WHEN Christy Cleveland and her family outgrew their 1,800-square-foot ranch house in Long Beach two years ago, they first considered trading up. Additional expense: $400,000 to $500,000.
They next looked at adding a second floor. Estimated cost: $200,000.
Ultimately, they decided to add a rec room and extra bath at the back of the garage. Cost: $40,000.
Now not only do the family's three boys have enough space to play video and computer games with their friends, but the Clevelands are looking at a high return on their modest investment at resale.
By visiting several neighborhood open houses well before the demo crew showed up, Cleveland learned that the market value of their pre-renovation home was about $800,000. Properties comparable to their 2,300-square-foot house today sell for up to $1.2 million.
Although most home-improvement projects are a quest to satisfy personal needs and desires, experts urge remodelers to consider resale value if there's a chance they may move within a few years.
Determining how much any project will affect home value is inexact at best with appreciation already at a healthy clip in Southern California. Variables such as neighborhood standards, the condition of the rest of the house and the quality of the work will all play a role.
Still, square footage in the form of a den, bigger kitchen, additional bathroom or bedroom is the most direct way to add to a house's resale price, said Hugh Evans, a real estate agent with Prudential California Realty John Aaroe Division in Brentwood.
To get an idea whether adding size makes sense, compare the square-foot cost of adding on with the sales price per square foot of homes in the area. The type and quality of the project will determine the construction costs, which Evans said could range from $250 to $350 a square foot.
"If your building costs are $300 a square foot, it's worth it to add on," Evans said of most neighborhoods. "Especially on the Westside, where space is selling for $750 a square foot."
Some general guidelines for those planning to sell within a year are provided in Remodeling magazine's annual survey of construction costs versus resale value, released last month.
In the Los Angeles metropolitan area, for example, minor kitchen remodels, major kitchen remodels and bathroom remodels reap first, second and third in percentage of costs recovered at 120.2%, 117.8% and 115.5%, respectively. Complete results of the 2005 survey are available at www.remodelingmagazine.com.
