How much does an extra bedroom add to house value?

Are you planning a home renovation or preparing to sell your house? If you are, you’re probably interested in adding as much value to it as possible.

One way many homeowners in Sydney are adding value to their homes is by adding an extra bedroom.

This article will explore how a bedroom addition can impact your home’s resale value. We’ll also look at what it might cost to create it and what factors can influence your potential return on investment.

Are you thinking about selling your home? Contact us. We can help provide expert advice, as well as undertake an appraisal that will give you a better understanding of your property’s true potential.

How much value does a bedroom add to a house in Sydney?

The natural question to ask when thinking about adding an extra bedroom to your Sydney home is: ‘How much value will it add?’

A Google search of generic sites might reveal figures like $50,000 or $80,000. However, it’s important to take these numbers with a pinch of salt.

Ultimately, the best advice will come from trusted real estate experts. We have in-depth knowledge of local property markets and can advise you on the factors that will influence the amount of extra value you’ll get by adding a bedroom to your Sydney home.

7 factors that affect how much value a bedroom adds

The value added from adding a bedroom depends on a range of factors. They include:

• Location
• Current number of bedrooms
• Property type
• Size and layout of the home
• Renovation cost versus value added
• Local buyer demand
• Market conditions

Let’s explore each of these in more detail.

1. Location

The suburb where your property is based will heavily influence how much value an extra bedroom can add.

For example, areas like Wahroonga, Lane Cove, St Ives, and Beecroft are popular with families. So, upgrading from a two- to a three-bedroom home could help you attract more potential buyers and potentially push the price upwards more than in other suburbs.

However, in regional areas or outer suburbs, the increased value may be more modest. Adding another bedroom might not have the same appeal if there are plenty of larger block sizes around or there’s a wider availability of family-friendly homes in the area (unless, of course, it brings the property in line with local demand).

Your local DiJones real estate agent will be able to advise on how much your property value may increase from adding a new bedroom.

2. Current number of bedrooms

The additional value that a new bedroom brings also depends on how many bedrooms your home already has. The key is to modify your floor plan to fit what people in your area are looking for.

Typically, the biggest gains are seen when upgrading, such as increasing from:

• One to two bedrooms, especially in units or apartments
• Two to three bedrooms, which would suit the needs of small families

After this point, the impact typically softens. Four-bedroom houses in Sydney remain popular with growing families. However, adding a fifth bedroom often has limited benefits unless the home is in a high-end or luxury market.

3. Property type

If you're renovating an apartment, townhouse, or freestanding house, adding a bedroom can help increase its value, but the results will vary.

In an apartment, converting a study or oversized living area into an extra bedroom can help it compete with larger units. However, maintaining a functional living space remains essential for appealing to buyers of this type of property.

In contrast, standalone homes offer more flexibility for a bedroom addition. Extending the footprint or reconfiguring the layout often provides you with the most impact in terms of resale value.

4. Size and layout of the home

Adding a new bedroom to your house is one thing, but ensuring it fits well in the overall design of your floor plan is another thing entirely.

For example, a cramped new bedroom squeezed into a corner or created by replacing living space can actually decrease your property’s appeal to buyers.

Ideally, new bedrooms will have easy access to bathrooms. They also typically feature good natural light, a decent amount of storage, and a nice flow between rooms.

A smart bedroom layout that complements the rest of the home can help increase home value. However, a not-so-smart one might limit the property’s marketability.

5. Renovation cost vs. value add

If you’re going to build an extra bedroom, you’ll need to know how much it will cost. This is where understanding your return on investment becomes important. For example, if you’re forecasting a boost of $50,000 in your home sale price by adding a bedroom, and the renovation cost is $75,000, it may not be worth adding that room (unless there are other lifestyle or tax advantages).

This is especially true if the margins are slim. Remember – the construction costs can vary based on materials, demand, and location, so it’s important to make sure the numbers add up.

6. Local buyer demand

When you’re looking to add an extra bedroom as part of a home renovation, it’s important to understand what your potential buyers are looking for.

For example, in family-focused suburbs, including another bedroom in your floor plan may increase its appeal and value. However, in inner-city areas or suburbs with a high number of retirees, it may be better to maintain fewer rooms with more space and features.

At the end of the day, however, if your renovations give people what they want, they’ll increase the value of your home.

7. Market conditions

There’s something else that adds an extra layer of complication, and that’s timing. If the market is strong, then well-executed home improvements (such as a bedroom addition) can increase the value of your property. This is particularly true when buyer competition is high.

However, while bedrooms can increase interest, they may not deliver the same boost in price during softer market periods or downturns. This doesn’t mean that adding an extra bedroom would be a bad move, but it does mean the return on investment might take longer to realise.

What does it cost to add a bedroom?

Adding an extra bedroom to your existing Sydney home can be as expensive or inexpensive as you want it to be.

Adding a new bedroom to your property is likely to cost an average of $1,300 to $4,000 per square metre for a ground-level extension. An extension on another level, such as a double-storey, will cost about $2,500 to $4,000 or more per square metre.

On top of this, you’ll also need to budget for planning and design fees, council permits, structural engineering, and site inspections.

These fixed costs can add several thousand dollars, even for smaller projects. Therefore, it's worth revisiting your return on investment calculations. If the added bedroom is likely to raise your property value by more than the total renovation costs, it may be a worthwhile investment.

Is adding an extra bedroom worth it?

Cost aside, there are a few other factors you should consider when deciding if it’s worth adding another bedroom to your Sydney property.

When done well, it can boost your property’s resale value and broaden its appeal. But in some cases, the costs may outweigh the gains.

It might be a smart move if:

• You can easily convert a study, rumpus room, or garage without too much disruption.
• Your target buyers are upsizing families.
• You’re already making other home improvements.

However, it would be wise to exercise caution if:

• The build cost is high, or the design compromises your home's flow.
• There's limited demand for larger homes in your suburb.
• The extra room reduces living space or natural light.

Ultimately, a bedroom addition works best when it suits both the current home and the local market.

If you’re unsure whether you should add one, get in touch with your local team at DiJones. They can do an appraisal of your home to help you understand the true potential of your property.

What’s the ideal number of bedrooms for maximum resale value?

In most Sydney suburban markets, three to four bedrooms is the ideal number to have on your property, as it helps you appeal to a wider number of buyers, including:

• Families
• Professionals who want a home office and spare bedroom
• A couple looking to start/grow a family
• Friends who want to buy together
• People who want to rent out a room

However, as mentioned, it’s important to set up your home to fit what local buyers are actually after.

Buyers are increasingly focused on function, layout and quality over sheer size. Plus, an open-plan living area, an extra bathroom, or a multi-use space can sometimes add more value than squeezing in another bedroom.

Before you plan any changes, it’s worth understanding how your current home fits into local buyers’ expectations. In particular, it’s important to consider whether an extra bedroom would genuinely improve the liveability and resale value of your property.

What room adds the most value to a house?

Bedrooms aren’t the only additions you can make to your floor plan. While they can add significant value to your home, bathrooms and kitchens can as well.

Indeed, a well-executed kitchen or bathroom renovation can sometimes deliver an even better return on investment. This is particularly true if the existing spaces are outdated.

Both kitchens and bathrooms are high-traffic, high-importance areas for most potential buyers. Therefore, making modern and functional updates to them can make a big difference to the perceived market value of your home.

Ultimately, the room that adds the most value to your residence will depend on its current condition and layout. For expert advice you can trust, contact the team at DiJones to discuss your specific property.

Other renovations that can add value to your home

Adding an extra bedroom might not be the right fit for your house or budget. But don’t worry, there are other home improvements that can still help increase the value of your residence.

We’ve already mentioned kitchen and bathroom renovations. However, creating a dedicated home office or media room can also be a good strategy.

In addition, building an outdoor deck, patio, pool, or BBQ area can be a real selling point. You can also choose to enhance your property’s curb appeal by painting the exterior walls and improving the landscaping, as well as repairing or replacing fencing.

Ready to learn more?

Adding a new bedroom to your Sydney property isn’t a decision to take lightly. However, the team at DiJones is here to help you determine if it’s the right move for you.

We understand the local housing market in Sydney. We also know what buyers in your suburb are looking for. If you’re looking to sell, we can assess your home and advise you on the best ways to increase its value.

Contact one of our local property experts today to arrange a property appraisal.

FAQs

Is it better to renovate or sell my house as-is?

The answer to this question depends on your property. In many cases, targeted home improvements like adding an extra bedroom can help boost its resale value. However, this is only the case if the costs of construction aren’t too expensive and are justified by local market demand.

Do new windows improve the value of my home?

If you replace old windows with new energy-efficient designs, such as double glazing, it can improve the value of your home. However, before you do this, research what your ROI will be to see if it’s a good financial move.

Does converting a garage to a bedroom add value?

It can, but the amount of added value will depend on whether it’s designed well and suits local buyers’ priorities, as well as how much parking is available in your suburb.

What’s better: 3 bedrooms and 2 bathrooms, or 4 bedrooms and 1 bathroom?

This differs among buyers. For many people, particularly families, a second bathroom can be just as valuable as an extra bedroom.