How to Increase the Value of Your Home By Adding a Second Story
By Pat Cardoni
Last week we talked about the duckets, the simoleons, the cashola required for a two flat de-conversion. This week money is on my mind again…but this time let’s talk about adding a second story!
Adding a Second Story
Many times we are confronted with the issue of old dysfunctional designs standing in the way of a modern family home. One of the easiest ways to add value in the city of Chicago and surrounding areas is to add a second story.
There are costs associated with modifying a home, especially in the City of Chicago. When you add a second story what will you need to consider for costs of construction? The first thing you will need is a bigger water supply line. Yes, the city will have you dig into your pockets to the tune of $15,000.00-$25,000.00 to add a new water service line and if you are lucky a sewer service line too. I hate to sound like I am playing my violin cords looking for sympathy, but the city will always defer costs to the buyer/owner wherever possible.
You will find that adding a second story will run you $135-$150 per square foot. This is not much different than the cost of a new construction home. The reason it is so high? The roof and the framing are, you guessed it, new. Framing costs are climbing almost every 6 months as the cost of lumber continues to soar. Most likely your framing materials and labor will be very similar in price. When obtaining estimates for you framing material costs, we have found that smaller Lumber Yards where they have actual sales people with building experience pricing out your estimate. The larger home supply Big Box stores are more likely to have someone less experienced doing your bid. From our database of over 475 projects the average of all of our projects puts framing material at around $10/sq. Also the average price of labor for framing is around $8/sq ft. So if you are building a 1,000 sq ft addition you would have approximately $18,000 in costs just for the wood framing and materials.
However, a second story will give you appraisable square feet above grade which is where the untapped equity in a home lies. You can finish basements and get a $15K-20K bounce in value. Basements increase in value rarely covers the cost that you put into them. You can add a second story home and get an increase in value of 30-60 percent, pretty impressive.
If you are thinking about ways to increase value on your existing or future home through construction please give me a call and we can discuss. I am able to analyze the construction costs and the real estate value in your given area that you will be able to obtain through your potential project. In other words, measure twice, cut once.
Peace and Love,
Pat Cardoni is a real estate broker and owner of Cardoni Real Estate Development. He has directed the sales and real estate development side of SG Home Builders since 2007.