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Is this the end of the home office?

Posted by Woodrow Aames ~ April 17, 2012

More and more Americans are enjoying the benefits of telecommuting. The Telework Research Network estimates that as many as 30 million people work from home at least part of the time. The trend has sparked a boom of home office conversions over the last decade.

But now, sad to say, the distressed housing market has negatively impacted the value of adding a home office. The converted bedroom, den or garage is less attractive to shoppers who want to modify conventional space after they buy the property.

Remodeling ROI plunges for home office conversions

According to finance writer Dana Dratch, "These days, a home office consists of a multiple-choice combination of wireless laptops, smartphones, PDAs and touch-screen tablets. And that worker bee might be toiling anywhere from a home patio or a favorite restaurant to a park bench."

I get it. I have a home office myself, having converted a bedroom for the purpose, but some days I work in coffee shops to fight cabin fever.

Remodeling Magazine's 2011-12 Cost vs. Value Report shows that a typical home office remodel cost $27,963, increased resale value at $11,983, and recouped only 42.9 percent of the investment. The percentage is the lowest ROI among all the projects studied by the researchers. Ouch!

The home office project in the study called for a conversion of a 12-by-12-foot room. Specs were to "install custom cabinets to include 20 linear feet of laminate desktop, computer workstation, and wall cabinet storage. Rewire room for computer, fax machine, and other electronic equipment, as well as cable and telephone lines. Include drywall interior, painted trim, and commercial-grade carpeting."

Remodeling trends change swiftly

In conducting the survey, National Association of Home Builders queried marketing experts, builders and manufacturers which features were essential for "future home buyers". The home office came back with a 94 percent "critical feature" rating. However, that was before respondents knew of the plunge in ROI for conversions.

Ms. Dratch mentions two possible alternatives if you need to convert for office space. First, make sure your converted room can easily be reverted to a den or bedroom. Second, call your home office a "multipurpose room, "hobby room", or "den" - rooms that have a wider, general appeal.

With current trends, it seems a poor choice to convert a garage into a home office. Many home shoppers just won't do without a secure place to park their car and set up a laundry. Advance planning is key to your room addition plans.

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