How Much Value Would an In-Law Suite or Guest House Add to a Home?
A space referred to as a mother-in-law suite or an in-law apartment, also called a guest suite or attached apartment, gives your home extra living quarters most commonly as an attachment to the house, or addition over a garage. Occasionally you will find a separate dwelling on the property more commonly referred to as a guest house. A unit like this can increase the value of your home if it fits in nicely with the home's original architecture and has comfortable separate access. An in-law suite must complement the home to add value.
Home Buyers Desire Extra Space
Home buyers were willing to pay extra for a basement and an in-law suite, according to a survey of more than 2,000 households by the National Association of Realtors between 2010 and 2012. The survey reveals 20 percent of the buyers would pay nearly $3,000 more for an in-law addition.
Multi-Generational Homes
In-law additions are on the rise because of changes in family dynamics, the aging population and interest in multi-generational homes. Many home buyers look for homes that could include rooms for their parents as a way to have in-home daycare, give their parents a seasonal home and/or avoid assisted living facilities as their parents age. The idea of cohabbitation of families has been on the rise in recent years.
Income Potential
An in-law apartment doesn’t necessarily have to be for relatives. In order to make the home attractive to renters and prospective home buyers, the suite should have the ability to be closed and locked to the rest of the home for privacy and should truly function as an independent space with kitchen and bathroom facilities. Easy accessibility to the separate unit, as well as handicapped accessibility, improves the function of the independent living space and increases the value.
Cautionary Reminders
The resale value of your home depends on economic and real estate market conditions. According to the Remodeling 2017 Cost vs. Value Report (www.costvsvalue.com) a two-story addition recouped 68.1% of the cost in resale and adding a bathroom recouped 45.6% of the cost upon resale.
When the addition works aesthetically and functionally with the rest of the home, it can improve the building’s appearance and flow. Careful design to ensure the new space doesn't look or feel awkward is VERY important.
Check with your city codes before getting bids or staring the project and be sure all the proper permits are obtained for the addition. Some cities also require special permits and have design requirements if you plan to use this space as a rental.
There will be on-going expenses in addition to the build cost. You'll want to estimate utility expenses, maintenance costs and contact your insurance company.
If you are converting an existing space, make sure that it also can be easily converted back or truly works independently to ensure you are adding value and not turning buyers off.
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