoup: 60.2%
Regional info:
New England

Middle Atlantic

South Atlantic

East South Central

West South Central

East North Central

West North Central



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