You can improve your home in a number of ways, such as adding an addition, which is a fantastic way to to improve your home both in size and functionality. But building on a new addition can be a lengthy and expensive process. Contractors, materials, fees, codes, inspections, delays, and more could cause your great idea to quickly become a memory of the past if you aren’t prepared.
|Increase Market Value
|Project Materials Go Over Budget
|Add Rental Property
|Making Your Space Personal
Before you start your home addition project, it will be crucial that you understand all the benefits and potential problems you could run into and how you can deal with these problems. Read on to learn the best way to build an addition to your home.
Pros Of Home Addition In The Bay Area
Increase The Market Value
One of the major reasons people here in the bay area add an addition to their home is to eventually increase the selling price. Home additions can cost as much as $300 per square foot, depending on the type of home addition you are looking to invest in.
Additions to homes in The Bay Area can be seen as an improvement to the entire property and the added square footage will increase the value of your home if you eventually decide to sell or refinance.
But choosing the exact addition to your home that will increase the market value can be tricky. Some home additions will increase the overall value more than others.
It’s possible that by adding on more rooms to your home that you can actually decrease the market value due to increased utility and maintenance bills.
But trends show that The Bay Area, in general, is enjoying a surge in value, up 19% in August compared to previous years and almost reaching the all-time high of 2018. Compare this to neighboring Las Vegas, which is projected by CoreLogic to fall 6.5% by August of the coming year.
Make sure to consult your real estate agent and contractor to get a professional opinion on which additions may be more beneficial to your neighborhood and the homes that have been selling in that area.
One of the most in demand home additions is completing a facelift for the front of the house by adding stone veneer to any existing vinyl siding. This project could cost $9,537 on average but has the potential to recoup up to 96%.
A wooden deck addition built on the back of your home typically recoups 89% of the investment. Home additions in the bay area, compared to the rest of the country, will typically have higher initial costs, but they also have higher returns.
Turn Your Home Addition Into Rental Property
Adding on additional space to your home could potentially mean that you have an extra source of revenue coming in every month. Many private rooms in The Bay Area on Airbnb range anywhere from $40 to $200. Detached rentals, like a converted detached garage or garden home can bring in much more.
This means that every month when someone rents out the spare bedroom in your home you will receive extra income. Homeowners all over the country are taking advantage by breaking ground on extra room additions and renovating existing spaces to accommodate travelers.
So not only could you potentially raise the market value of your home by adding on a new room or renovating an existing space, but you can immediately start making your money back by offering your new addition for rent.
For those interested in flipping their home, this is a common strategy to see a return from the large investment it can take to build an addition.
In The Bay Area, prices on luxury homes are increasing substantially this year, leading to up to 19% increases across the region. This includes counties San Mateo, Santa Clara, Contra Costa, and Alameda.
If you are worried about how this might affect your family and current living situation, you can always look into building a separate entrance for the addition so that any travelers who have rented the space do not have to enter your home.
Make The Home Addition Personal
Another benefit of adding an addition to your Bay Area home is that this will become your personal touch on the property.
Many homeowners do not get the opportunity to have their home built from the ground up but instead will purchase an already built home. This means that your pre-existing home can be a mashup of all the previous owner’s ideas and additions that you now have to live with.
Below are a few ways you can add a personal touch to your home without investing in a new addition.
- Add New Floors
Full control over the direction and style of your addition will make your home start to feel like your own. And you don’t have to put in the cost of building an entirely new home from the ground up.
Better Than Moving!
The cost of moving into a new home far outweighs any cost associated with adding on an addition to your current home. Most new homeowners in San Francisco are looking at a price tag of around $1.6 million.
If you need more space for your growing family and you are looking at some different homes that might accommodate everyone, it might make more sense to look at building an addition rather than purchasing a new home.
By partnering up with the right contractor, you can talk about details in what the cost associated with additions to your home will be and how long it will take. Chances are, these estimates will be much lower than any new home you would be considering.
Cons Of Home Addition In Bay Area
With all the fantastic benefits you could receive from adding on a new room to your home, it can be easy to look over any potential pitfalls.
Project Materials Go Over Budget
If this is your first time building an addition to your Bay Area home, then you will almost certainly go over budget. This is because the amount of information and detail needed to remain on schedule and under budget is more than the average homeowner is aware of.
It’s going to be easy to go over budget on materials, especially if you haven’t done your homework ahead of time. You need to make sure you have an extensive list of items you believe you will need to purchase to complete your addition.
Then, head to your local hardware store and start pricing out all of the items you have listed. Once you have this estimation in place, it will be much easier to talk with your contractor to decide on what the final price is going to be.
Getting as granular as possible with these details could save you thousands in the long run. Knowing the exact dimensions of all your materials, quantity, and brand that you are looking to buy is going to be tremendously helpful when talking with your contractor.
Add on an extra 10% as a contingency for your overall estimates. It’s also going to give you the information you need to come as close as you can to knowing the price of your materials.
Contractor Underbidding Could Actually Inflate Cost
There is a whole section for potential contractor issues you could face, but it’s important to get everything in writing and the document signed before starting any work.
Contractors can use a method called underbidding to get more out of your pocketbook than you originally discussed. The most common way they will do this is by quoting a very small number in your original negotiation in order to win the project from competitors.
Then, midway through the project, they will claim they ran into unforeseen problems in the project and will request an additional amount of money from you to finish.
The fact is that they already knew about this additional cost but didn’t want to project to seem expensive when you started talking. This is why it is important to work with reputable contractors who have a very public track record of quality service.
Severe Delays Will Lengthen Process
Even if you have a very good relationship with your contractor and have established very realistic timelines and financial expectations, the fact of the matter is that sometimes accidents happen that cause delays.
Here are some of the most common delays:
- Lead time miscalculated
- City codes and inspections
- Changes in plans
It may be that when the workers were taking down a wall, they found some pipes that were not installed properly, and these need to be fixed before they can continue.
Maybe there were important underground cable lines that weren’t showing on the initial plans, but now you have to contact the city to figure it out.
Whatever the case may be, delays in the process of adding an addition to your bay area home are quite normal and happen on almost every project.
To make sure your project is going as close to your plan as possible, communicate with your contractor regularly, and don’t be afraid to become overly invested in the success of the project. Make sure you always reference the completion date as a basis for moving forward.
Dealing with Unreliable Contractors
Underbidding and charging up the price at a later date is one-way contractors can take advantage of your home addition if you aren’t careful, but it isn’t the only way. Read below to find out a couple more potential problems you could face with your contractor.
Consistently Late Contractors
Contractors can be notorious for showing up late to job sites. They will tell you to expect them around 9:00 a.m. and show up at 11:30 a.m. because they were at another site that took longer than they expected.
The truth is that some contractors are working on more jobs than they can really take care of properly. They don’t want to lose business, so they are always trying to win more projects but don’t have the staff to keep up with all the work.
If you are running into this issue, the first step you can take is to simply talk with your contractor to see if something can be worked out. Chances are the contractor does not want to upset you or show up late, but they truly are busy.
What you can do to avoid this problem altogether is include in your contract language that states the project can be canceled due to excessive lateness. This will create a legal reason for your contractor to show up and respect your time.
Contractors Who Quit Mid-Job
It isn’t unheard of for a contractor to end up canceling the project while you are in the middle of putting up drywall in an extra room. This does not happen often and should be seen as a worst-case scenario, but it’s always good to be prepared.
When you are researching which contractors to employ before you start your addition, it is always recommended to have a list of 3-5 different contractors that you would consider for the job.
Reach out to all of them to start a dialogue and establish some kind of relationship so that if you need to contact them in the future it doesn’t have to feel like it’s out of the blue.
If something doesn’t work out with your main choice, you can always reference this list and contact those individuals again to see if they can pick up where the other left off.
Dealing with Codes and Inspections
If you are going to be adding any of the options below in your home addition, you will need to start pulling your permits. These options include:
Smaller tasks like paint jobs or changing out appliances won’t need that level of permission, but you want to make sure if you add an addition to your home, it is completely legal and following any city and state codes.
You don’t want to complete the addition only to find out that it does not comply with the city codes, and you will either have to make an expensive modification or start completely over.
For a full list of codes and regulations in The Bay Area, use the Department of Building Inspection’s website.
Historical Homes and City Delays
One of the most common issues with homes in The Bay Area is their historical significance. Many of the homes are protected under city codes, and you will need to consult with your contractor on the exact type of addition you can make to your home.
There could be some potential delays in your project because it can take time when dealing with the city to get responses and verification, but this is part of the process. Leave extra time if you are contacting them anytime around the holidays.
Minimizing Your Property Space
It makes sense that whenever you are adding on to your existing home that you are taking away open space from your property that you cannot use for a new garden or a pool or other features.
Smaller additions like bathrooms could be as small as 10×10, but larger rooms like a master suit could be as large as 20×20. But there are ways you can still have the home addition without needing to reshape your property.
In order to avoid taking up valuable property space while still increasing your square footage, consider the following additions.
- Room over the garage
- Adding a second story to your home
- Converting your garage into a living space
- Converting your garden shed to a cute garden cottage
Finding An Alternative Place To Stay
It’s common when making an addition to your home in The Bay Area that you will have to find a place to stay for a few nights, if not longer.
Depending on the type of addition you are going to make, the construction crew may need to turn off your water or electricity for a few days to complete their work. This means you will have to find a place to stay.
Sometimes, not often, these jobs can last longer than anticipated and what was originally only a week turns into a month of needing to stay at a hotel or friend’s home.
Rental rooms in the bay area can start at $90 a night and will not accommodate a family. Hotel rooms can be even pricier and start at $120 a night. When starting your home addition project, make a budget for these unforeseen expenses to avoid potential emergencies in the future.
Additions to your Bay Area home can increase the market value, bring in additional revenue, and allow you to put your personal touch on your home. But that doesn’t mean the process will be free from problems. You will need to consider costs going over budget, long delays, untrustworthy contractors, and city regulations. As long as you inform yourself of the potential pitfalls and strategize accordingly, you should have a great addition to your home this next year.
If you want to learn more about home additions in The Bay Area, you can contact Element Home Remodeling for a free consultation.
- Understanding California’s New ADU Laws (October 2023) : A Look into AB 1033 and What It Means for Bay Area Homeowners - October 26, 2023
- Bay Area Homeowners: Elevating Your Home with These Second Story Room Additions Ideas - October 5, 2023
- Family Harmony: Your Guide to Building an In-law Suite in the Bay Area - October 5, 2023