A home undergoing an addition and renovation.

Planning for a Home Addition

Updated March 26, 2019 . AmFam Team

Are you planning to make a new addition to your house? The process can be confusing and costly — but that’s why we put together some tips to help you get started and make the best decisions for your home with American Family Insurance.

When you’re in a financial position to make an addition to your home, it’s easy to get wrapped up in the excitement and start the project prematurely. But don’t go out buying lumber or hiring contractors just yet — planning is the most crucial part of the process. Carefully mapping out your home’s new addition can save you time, money, regret and stress.

Among other things, you should set a budget for the project, have an ideal timeframe for completion in mind and know specifically what you want. It'll help you keep a level head during the project and avoid impulsive overspending. 

Home Addition vs. Home Remodel

While a home addition might seem like the logical next move in the development of your home, sometimes it’s not the best choice — oftentimes, a remodeling of your home is a much better decision. Consider these things before jumping into either type of project:

Space. If the square footage of your home simply isn’t enough to comfortably house your family and your belongings, an addition might be the right call — especially if you’ve eliminated the possibility of moving into a larger home. If you’ve got plenty of space and are simply looking to upgrade the quality of your abode, take the “less is more” approach and opt for a remodel.

Customization. Adding another room to your home gives you much more creative freedom than a remodel. While you can remake a room to match your own personality and fit your needs, there may be some elements that can’t be changed.

Cost. Generally, a home remodel will cost less than a home addition. Home additions require new construction — and with that new construction usually comes more laborers, more time and more materials. While each remodel and addition are different, it can be helpful to get multiple quotes on each type of renovation. Then, compare them and see what best fits into your budget.

Time. Again, every remodel and addition project is different, but most additions require more work and time. Consider that along with the time it’ll take to complete the project, you’ll also have workers in and around your home making noise while they get the job done. Weather, your work schedule and the contractor’s availability can play a factor, too.

Types of Home Additions

Home additions aren’t just vague, general projects that are done on a whim. They’re a purposeful effort to bring more comfort, joy or other benefit into your family’s life. Here are a few of the most common types of home additions:

Sunrooms. A sunroom is a space with large glass windows which allows homeowners to enjoy the warmth of the sun and the beauty of the outdoors while still being in their home. Sunrooms usually aren’t heated or cooled, making them somewhat unusable during extreme weather conditions.

Screened-in porches. Screened-in porches are great alternatives to sunrooms if you’re looking to get more fresh air, as they usually employ screens instead of glass windows. They’re even more susceptible to hot, cold or rainy weather.

Room extensions. Many people extend rooms they spend the most time in with home additions. Living rooms and kitchens are the most popular, but any room on an outside wall of your home can technically be extended.

Garage addition. Depending on the structure of your current garage and home, you could be able to add more storage or workshop space with relative ease. And even if you current garage doesn’t allow for much extension, you can add a detached garage on your property if you have the space.

Different contractors will specialize or offer other types of additions, so be sure to ask your potential contractors about your home addition options.

Building Up vs. Building Out on Your House

When it comes to making an addition to your home, you’re not limited to just expanding into the horizontal space next to it — you may actually be able to build up vertically, taking advantage of the unoccupied and unused space! Here’s how building up compares to building out:

Building Up Your Home

Unfortunately, it’s not as simple as just stacking another level on top of your home. With the new weight of another level, your contractor will likely need to get to your home’s foundation to make sure it’ll be able to safely and adequately support the entire home. Be sure to ask about your locality’s regulations for building up and house height limits, as they could put a halt to an expensive project quickly.

Building Out Your Home

You’ve probably seen many instances of a home being built out — it’s the typical way home additions are done. You’ll need to do more research on your property lines and zoning laws, but you’ll have to endure less interior work than that of a home build-up.

Home Addition Costs

There are a wide variety of costs to consider when you’re mulling the idea of a home addition. Get a clear view of your financial situation by understanding your current debt level, cash on hand and income before diving into a project. Consider these costs specifically:

Building materials. You’re better off leaving the purchase of building materials to the experts, but be prepared to pay a markup for their service. Keep in mind that if you try to buy the materials yourself and your contractors find that they’re not the right kinds of materials for the job, you’ll be out even more cash.

Architects. Having a professional design your new space isn’t cheap, but it’s a surefire way to be certain that it’s designed safely and correctly.

Construction and demolition crews. You should be getting estimates from multiple companies for your project, but make sure you understand if any demolition will be needed in combination with the construction, as it can be a sneakily expensive addition to your bill.

Electricians. Your new addition will need to be wired correctly, and that project will likely involve altering some of your existing wiring, too.

Plumbers. If your new space will need running water, having a professional plumber take on the job is a must.

Insurance. You’ll need to insure your new space just like you insure your home, so talk with your American Family Insurance agent about getting a professional on site to help you decide if you’ll need any extra coverages in addition to your homeowners policy.

How to Finance a Home Addition

If you don’t have enough cash on hand to fund a home addition but have good credit, you’ve got options when it comes to financing your home addition. Talk to your mortgage lender about a home equity loan or a home equity line of credit (HELOC). Depending on your current mortgage situation, you may be eligible for one or both.

Do Home Additions Add Value?

Home additions generally do add value to a home, but that value might not exactly match the amount of money you put into the project. That’s why you should carefully plan your home addition before you act. If you plan on selling your home in the near future but have a very personalized home addition, some home buyers might lose interest.

Before you make an addition to your home or remodel it, it’s necessary that you talk with your American Family Insurance agent (Opens in a new tab) about getting the right coverage amounts for your home, whose value will change. Ask them about how you can properly insure your property after home improvements, protect yourself from the unexpected and get the peace of mind you deserve.

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