Article From HouseLogic.com

Published: December 21, 2009

A master suite addition returns an average of 60% of its cost, as long as you keep improvements in line with other homes in your neighborhood.

Adding a master suite (http://www.houselogic.com/articles/evaluate-your-house-master-suite-addition/) to your home is one of the most expensive improvements you can undertake. The private bed-and-bath combo for the masters of the house costs an average of $104,000 with midrange appointments and as much as $226,000 if you go with top-of-the-line fixtures and finishes, according to the 2009-2010 Cost vs. Value Report (http://www.remodeling.hw.net/2009/costvsvalue/national.aspx) from Remodeling magazine. Of that, you can expect to recoup between 55% and 65% of the investment, based on national averages.

The highest rate of return on a master suite addition is out west; in Los Angeles, for example, a $125,000 job recoups more than $90,000, a 73% return. But more than region of the country, payback on a master suite depends on how it compares with other houses in your backyard. “If you’re in a neighborhood of empty-nesters with two-bedroom houses, you probably won’t recoup the investment,” says real estate salesperson and appraiser Everett (Vic) Night, of Chapel Hill, N.C. “But if nice master suites are common in similar houses in your neighborhood, you’re likely to get a good portion of your money back.”

A master suite usually involves building a ground-floor extension, which means spending a sizable chunk of the budget to have the site excavated and a foundation poured. If you can take advantage of existing space–such as building up over a garage, or converting an unfinished attic or basement–you can significantly reduce costs and increase potential return.

But given the size of the investment, turning a profit shouldn’t be your motivation for adding a master suite, or for doing any large home improvement. Do the work because you want to, and only if you plan on staying put for at least three to five years, so you get the chance to live in and enjoy the new space.

National average cost, 24 x16 ft. master suite with midrange appointments:

Job cost: $103,696
Resale value: $67,578
Cost recoup: 65.2%

National average cost, 32×20 ft. master suite with upscale appointments:

Job cost: $225,995
Resale value: $125,793
Cost recoup: 55.7%

Regional info:

New England (http://www.remodeling.hw.net/2009/costvsvalue/division/new-england.aspx)

Middle Atlantic (http://www.remodeling.hw.net/2009/costvsvalue/division/middle-atlantic.aspx)

South Atlantic (http://www.remodeling.hw.net/2009/costvsvalue/division/south-atlantic.aspx)

East South Central (http://www.remodeling.hw.net/2009/costvsvalue/division/east-south-central.aspx)

West South Central (http://www.remodeling.hw.net/2009/costvsvalue/division/west-south-central.aspx)

East North Central (http://www.remodeling.hw.net/2009/costvsvalue/division/east-north-central.aspx)

West North Central (http://www.remodeling.hw.net/2009/costvsvalue/division/west-north-central.aspx)

Mountain (http://www.remodeling.hw.net/2009/costvsvalue/division/mountain.aspx)

Pacific (http://www.remodeling.hw.net/2009/costvsvalue/division/pacific.aspx)

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009.  All rights reserved.