Expert: Russel Ray - 10/8/2009

Question
QUESTION: We live in an old home, built in 1890, in South Alabama.  It's got several rooms and I've spent the last few years trying to decide what to make each room to be.  When a home is appraised, which rooms give a home more value?  The rooms I'm considering are play room, breakfast room, dining room, library, laundry room, office, back foyer, parlor, in addition to living room, kitchen, bathrooms, bedrooms.  How many bedrooms and bathrooms should I have?  I would guess three bedrooms and two bathrooms would be a good standard minimum, but would more bedrooms add value before a breakfast room, for example?

ANSWER: Very generally, bathrooms and bedrooms add more value to a house, so if you have a three bedroom/one bathroom, make it a three bedroom/two bathroom. Three bedrooms/two bathrooms is a good standard minimum because that allows the parents to have a room, two kids to share a room, and a room for an overnight guest.

More bedrooms would only add value if you have bathrooms to handle them. If you have a two bedroom/two bathroom house, adding three bedrooms wouldn't make sense. Add two bedrooms and a bathroom.

The extra rooms -- play room, breakfast nook, dining room, library, etc. -- generally only add value once you get into the large mansions where such rooms are part of the standard minimum, regardless of how many bedrooms and bathrooms there are.

I say "very generally" because South Alabama might be vastly different from the areas where I have worked -- Houston, New Orleans, San Diego, Philadelphia, Portland, Seattle, Detroit, etc. -- all very large cities.

Hope that helps.

Russel

---------- FOLLOW-UP ----------

QUESTION: We've got eleven rooms plus three bathrooms.  From those eleven rooms, if we take out the main rooms we have to have, like living room, kitchen and three bedrooms, that leaves six rooms to play with.  I would do best to convert the remaining rooms into a roughly equal number of bedrooms and bathrooms?  I didn't know if the appraiser had certain value to attach to each type of extra room that might affect the value?

Answer
Hey, Laurie.

Appraisers do have values to certain types of rooms, but usually it is bedrooms and bathrooms. Everything else they'll typically do on a square foot basis, but it can vary on a regional basis as well as a neighborhood basis.

Right now you have three bedrooms and three bathrooms. What do your neighbors have? It is possible to overbuild for a neighborhood, at which point you lose value regardless of what you do because there are no appropriate comps for your home in the neighborhood.

Even with that, though, a home with more bedrooms and bathrooms will be more valuable than a home with fewer. The reason probably has a lot to do with renting. One can easily rent a bedroom if it has it's own private bathroom. If one has to share with a stranger, it becomes more difficult. Such can be projected to a family, as well. It's easier to sell to a family of eight if the teenagers get their own bedrooms and bathrooms.

Hope that helps.

Russel