Home additions can add liveable square footage to your dwelling — but are they worth it? With the extensive work involved with this type of renovation, home extensions (and additions!) land on the higher end of construction costs. Depending on your goals, if you’ve outgrown your home, you might want to consider building a home addition and expanding your current place.
Are you looking to stay within the same neighborhood? Is there additional outdoor space on your property? Do you want to increase your home’s value? Adding to your home’s footprint with a home addition is worth the investment, if so.
To help you plan your renovation project, this home addition guide will take you through:
- What is a home addition?
- Pros and cons of extending your home
- How to build a home addition step by step
- Plans and permits needed to build a home addition
- Costs of different types of home additions
- Does an extension add value to your home?
What is a home addition?
There are several ways to increase your home’s footprint and add value to your property. You can build up, down, or out through a home extension or home addition.
- An extension involves adding to an existing level either sideways, towards the back, or to the front to increase floor space while remaining at ground level.
- An addition involves adding an entirely new level to your house or digging down into a more welcoming and/or functional basement.
Costs, timeline, and building requirements are dependent on the type of renovation you choose and how you decide to use the extra space.
Pros and cons of extending your home
For many homeowners, their house is a lot more than four walls and a roof — it represents cherished memories, comfort, and community. But as families grow and life-changing events happen, it’s not unusual for homes to no longer meet your needs. To adapt to your new lifestyle, you can either purchase a new house or remodel your current home. Both options have their pros and cons, so how do you choose between adding an extension or moving out?
Adding more space to your home could be the best option if you already live in a sought-after area and wish to remain there. The hassle and upfront costs of moving (such as stamp duty, deposit, or legal fees) alone can be enough reason to stay put. Putting your current home on the market is an option, but with rising housing prices, will you be able to find and afford a new one that ticks off all your boxes?
On the other hand, if the idea of embarking on a large-scale renovation like a home extension or home addition fills you with anxiety — you’re worried about costs, managing the renovation process, finding reliable partners, or living in a construction zone — moving could be a more attractive alternative.
Factoring finances into your decision
Think about when you purchased your home and how much equity you have in it. Prices for housing are soaring across markets. If you bought your home several years ago when prices were lower and you own a lot of it outright, you might be able to finance your home extension or home addition without significantly increasing your monthly mortgage. Purchasing a larger home may bring even more expenses — you could also want (or need!) to make changes to your new place, so you’ll have to set aside extra budget to do so.
How to build a home addition step by step
A home addition is a major renovation investment that requires a tremendous amount of planning and coordination. Between getting building permits and hiring the right general contractor, adding living space to your home has many moving parts. Staying on top of the smallest details (like what a quote should include) to big-ticket items (like having a contingency budget) will keep your renovation project on track.
Next, we’ll take you through all the steps to build an extension, from defining your needs to overseeing construction.
1 - Define your project’s scope of work
To set a clear direction for your home addition, begin by describing the problem you plan to solve. Take the time to understand your current situation and research what you want out of your renovations.
Here are some questions to ask yourself:
- What type of home addition do I want?
- What is the total surface area of the home addition? How many floors are there?
- How many and what type of rooms do I want to add (kitchen, bedroom, bathroom)?
- Do I need a centralized HVAC (heating, ventilation, and air conditioning) system?
- What is my budget?
- What is my timeline? When should the work start? When should it be completed?
- What is my current living situation pre-construction?
- What is my desired outcome? What do I want the home addition to look like?
The guiding questions will help you build your project scope and communicate your goals, vision, and needs to to a building expert (architect, engineer, or interior designer).
Expanding or modifying your home is a significant property investment. A renovation can affect the value and use of your home over the long-term. As a rule of thumb, your upgrades should last up to 20 years. Whether you plan to stay in your space permanently or not, consider your future in the scope of work to get the most out of your investment.
2 - Understand your municipality’s requirements
Present your home addition project to your municipality to see if it’s eligible for construction. In some cases, a building permit may be required to move forward with the project. Rules for extending your house differ depending on your area and whether renovations involve house modifications, second-story additions, or home additions. To find out how to get a permit, here are some questions to ask your municipality:
- Am I allowed to modify my home as defined in my project scope?
- How long does it take to get a building permit for this project?
- What documents will I need to obtain a building permit?
Here are some documents that may be required when applying for a building permit:
- 3D concept plans
- Architectural plans
- Structural plans
- Survey plan
- Drawings/photos of external elements (e.g., exterior siding, doors, windows)
- Certificate of location
- Building sheet
- Proof of insurance from the general contractor performing the work
You may need to review and modify your project scope before getting approval for a permit. For example, there could be building height restrictions in your area. To circumvent this rule, you could extend your house to the side or towards the backyard instead of building upwards.
3 - Identify the experts you need
Depending on the type of home addition, different design and build professionals can be involved at various stages of your project. As a general rule, the larger the project, the more stakeholders there are. When it comes to a standard home addition, you’ll work with the following experts:
- Architect (or architectural technologist)
- Interior designer
- Structural engineer
- General contractor and their subcontractors
- Material suppliers
4 - Hire an architect (or an architectural technologist)
The architect (or architectural technologist) is responsible for providing guidance and bringing your vision to life. They’ll work with you to understand your reasons for extending your home, your style, and your design preferences while maintaining a sense of harmony between your current home and the new layout.
What is the difference between an architect and an architectural technologist?
- An architect can carry out and sign plans for all residential, commercial, or industrial projects with complex structural requirements.
- An architectural technologist may not be qualified to undertake large-scale construction projects.
5 - Design architectural plans
After discussing with you, an architect/architectural technologist will take measurements of your home. They’ll then be able to draw a series of plans for various stages of your project.
- Sketches: Drawings outlining the layout of the space to be renovated
- Preliminary plans: Plans used to obtain a building permit
- Construction plans*: Plans explaining the work that needs to be done
- Demolition plans (if necessary): Plans showcasing elements that need to be taken out
* Though not mandatory in theory, construction plans are important for the following reasons:
- As the primary means of communication, they describe the work that needs to be done during your renovations with details such as room dimensions, materials, finishing specifications, siding, flooring, foundation, and sound and thermal insulation.
- These plans allow contractors, subcontractors, and suppliers to estimate costs and build quotes. The entire scope of work is compiled into a single document to reduce ambiguity, misunderstanding, and interpretation risk.
- They may also be presented as a legal document for designs that need to be based on plans signed by a designated professional.
If finding an architect to work with sounds like a hassle, don't fret.
When you work with Billdr, you'll get access to our network of high-quality architects. They can help you with pre-construction, design, and permitting plans.
6 - Hire a structural engineer
Building an extension to your house typically requires both an architect (or architectural technologist) and a structural engineer. While the architect is responsible for designing the new layout and choosing construction materials and finishes, the structural engineer is responsible for designing and sizing structural elements (i.e., load-bearing components that hold a construction up, whether they’re wood, steel, or concrete.)
What is the difference between architectural plans and engineering plans?
During the design phase, the architect can suggest having a reinforced concrete foundation. However, there won’t be any specifications about the selected concrete, no plans of reinforcement within the poured concrete, nor walls and footings dimensions in their architectural plans. Since the architect doesn’t have the necessary expertise to give these directives, it’s not within their professional responsibility to define these details. The design and sizing of structural elements are strictly reserved for structural engineers, who have the knowledge and credentials to include this type of information within their plans.
7 - Develop structural plans
Structural plans determine the structural elements of your home addition: foundation, concrete slab, load-bearing walls, columns and beams, and lintels above doors and windows.
These plans give precise information to the general contractor on how to build the parts of your home addition that holds it up. According to the Law on Engineers, an engineer’s input is mandatory for any construction work related to a building’s structure.
General contractors can recommend a structural engineer that they’ve worked with. However, we suggest hiring an independent one to avoid potential conflicts of interest. Also, keep in mind that a contractor needs an engineer’s recommendations on structural work before being able to provide you with final quotes.
8 - Apply for building permits
A building permit is an authorization from your municipality to undertake specific renovation work, including home additions. You should try to get a building permit from your municipality as soon as you receive your architectural plans. Some areas may also require structural plans for your project to be approved. In general, it takes between two and three months to get a building permit, depending on the municipality and the type of construction work.
9 - Request quotes from general contractors
Once architectural and structural plans are finalized, you can start receiving quotes from general contractors. Providing complete project plans will allow you to get the most accurate quotes. If there’s missing information, general contractors might have to take additional time to revise their quotes.
Once documents are received, contractors will visit your property to get a full understanding of the scope of your home addition project and the environment that they are working with. This step will help them assess and visualize the different components of the construction site that impact the cost of your project (e.g., entries, exits, overall condition of the house).
Should I discuss my budget with a contractor?
The short answer is yes! Discussing with your contractor about your objective is a good exercise. Sometimes contractors will have ideas that build upon architectural and/or structural plans to help reduce your costs or improve work quality.
General contractors ask clients about the budget to ensure that their time is well spent. Preparing a quote for a home addition project can take up to one week. This process requires the general contractor to read plans and specifications, meet with the client, communicate with other build professionals, and request prices from suppliers and subcontractors — while not being sure if they will be paid for the job. So, before starting to work on a quote, a contractor needs to be assured that their client has the budget to complete the project.
Between design plans and actual construction, changes can occur along the way. Keep a contingency plan of at least 15% of your budget to cover for these unforeseen expenses and/or additions to the scope of work.
10 - Hire a general contractor
After meeting with several general contractors and receiving quotes, you’ll have a better sense of who you want to work with. At this stage, you’ll be able to choose and hire a general contractor to carry out construction on your project.
Once signed, the quote becomes a binding contract. So, before moving forward with the quote, make sure that it includes the following information:
- The general contractor’s name
- The general contractor’s license number
- Your name
- Your project’s address
- Scope of the project (the contractor must state that the work will be done "according to the architectural and engineer plans")
- Payment terms
- Any specific conditions (elements not included in the contract or additional details)
Tips for hiring your general contractor
- Make sure that the general contractor has a valid license and liability insurance (minimum $2,000,000) to protect your property and your neighbor’s during construction.
- Check out their portfolio to get a good sense of their experience.
- Review their availabilities to see when work can begin.
- Verify your payment terms.
11 - Begin construction work
The first few days of a project are dedicated to site mobilization. During this time, the general contractor installs protective measures to secure the site and existing installations (e.g., covering floors), sets up temporary services (e.g., on-site lighting), and secures a waste container, among other things. Afterward, when necessary, their team will carry out demolition work before proceeding with the new construction.
Building a house extension involves several stakeholders. Though a general contractor may have to execute part of the construction, they usually work with specialized subcontractors (e.g., electrician, plumber, or excavation company). Their role is to manage build professionals on-site to get the project done. As the primary contractor, they’ll also ensure that construction follows laws, regulations, and building codes.
Establish a communication channel
There’s no such thing as overcommunication during a construction project! As soon as the contract is signed, decide on the most effective communication channel for both you and your general contractor. This allows for regular construction updates, next steps planning, site visit coordination, invoice and payment follow-ups, and change management. We also recommend keeping a written record of your communications to have something concrete to look back on.
Manage mid-project changes
Your scope of work can change during a construction project. These mid-project changes could include additional work (which may incur extra costs) or canceled tasks (which becomes a credit to your contract’s value).
Changes can become a source of conflict if a process for managing them hadn’t been agreed on beforehand. Make sure that any change in the scope of work requires your approval first. This means that the general contractor will need to share the price of the changes before related work can begin so that there are no additional surprise costs at the end.
Review your project scope
Your project’s scope of work serves as a baseline and may change over time. As the project develops, there may be new opportunities or alterations to initial designs. To remain aligned, the scope of work must be reviewed regularly and changes must be communicated to each stakeholder involved in the project.
Monitor the construction schedule
Monitoring a pre-established schedule helps you measure the progress of your project over time. It allows you to identify and document delays if they occur, and plan site visits more efficiently.
Tracking your costs allows you to control your budget and account for expenses. Your budget should have a specific amount dedicated to paying your general contractor and another amount as a contingency. You should also keep track of the amount spent on changes.
Quality control is performed through weekly on-site evaluations to see if work has been completed according to your project’s scope. These visits occur at key moments — usually during structural changes, electrical installation, thermal insulation, waterproofing against moisture and water, or concrete pouring.
12 - Approve the construction work
The end of your home addition is marked by the final approval of the work that has been completed. This process is carried out in two stages:
You’ll need to visit the construction site with the general contractor to see if there are any irregularities or uncompleted work (also known as deficiencies). The contractor’s role is to note all the deficiencies that have been found on the work that they were responsible for.
Transfer of responsibility
Once deficiencies have been corrected, your new home addition is yours! This is when the responsibility for the premises transfers from who was in charge of the project (general contractor) to the homeowner (you). Call your insurer to update your home insurance and add your new home addition since it was covered by the general contractor's insurer until now.
13 - Complete your renovation project
Once work is completed and all deficiencies are corrected, the contractor will have fulfilled most of their contractual obligations. To finalize the project, they must give you a letter of guarantee. Once you receive the latter, you can pay your last invoice, marking the end of your project!
Plans and permits: What you need to know
Any type of home addition or addition will require a building permit and architectural plans. Depending on the complexity of the work, a plan from a structural engineer could be sufficient.
Before deciding on a type of extension, you need to know what’s allowed in your area. For instance, there might be a height restriction in your neighborhood, which will prevent you from building a second story. Or, if you live in a historical area, you might be allowed to build up but only if you maintain the facade of the existing building. There could also be restrictions on the kind of exterior siding you can use, the number of windows you need to install, and egress requirements.
If you’re working with an architect, it’s their job to collect these requirements from your municipality. But if you’re just in the exploration phase and wondering what you can and cannot do, it’s a good idea to visit your local building permit office where you can get information about what type of construction is allowed in your municipality.
If you have your heart set on a particular type of extension or addition that isn’t allowed, you can ask for an exemption or derogation. However, this requires quite a bit of leg work and will impact your project’s timeline. At that point, it might be worth considering another way to expand your home that both meets your goals and complies with local building codes.
Costs of different types of home additions
Like with any home renovation, home addition costs depend on several factors: complexity, size, finishes, and the purpose of the new space. An extension with no plumbing and minimal ventilation or electrical work will be cheaper than creating an extension for a new kitchen or bathroom.
The type of extension is the biggest determining factor when it comes to price. When you’re in the planning and budgeting phases, it’s important to think long-term. A smaller expansion will be more expensive in terms of cost per square foot when accounting for labor and construction materials. So, if you anticipate needing more space in the future, you should consider getting all the work done in one shot.
There are three types of home additions:
Building down: Adding a basement
Average price: $225/sq.ft or $180,000 for 800 sq.ft
Adding a basement is a popular way to expand your home. It’s a good option for building a lounging or entertainment area, additional bedrooms, an office space, or a bathroom. You can also excavate your basement to create an accessory dwelling unit (ADU) and convert your home into a multi-generational living unit for a family member or rental income.
Basement construction involves excavation to create larger windows, a higher ceiling, and legal exits. Many older homes don’t have full-height basements, which makes them less functional than basements that have high ceilings of over seven feet.
A lot of structural work is involved when you dig under a foundation. The home must be stabilized and the foundation strengthened by installing supports during a process called underpinning. By building up concrete walls, underpinning allows you to get more than three feet of space in your basement. Once excavation work is complete, your contractor will build a new foundation, walls, and footings. Since this is a specialized trade, your general contractor will work with subcontractors who exclusively do this kind of work.
If you’re planning to add plumbing to your basement addition, you’ll also need a plumber who can verify where the main water supply and drain are situated. If the drain is above the floor of the newly dug-out basement, you won’t be able to install a standard toilet and shower unless you bring the drain down to below grade. There are options like toilets and showers that pump the wastewater up into the drain, but it’s best to discuss the implications of that option with your contractor.
Building up: Adding a story
Average price: $200/sq.ft or $160,000 for 800 sq.ft
IIf you own a single-family home, building up is often an easier and more affordable home addition — especially if you’ll be replicating an existing floor plan on this new level. For example, placing a new bathroom directly above the existing one allows you to share the same plumbing stack, and lining up radiators and heating vents with their counterparts facilitates construction.
However, some factors can impact the cost and complexity of adding a story. Do you have a flat or peaked roof? Do you share a wall with a neighbor? Is it a concrete wall? Do you want to use the second story for an ADU? A structural engineer and architect will be able to evaluate your current situation and what the possibilities are.
Since building up means altering the exterior of your home, you’ll also have to make sure that there’s a certain visual harmony between the existing building and the addition. Your architect or architectural technologist will keep this in mind when designing your new space.
Building out: Adding an extension
- Garage: $135/sq.ft or $108,000 for 800 sq.ft
- On foundation: $195/sq.ft or $156,000 for 800 sq.ft
- On piles: $160/sq.ft or $128,000 for 800 sq.ft
If you have a backyard, side yard, or a good amount of space in the front of your home, an extension could be the right move for you. You can build a garage-type unit with access from the main part of your home, but use it to house a family room or a powder room. There’s also the option of building a garage for a vehicle and adding another unit on top of it.
When extending your house towards the back, front, or side, your engineer and/or architect will determine if you need a concrete or pile foundation.
- A concrete foundation is recommended if your extension includes a basement or a basement and first floor.
- In a pile foundation, supports (or piles) are driven into the ground to support the expanded footprint of your home. While this is the most cost-effective option, it’s only possible if you want to expand on one floor. If you think long-term and may want to build up as well, you’ll need to pour a foundation.
Does a home extension or home addition add value to your home?
With such a huge project, you might be wondering, “Are home additions worth it?” When renovating your home, consider the potential return on investment from your home addition project if you decided to sell it later. A well-renovated home extension or addition will add value to your home since you’re making your home more spacious, modern, and functional. For instance, if adding another story allows you to market your home as a four-bedroom house, it’s instantly more appealing to families, especially in urban settings or areas with older homes where two or three bedrooms are the norm.
According to Opendoor, an online residential real estate platform in the United States, adding a full bathroom can increase resale value by almost 6%. Depending on the market, increasing your above-ground living space can net you an average of an extra $20,000. However, it’s difficult to put an exact number on the value of your home addition or addition due to all the variables that influence it. If you’re expanding your home to live there, consider the value that renovation brings to your lifestyle, in addition to the value it brings to your wallet.
With the help of some of the best home addition general contractors, Billdr worked with over 100+ homeowners to bring their ideas to life. Licensed general contractors from the Billdr network are fully vetted to ensure high-quality workmanship on your home addition project.