How to Determine the ROI on Additions

Answered by Brendan ~ February 26, 2010 ~ Comments

I am considering some additions in my Atlanta home: a third bathroom, enlarged kitchen, and home office. How do I determine the probable cost and the return on my investment when I resell?

Harry H. ~ Atlanta, Georgia

Brendan Fowler

If you want to determine the cost of these projects, you will need to have a very detailed set of plans. Without a really good set of plans, you are only going to get a price range for the cost of the project.

Typically kitchens and bathrooms add the most value to your home. To determine the ROI, you will have to do some research in your area, looking at recent home sales and what homes are selling for per square foot.

There are no hard rules here, investing in your home does not always provided a return on the investment. It is always a little bit of a gamble, look at the cost of the project and what you would have to sell your home for in order to make your money back. The devil is in the details here.

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