Bathroom addition: return on investment

An additional full bath can increase the value of your home

A new bathroom brings added convenience for your family and can prove to be a valuable asset should you decide to sell your home.

Adding a full bathroom can increase the value of your home by 20%. Image: Porcher

Depending on the size of your family and the number of existing bathrooms in your house, adding a new bathroom may be one of the best home improvement decisions you’ll make. According to Greg Miedema, chairman of the National Association of Home Builders Remodelers (NAHBR), additional bathrooms are highly desirable features. “You can almost never go wrong adding a bathroom,” says Miedema.

This is especially true if an additional bathroom helps relieve congestion at hectic times, or if it provides much-needed convenience for guests—no small considerations.

As an investment, however, a new bathroom should be carefully considered. The cost of a new bathroom ranges from $39,000 to $75,800, but the return on that investment averages a modest 59%, according to Remodeling Magazine’s annual Cost vs. Value Report. That value has been steadily declining over the past several years due to rising construction costs and falling home prices.

Nevertheless, national averages may not be a reliable predictor of value in your particular neighborhood. Before committing to a bathroom addition, call in a real estate agent or professional appraiser to evaluate whether an additional bathroom makes sense in your situation. Buyers tend to prefer houses where the number of bathrooms equals the number of bedrooms, according to the National Association of Home Builders (NAHB).

NAHB data also suggests that an additional half bath may increases a home’s value by about 10%, while an additional full bath increases the value by 20%. That means spending $1,000 to $2,000 more to add a shower or tub could double the return on your investment.

National and regional data from the Cost vs. Value Report:

National average cost, midrange 6x8-ft. bathroom addition:

Job cost: $39,000

Resale value: $23,200

Cost recoup: 59.5%

National average cost, upscale 10x10-ft. bathroom addition:

Job cost: $75,800

Resale value: $43,900

Cost recoup: 57.9%