Planning for a DIY Home Addition

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Tackling any DIY home project can be intimidating, but a DIY home addition is especially complex. Planning for your home addition is an integral step in the DIY process because it gives you a chance to outline your addition plans and the costs associated before diving into the project.

The first question to ask yourself when planning a DIY home addition is what the additional space will be used for. In our case, we are welcoming a new baby to the family. Since our home currently consists of two small bedrooms, one bathroom, one living area, and minimal storage space, we knew that an addition was essential.

Planning for a DIY home addition, including home addition placement options, creating a floor plan, and DIY home addition financing options

Placement of the DIY Home Addition

Since we knew we wanted to add square footage to our home that included a bedroom, bathroom, and family room, we began assessing our placement options. Our Craftsman bungalow currently has an unfinished attic, an unfinished basement, and a large backyard. That gives us three building options.

Placing the addition in our attic would mean adding a staircase and dormers. While the project would have been much simpler than constructing a new addition, the attic space wouldn’t have been practical to include a family room or much additional storage space.

Or unfinished basement could have been another option, but that option was quickly discarded for two reasons. One, the basement still gets a little wet after a very heavy rainfall. And the construction of the basement makes completely sealing it from the outside very cost-prohibitive. Secondly, adding a basement bedroom just wouldn’t give us a return on the investment it would take to put into it.

Planning for a DIY home addition, including home addition placement options, creating a floor plan, and DIY home addition financing options

That leaves a final option — building off the back of the house. Before construction began, the home had a large screened-in porch, which would require demolition before moving forward. We also had to remove a tree in the area directly behind the home. Those two items were our only deterrent, so we decided to move forward with a new construction off the back of the home.

Budgeting

The next step in the planning process is to determine how much you have to spend on the project, as well as how much of a return on your investment the project can get.

To determine your spending limits, take a look at the amount of equity you have in your home, how much money you have saved that can be used to complete construction, and your monthly income and expenses. All this information is important in determining how you will fund your renovation.

When creating your budget, it’s also important to determine how your DIY home addition will affect your home’s value after it is complete. To do this, take a look at real estate listings in your area (check out Zillow or Trulia) to find homes with similar features as your finished project.

It’s also important to note that some home renovation projects have higher ROIs than others. Kitchen and bath remodels or additions, for example, have the highest returns (sometimes fetching more than 100 percent of the money put into them). And bedroom and bathroom additions also fetch higher than average returns.

Check out this infographic from BuzzFeed for a breakdown of other renovation ROIs:

Financing Options

While there are several financing options available to homeowners who plan to hire a contractor to complete their home addition, the DIY home renovator’s options are fairly limited. Most home construction loans require a contractor as part of the loan application process.

Planning for a DIY home addition, including home addition placement options, creating a floor plan, and DIY home addition financing options

Here are a few financing options available to the DIYer:

  • FHA 203(k) Rehabilitation Mortgage: The U.S. Department of Housing and Urban Development backs this FHA loan, which is available to new home buyers and current homeowners seeking to renovate their property. This loan option is broken down into two types of loans. The limited version allows up to $35,000 in addition to the home’s mortgage for repairs and improvements. The regular mortgage option only requires that the total amount borrowed fall within the FHA borrowing limit for your area. In both cases, DIY renovations can be done, but you will be required to jump through some hoops before being approved. Check out this article to find out more about the application process for DIY projects.
  • Home Equity: A home equity loan or a home equity line of credit will allow you to borrow against your ownership stake in your home. If your home is worth more than the amount you owe the bank, you can borrow a portion of that excess to fund a renovation project. This type of loan typically offers low interest rates and are fairly easy to qualify for. Again, there are two options with this type of loan: a lump-sum draw and a line of credit. The lump-sum draw allows you to borrow one large sum of money that must be paid back within a designated amount of time. The line of credit allows you to borrow various smaller amounts over a period of time and pay back the loan in smaller increments over a period of several years.
  • Cash: If you’re lucky enough to have excess cash or savings, paying cash for your renovation is the most fiscally responsible financing option. Not only will you avoid any costly interest and other fees, you’ll also walk away from the project without additional debt.
  • Credit cards: Credit cards typically have a much higher interest rate than bank loans, but they can be an option for home renovation projects. Consider looking into cards that have rewards programs to get a little something back from your purchases. Store cards at home improvement stores can be another option if you plan on making large purchases at the same store. For example, Lowe’s offers a 5 percent discount on all card purchases, and Menards offers 2 percent cash back on all purchases.

Check Zoning Ordinances

The next step in the planning process is checking with your town’s code enforcement officer to determine if your renovation project fits within your town’s zoning ordinances. It’s also important to find out if you need any permits or inspections conducted before your project begins.

In our case, our town required a permit and several inspections as the project progressed. We were required to create a floor plan and submit an application and application fee before we even broke ground on the addition. Our first application was denied because the corner of the addition was too close to an existing detached garage. We were forced to make a slight change to our plans before our permit was issued.

Our code enforcement officer is also required to visit our project twice during construction. The first time he came, he approved our footings before the concrete was poured. Next, he’ll inspect the framing.

This approval process is essential in most construction projects. And if you fail to follow your town’s guidelines, you could be subject to fines and your project could be permanently shut down.

Create a Plan

The final step in the planning process is to create a floor plan for your DIY home addition. Check out my step-by-step guide to creating a floor plan here. Our floor plan consists of a master suite, family room, and home office area.

Planning for a DIY home addition, including home addition placement options, creating a floor plan, and DIY home addition financing options

When creating a floor plan, it’s also important to make sure the size of the room and placement of doors and windows work with the types of fixtures and furniture you plan on putting in the room. As you’re considering your floor plan for your DIY home addition, also start looking into the types of items you will include in the room so you can figure out sizing and placement at the same time.

 

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