How Much Does a New Bathroom Increase the Value of a House?

Written by meggie hardy
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How Much Does a New Bathroom Increase the Value of a House?
(Jeremy Levine Designs: Flickr.com)

When it comes to home value, bathrooms are a commodity. How much adding a new bathroom will increase the value of a house will depend upon a host of factors; similar houses in the neighbourhood, remodelling expenses, the quality of the renovation, market conditions, space and overall condition of the house. All of these will all have an effect on the bottom-line return of a new bathroom.

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Comparables

Neighbourhoods have dollar value that is based on established criteria: square footage, number of bedrooms; number of bathrooms; garages; lot size; and location within the community. They also have a cap (maximum) valuation. Adding a new bath will increase the value only up to the neighbourhood maximum, and if the cost of a new bath bumps up the house price to exceed neighbourhood comparables, there is no monetary value to adding a new bath.

Expense

The dollar, in terms of real estate value, is contingent upon the dollar spent and the dollar owed. A £13,000 pricetag for a bathroom addition for a house that has a mortgaged amount of £65,000, located in a community where houses are selling for £130,000, should see an increased value. Allocating a bathroom renovation budget that doesn't exceed the neighbourhood valuation increases the likelihood of adding value to the house. Additionally, a comparison of a potential listing price without a bathroom renovation, to a listing price with a bathroom renovation, is a good indicator of potential value.

Quality

The old saying "you get what you pay for" is wise advice. Shoddy workmanship and cheap fixtures won't guarantee a maximum return on the dollar spent. Neither will overspending if the rest of the house doesn't match in quality and style. A new bathroom that rivals a Beverly Hills salon won't bring in added dollars if the rest of the house looks like it needs a demolition crew. A new bathroom that is appropriate for the house and the neighbourhood, with quality fixtures and skilled workmanship, will ensure the greatest value.

Space

Tiny, closet-sized bathrooms won't increase the bottom-line value much, if at all. If a bathroom renovation includes taking space from another room in the house, that could be a deterrent in recouping expenses or increasing the value. The best return on the bathroom renovation dollar is adding a structure onto the house; it increases square footage, one of the markers for establishing a listing price.

Market

The best guess for how much a bathroom will increase the value of a house is to know the market. Value in real estate is market-specific. In a bear market, housing prices are plummeting and renovations may not increase the value of the house. In a bull market, house prices are on the rise and the chance of increasing the value is greater. Quoting a fixed-dollar increase of house value based on the addition of a new bathroom is impossible; however, to maximise the value, before adding that new bath, take into consideration all contributing factors that may affect the return on the expenditure and be smart with the budget.

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