How Much Value Does an Extra Bedroom Add?

Adding a primary bedroom suite can boost your home's value by $60,000 to $100,000. However, with an expected return of only 56%, it's less profitable than other home improvements.[1][2]

In our 2024 home buyer survey, buyers' top priorities were updated kitchens, bathrooms, and lighting, over improved bedrooms.

To determine if adding a bedroom is a wise investment, consult a trusted realtor. They can provide data on what's selling in your area and help you decide if the addition is worth it. In the meantime, we can help you consider key factors to decide whether a new bedroom is suitable or if you should sell your home sell your home as-is.

What is considered a legal bedroom?

To be considered a legal bedroom, the room must be at least 70 square feet, have 7-foot or higher ceilings, and have more than one egress point.

Building codes in certain areas may also restrict what makes a bedroom a bedroom. Your state, county, or city laws may also have requirements on things like: 

• Heating and cooling
• Window size and ventilation
• Closet space
• Number of electrical outlets

There’s also a significant difference between adding a bedroom to your home and a master suite. If you want to create a master suite, your addition needs to be larger than the other bedrooms and have a private bathroom.

Options for adding an extra bedroom

Adding a room to your house looks different depending on your upgrade. It could involve dividing a larger living space into smaller rooms, building off the side of your home, or building up to add a new floor.

Some factors to keep in mind before you add an extra bedroom include:

• The floorplan of your house
• Your home’s yard space
• How much you want to DIY

Here are some common options for adding an extra bedroom to your home.

1. Convert existing space

Homes with unused space, such as an attic or unfinished basement, are great candidates for adding an extra bedroom. These conversions often need simple adjustments, like installing a new window, finishing drywall, and adding a new closet.

These conversions also tend to be less expensive because they don’t require altering the structure of your house. They also have more DIY potential because there's less need for skilled contractors.

2. Add a ground-floor bedroom to your home

A ground-floor addition involves adding a new room to your existing floor plan by building onto an exterior wall, and it’s a great option if you’re considering building an entire master suite.

Additions may be effective for homes with slab or crawl space, but they may be less cost-effective for homes with a basement.

The extra square footage and bedrooms are more desirable in some neighborhoods. But you'll lose yard space, which may hurt marketability. Expanding your home’s footprint also requires hiring a contractor and tends to be more expensive than converting existing space.

3. Expanding a current room

If you have a small home office or extra room that's not quite large enough to qualify as a bedroom, building onto that room may work. Instead of creating a new bedroom, you may only need a few square feet to make your room large enough.

A room expansion will require more help from a contractor, but the process is less extensive than an entire addition. These small additions can also give you space to add a walk-in closet to a master bedroom or make a guest room more comfortable.

4. Build up to create a second story

Adding another floor to your home is a good option for homes with small yards because you don’t need to sacrifice that space, but it has some downsides. The most significant benefit of building up is that your home’s footprint stays the same — maximizing both your indoor and outdoor space.

However, sandwiching another story between your roof and your existing home is a lengthy, labor-intensive process. Raising your roof requires a complete teardown and rebuild or a large team with specialty equipment. You may also need to reinforce your foundation to handle the extra weight.

What are the costs of adding an extra bedroom?

Cost is often the deciding factor between adding a bedroom or selling your house as-is and buying a new home. Remember that the more you spend on your home improvement, the less you may make back in the long run.

You should expect to pay around $50,000 on average to add a bedroom to your home — but that varies based on the reno.[3] Here’s what you can expect to pay for different bedroom additions.

Bedroom conversions: $10,000 to $90,000

One of the most cost-effective options is to add a bedroom by dividing up your current floor plan or finishing a basement or attic space. This is the typical price breakdown for converting a room into a bedroom, from living rooms to attic spaces:

These conversions often include adding or removing walls, installing windows or egress points, and upgrading your HVAC system to heat and cool your new living area. Each home is unique, so connecting with a contractor is important before assuming how much a bedroom conversion will cost.

Ground-floor bedroom additions: $20,000 to $160,000

Adding a full addition to your house comes with many costs you’d associate with building an entirely new home. Typical project expenses for a brand-new bedroom addition include:

Your square footage will play a critical role in the cost of a bedroom addition. Smaller guest bedrooms are more budget-friendly, while master suites will cost significantly more and have additional plumbing expenses.

Room expansion (bedroom bump out): $4,000 to $9,000

Expanding a current room to create a new bedroom is more cost-effective than building an addition, but you still need to factor in similar costs per square foot. To estimate for your bump out, you should estimate for:

• Foundation work
• Framing and insulation
• Siding and drywall
• Roofing and windows

With many bump-out expansions, you can avoid expenses like extra wiring (especially if your expansion is mostly closet space).

Partial second story additions: $60,000 to $250,000

Creating a room above your garage or building an entirely new floor is the most expensive way to add to your home, but it may be worth it if you want to keep the same footprint. Building up includes everything you’d expect from an addition and:

Foundation reinforcement: Some homes built on crawl spaces or piers can't support the weight of an extra story. Reinforcing a foundation can cost around $5,000, and a new support beam alone can cost $3,000.

Temporary housing: Removing your roof and adding a second story may require you to relocate during the renovation. If you don’t have a secondary residence, this could be a costly expense while you add another bedroom.

According to Forbes, homeowners should expect to pay between $100 and $300 per square foot to add a second-story bedroom.[4]

Other costs to keep in mind

Each type of bedroom addition is different, but there are some other costs you should factor into any upgrade. A few universal expenses of creating a new bedroom include:

These upgrades are great DIY options and could put money back in your pocket, but it’s important not to cut corners here. If you aren’t confident in your DIY skills, it’s more important to trust an expert to perform a high-quality job than attempt it yourself.

How much value does an extra bedroom add? What the experts say

Determining your ROI for a bedroom addition doesn’t have a cut-and-dry answer. The size of the room, how you added it to the home, the current market, and your location are all significant factors that affect your home’s fair market value after an upgrade.

Your neighborhood can make or break ROI

Neighborhood is one of the driving factors of a home purchase, and many buyers are willing to compromise on aspects like the number of bedrooms if the location is right. Knowing your neighborhood should be your first concern before adding a new bedroom.

Melanie Musson, home finance expert from Insurance Providers, says it’s important to know your potential buyer before creating a new bedroom.

“If your home is in a family neighborhood, your buyer demographic will probably be looking for three bedrooms," she says. "However, two bedrooms are often more desirable if your home is in a senior housing development.”

Small bedrooms have a less positive impact on resale

Adding a roomy new bedroom may make sense if you have extra square footage that won’t hurt the current layout. But you might want to hold off if you can only add a small bedroom.

“The ROI will depend on the neighborhood and your home’s specific design,” says Musson. “If you have a home in a family neighborhood with a lot of square footage but only two bedrooms, adding a bedroom will have a higher ROI than if you have a 1,000 square foot home and try to take 100 square feet from the living room to add a tiny bedroom.”

Refinished basements and attics are money-makers

Basements and attics have untapped potential for livable space in your home. When done right, refinishing a basement or attic into a bedroom can be a major value add for prospective buyers.

Behind kitchen and bathroom upgrades, refinishing a basement is one of the next best things you can do to attract buyers, according to Brian Durham, managing broker at WeGo Real Estate in Minnesota.

Unique features are worth more than a bedroom

If your home has unique features like a reading nook, large pantry, or outstanding den, replacing them with a bedroom may add less value in the long run. Embracing these features is often better than increasing the number of bedrooms.

Musson points out that sacrificing uniqueness doesn’t pay off, “Don’t add an extra bedroom if you’d have to eliminate a highly sought-after feature from your home. For example, if you have a butler’s pantry, don’t convert it into a bedroom.”

Adding square footage typically boosts home value

Clever's Homebuyer’s Report found that 35% of buyers we surveyed wanted to purchase a large home. Adding livable space and increasing square footage will increase your home's value — as long as you keep it around the same size as comps in your neighborhood.

CEO of Rent to Own Labs, Martin Orefice, highlights that you should add square footage when you can. “More bedrooms, bathrooms, and square footage. These improvements can be costly, but they also boost those essential top-line numbers on your home.”

How to get the best return on your investment

Getting the most out of your bedroom addition is crucial to making the renovation worthwhile. Here are some ways to maximize your ROI when adding a new bedroom to your home.

Avoid building a complete addition

Complete bedroom additions are the most expensive way to add a bedroom to your home, and they often see a low return on investment. If the only way to add another bedroom is an addition, it’s best to reconsider.

“Adding a new bedroom as a full addition is prohibitively expensive," says Orefice. “Foundation and roofing work are particularly pricey, so you'll almost always come out behind relative to the cost of this kind of addition.”

Don’t over-improve 

Other homes in your neighborhood can help you determine if another bedroom is a good idea. It’s best to match the number of bedrooms of other houses on your street — this strategy will keep you from over-improving.

Kristen D. Conti, broker/owner at Peacock Premier Properties in Florida, explains that if most homes in your area have 3 or 4 bedrooms, adding a 5th may not yield a good return on investment. "However, if you go from a 3 to a 4 and that bedroom could also serve as a gym, office, or hobby room, this could prove very beneficial."

Keep your floorplan in mind

One of the biggest mistakes you can make when adding a bedroom isn't accounting for the flow of your home. Awkward floorplans can turn buyers off of a house and make living in the space challenging.

An example of a poorly planned bedroom addition is one that doesn’t have access to a common area.

“Adding a bedroom that can only be accessed from another bedroom is a mistake," says Musson, the home finance expert from Insurance Providers. "Bedrooms should be accessed from common areas like living rooms or hallways.”

Pull necessary permits

If you have an unfinished garage or screened-in porch that could be easily upgraded into a bedroom, starting construction without the correct permits can hurt you in the long run. Not going through the proper channels will make appraising your home a hassle and hurt the resale value.

Kristen Conti points out that it’s a common problem when working with customers.

“Many people here in Florida convert their garages and want me to list them as a 3rd bedroom, but they never pull permits, and the tax rolls still reflect a 2 bedroom. This becomes an issue at appraisal," she explains. 

Get multiple quotes before choosing a contractor

Finding the right contractor for your job is one of the best ways to maximize your ROI. Getting referrals from your realtor is an excellent way to start your hunt for contractors.

According to Conti, another great way to find reliable contractors is to get referrals from satisfied customers. She also points out that you should get at least three quotes from general contractors before choosing one for your renovations.

Other factors to consider before adding an extra bedroom

The pros and cons of adding an extra bedroom go beyond your return on investment. Some other factors you should consider before adding an extra bedroom include:

• If you have a growing family and want to stay in the same neighborhood
• Whether you plan on using the space for a while or only want it for resale
• How much time you want to spend on a renovation

Balancing personal needs and expected ROI will help you decide whether an extra bedroom fits well. If you're only looking to maximize your profit when selling, you may want to consider other home improvements that add more value with less cost.

Bottom line: Is adding an extra bedroom a good investment?

Adding an extra bedroom can boost your home’s value, but you shouldn’t expect a dollar-for-dollar return on investment. To maximize your ROI, find a way to add a bedroom that doesn’t require a complete addition — like finishing a basement — and use your DIY skills when possible.

Still unsure about adding another bedroom? Contact a real estate agent to determine if it's the right move for your neighborhood and to get recommendations on contractors in your area.

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