Certain features such as garages or porches have solid research behind them indicating the overall value they add to a home, but it can be difficult to assess less common features, such as a loft conversion, when deciding whether they're worth the investment. As a homeowner, it can be easy to decide whether a renovation is worth it because personal value for the project comes into play. However, as a real estate investor or landlord, you must consider how much value the project will ultimately add to your property and whether the cost is worth the investment. Take a look at whether a loft conversion is worth it in the long run.
What is a loft conversion?
A loft can mean different things in various parts of the world, but here in the United States, a loft conversion most often refers to creating a private room out of an open, elevated space in a house or apartment. Essentially, it involves enclosing an open space and creating a completed room, whether it be a bedroom with an ensuite bathroom or an office. An important distinction here in the United States is that a loft is not an attic. An attic is completely separated from the rest of the house, whereas a loft is open to a portion of the finished residence. The costs and returns will be different for an attic conversion.
What is the cost to convert a loft?
The average cost to convert a loft is $20,000, but that can climb upwards of $60,000 depending on the size, whether you're including a bathroom, and other finishing details such as access to the space and general quality of the build. You'll need to hire an architect to ensure that the design is structurally sound and functional. Renovation components will include all of the standard addition items, such as framing, drywall, flooring, etc., but you'll also need to consider the possibility of finishing, raising, or lowering the ceiling and adding a finished staircase to access the room.
Is a loft conversion worth the investment?
Renovating a loft can quickly add up to a major expense for your latest investment, which may lead you to question whether it's worth it. According to HomeAdvisor (NASDAQ: ANGI), if a loft conversion is done well -- and especially if you are converting it into a bedroom or bathroom -- it could provide a 50% to 75% return on investment (ROI). Not terrible when compared to low-ROI projects like adding a pool. Adding an ensuite bedroom and bathroom does cost about twice as much as simply enclosing the space into a room that could be used as a home office or storage space, but you are essentially adding a room count to your investment. Your two-bedroom, one-bath home can now be considered a three-bedroom, two-bath, adding a lot of value to its sale potential or rental desirability.
It is important to consult not only a licensed architect and contractor to create a functional space but also your local realtor to determine whether the market demand is there. Keep in mind that loft conversions are usually, but not always, smaller spaces, so demand in urban settings will probably be higher since space is already at a premium. A loft conversion is likely only worth the investment if done appropriately, but ultimately, you will need to do market research to ensure your investment is worth the returns.