Tuesday, February 9, 2010

Home Office: Return on Investment

A home office adds to comfort, convenience, and salability, but isn’t among the top projects for adding home value.
If you’re one of the more than 20% of Americans who do some or all of their work at home, a comfortable, functional home office is a must-have. And it’s a feature that’s growing in popularity: When the National Association of Home Builders asked builders, manufacturers, and marketing experts what features would be important to future home buyers, 94% said a home office would be “critical” or “very critical.”

Still, when it comes to adding value, a home office ranks last among the 21 midrange projects analyzed in Remodeling Magazine’s annual Cost vs. Value report. Converting a 12-by-12-foot bedroom into an office costs a national average of $28,375 and recoups $13,648 at resale, for a 48% return on investment, according to the 2009-2010 report. Construction costs include custom cabinetry and work surface, wall-mounted storage, a wiring upgrade, and new floor and wall finishes.

Regionally, returns varied only slightly, with the highest rate of return, 56%, in the Pacific region, and the lowest, 41%, in the upper Midwest.

National average cost to convert an existing 12 x 12 room into a home office:

Job cost: $28,375

Resale value: $13,648

Cost recoup: 48.1%

No comments: