Adding Rooms other than bedrooms and bathrooms?

by Sergey
(Sydney, Australia)

Add a dining room if it adds to the usability of your house.

Add a dining room if it adds to the usability of your house.

If i add a dining room and a study to my house how much more value will this add?

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Apr 15, 2010
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Dining rooms and studies do add value - if you're careful.
by: Elizabeth Elwell-Cook

This was a really good question Sergey. If you choose carefully when (and how) you're going to use a dining room or a study to add value, it can reap rewards.

The "how" of adding this type of room is what is really important though.

Consider this: If you have a three to four bedroom investment property, with only an eat-in kitchen, then things might get a little uncomfortable for your tenants and your prospective buyers.

You also need to consider your surrounding area when making a decision. Ask around. Look at new properties in your investment area. Do they all have a kitchen/family room and a separate dining room? If yours doesn't then perhaps you need to consider this addition.

Take a look at how it is done in comparable properties, and follow the lead of the popular properties that have sold quickly.

With the modern shift towards lifestyle homes, adding a dining room that opens right out onto a back deck can be the best solution. It adds space to the house, brings the outdoors in, and gives a feeling of alfresco living that can work during any season of the year.

In the above cases, you can expect to add up to 10% to the value of the property. Anything else is just icing on the cake.

Adding a study can be a more difficult proposition, and you need to choose even more carefully as a result. An inner-city property where young professionals are living simply to be close to their workplace is unlikely to need a separate study.

A bench for a laptop in the kitchen or in a little nook somewhere is a simple compromise that caters to a modern lifestyle where nearly everyone has a computer (and the trend is more towards laptops). This can work for many properties, including smaller homes and apartments in the suburbs where your options for extending are limited.

In properties situated further from the CBD, a study can be a real "selling" point, even for renters. People in the suburbs are more likely to telecommute, and will want somewhere to put the workplace away when they spend time with their family at night.

Another alternative is to offer a studio in the garden, or at least separate from the main house. A shed with a decent slab can be converted for the purpose. I know that in the Blue Mountains, west of Sydney, there are a large number of properties with separate studio/offices and it's considered a big selling point.

The most important thing to remember is to ask if the addition of these rooms will genuinely enhance the usability of the property for your tenants and buyers.

If you're really not sure it will, then don't do it. If you still think a separate dining room or a study will add value, but aren't sure of how to go about it, at least talk to a few real estate agents about what they look for in a great rental property in the area, and what difference it will make to the value of the property.

One more thing: Never overcapitalise!

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