Does Adding Square Footage Give You the Best ROI when You Sell?

Paige Yates  |  October 1, 2023

Does Adding Square Footage Give You the Best ROI when You Sell?

If you want to maximize your home's value before selling, adding more square footage is one of the most appealing options. Who doesn’t want an extra bedroom or larger kitchen? 

But does extra space actually give you the biggest bang for your buck?


Square Footage Additions Can Pay Off

In general, adding livable areas increases value. According to the National Association of Realtors, every 1,000 square feet added can boost value by over 30%. 

Extra bedrooms and bathrooms in particular, bring high returns. By adding functionality, they make the house function better for buyers. Going from 2 to 3 bedrooms opens your home to more families. An additional bathroom prevents early morning congestion.

But your current home size matters. A modest 2-bedroom house has much more to gain from a master suite than an already spacious 4,000-square-foot house. You want the addition to solve a deficiency, not just add excess space.

A quality addition can certainly pay for itself upon sale as long as it increases functionality and helps create demand with buyers. 


At Some Point, Bigger Isn't Always Better  

At a certain point, extra space provides diminishing returns. If your home already has 4+ bedrooms, another room may not add that much value. And after three bathrooms, more doesn’t necessarily add appeal to most buying parties (unless you’re targeting the luxury market).

Luxury additions like home theaters and wine cellars can be nice perks. But they may not translate to a much higher sale price. Furthermore, an in-ground pool in a neighborhood where pools are uncommon due to the cool climate, long winters, or lack of space is unlikely to increase the sales price.                                        

Listen to what your home needs, not just what you want. Target additions that increase functionality without overbuilding. Focus on quality over maximum square footage.


Other Smart Investments

While space additions can provide ROI, other renovations can add value to your home. If you want to increase the value of your home without increasing square footage, consider the following: 

  • Kitchen Overhauls

Renovating or upgrading the kitchen can yield a 67% return on investment, with high-quality materials being essential.

  • Curb Appeal Projects

Installing a new roof has a return of 105%, siding at 93%, and a front door at 97%. However, if you're on a budget, simple fixes like adding new hardware and colorful flowers can attract buyers.

  • Upgrading Systems

Electrical, plumbing, and HVAC upgrades yield an average return of 71% for HVAC and 93% for electrical panel upgrades. Adding attic insulation provides a substantial 117% return. While these upgrades don’t improve appearance they do have considerable impact on resale value.

  • Outdoor Additions

Outdoor living spaces are very desirable to buyers. A wood deck offers an 87% return on investment, while sunrooms have slightly lower returns. Consider the broad appeal of your outdoor renovation.

  • Quality Staging

If your primary goal is just to quickly increase the sale price of your home, consider staging. Staged homes sell 79% faster, making it a worthwhile investment to help buyers envision themselves in the space.


So, while square footage additions can have excellent ROI, carefully weigh other options for maximizing your home's sale price. Listen to what your home truly needs and focus on quality over quantity.

Do you want a professional opinion on how to best increase the value of your home? Get it touch with the Yates Team. 

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