I received a note from someone the other day asking how much it would cost to add a room to an existing house. She was interested in the “cost per square foot” for budgeting and planning purposes. She also asked what the best options might be. Figuring the cost of building a new house based on a cost per square foot is a tough thing to do because there are so many variables. Additions are even tougher to estimate. You could spend anywhere from $100 per foot to over $1000 per foot. It all depends on the complexity of the addition, the way it is built, the level of the appointments (finishes, fixtures, etc.), the construction materials used, and the location in which it is built.

Can you compare an addition of a simple room with no plumbing or special features with the cost of a kitchen addition full of cabinets, countertops, plumbing fixtures, and appliances? The kitchen addition could cost twice what the simple addition would cost based on the “cost per square foot.” What if an addition was to be built on flat land, clad in vinyl siding, and contained only a couple of simple windows. It would be much less expensive than an addition built on sloping land, clad in fieldstone, full of high-end windows, and included a soaring ceiling. Comparing the cost of these two projects would be like comparing apples and oranges.

While the “cost per square foot” method is a flawed way of estimating construction costs, it is the only tool we have for preliminary estimating. Builders do not use this method for calculating the actual cost of your project. In my book, Designing Your Perfect House, I discuss this in some detail. Here is a short excerpt:

“The “cost per square foot formula” is not, I repeat, not the method your builder will use to establish the actual cost of your house. These figures are determined after the builder has calculated every piece of the building, how many pieces of plywood, how many bricks, etc., added up those costs, added in the labor costs, added in his overhead and profit, and come up with a bottom line number. Then, most builders will go back and divide their calculated price by the number of square feet to see what the “cost per square foot” is. They can then compare this number with similar numbers for recent projects they have built to see where you stand relative to those.”

If you want to get a rough idea of what your addition will cost, you have to find comparables, just like appraisers do when they are placing a value on a house. Talk to some local builders and ask them to show you similar projects they have built. Look for projects that match your scope, level of detail, and the types of things that were included. Pay attention to the way the addition attaches to the existing house. The more the existing house has to be altered to accept the addition, the more the project will cost. Once you find some comparable projects and you learn what they cost per square foot, you can apply that cost to your project with some modest level of confidence. Be sure to add something for inflation in costs from the time the other project was built until now. Costs never seem to go down so there is no reason to think your project will cost less. Although in these economic times, you can find some pretty good deals in construction.

Asking several local builders will give you a rough idea of what to expect in terms of cost for your addition. Even though their answers will vary, their opinions can help guide you. But keep in mind that until you actually design your addition, draw up good construction plans and select the items to be included, no one will be able to give you a precise cost for your project.

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