If you plan to live there for a number of years it will payoff to you regardless of whether the market recognizes it as you will be able to enjoy it.
With resale homes selling at much less per square foot than it costs to build them there is always a wonder as to whether the investment will payoff. If you do not over build for the area you should be okay. Also, if you like the area and couldn't find another home with all the amenities you want for less than the cost to construct I think that is a factor as well.
You can view a slide show of this project on the YouTube Videos page of our website http://www.chuckmillerconstruction.com or you can view it on our YouTube channel by following the link below.
The conversion of the open space on the second floor won't likely bring up the value. Whether it's good for the marketability of your home would depend on whether the space is more functional as a bedroom or as open space.
There isn't enough information to give any more than very generic answers. If you intend to live in the home for any length of time, I wouldn't get too concerned over how anything will affect the resale value. As long as you aren't eccentric, or upgrading an entry level tract home with marble and diamonds, then doing what adds value to your family usually works out over the long term.
Good question indeed!
It's a more complex question than you may know, and it certainly can only be answered correctly if the context of the question is more understood, but with the given information, I'll give it my best shot.
First, there are at least 2 different meanings for the term "value". There is the value of the actual investment in terms of resale (as you asked), and then the value that any prospective buyer could/would/will place on it.
Each year, a cost vs. value report is released and made available to Realtors and consumers alike. I took the liberty of doing some research and will attach a link to my site where you can see the cost vs. value for some remodels for the Boise area. I have to get permission to do so, so until then, you can just go to http://www.costvsvalue.com and see the report for Boise.
In a nutshell, I'd say that you're not going to recoup anymore than 70-75% of the actual cost of the job. That's only a guess from what the report show from other projects.
That said, I think that while you may not see a return on your investment, you may see an increase in marketability and perceived value by prospects. On the other hand, some prospects may think you did a poor job or didn't choose good materials and specifications. It's risky, but if you're really good at what you do, peoples jaw will drop.
Good luck with your project and feel free to contact me for any specific questions regarding remodeling or resale questions!
One thing to keep in mind that the HVAC system in the home may not be large enough to handle the extra 500 sq. ft. in the attic since that is going to be the warmest room in the house! I know builders that used to convert space over the garage into bonus rooms for roughly $8,500 by switching to bonus room trusses, etc., and their appraisals always came in about triple their costs!
Open space in a home is very welcoming, but I know in my cabin, the plans call for a huge open area that I will convert into a loft instead since I can use the space. I should probably have it built without it for appraisal and tax valuation reasons then add it later myself. (thanks for making me realize this strategy)
Some day, people will value cubic feet of a home not just square feet to allow for things like 10' ceilings vs. 8', cathedral ceilings, vaulted living areas, etc., but so far most people in the industry have yet to master sq. ft.!
I would be glad to come out and look at the exact situation to see what you are up against to make sure the answer is still the same!
Jim Paulson, CRS, GRI, EPRO
Owner/Broker = Progressive Realty Corporation