Considering an addition to house

Question: My husband is 75, I am 70. We recently downsized from a large home and property in the country. We feel we are one room short where we purchased and would like to add on a family room.  We have a large family and get-togethers are a little cramped in our new home. Is it wise to add on a $50,000 addition at this stage of our lives? I know we will enjoy  it for however long we may have to live in it. Will we get part of our investment back if we have to sell it for maybe health reasons? We are in good health at this time. We can pay for the addition, or would we be wise to mortgage it? – H.D.


You have to decide which priority is most important to you – lifestyle or financial return. It is unlikely that you would recover the full cost of a $50,000 addition to your new home, however a local real estate agent would be in a better position than me to advise you on that. However, if the property is well-located and the addition is in harmony with the existing house, you should recover some of the investment.

But is that your most important concern, or does a more comfortable lifestyle and the likelihood of seeing the family more oen take precedence? Another lifestyle issue to keep in mind is the disruption you will have to endure while the addition is being built, which may take several months.

It appears that you have the money to finance the extra room, so if you decide to go ahead I suggest that you use it rather than take out a mortgage. Look at it this way. If the mortgage interest rate is 5 per cent, you would have to find somewhere to invest the money that would generate an after-tax return of more than that amount in order to come out ahead. That’s very difficult to do these days. – G.P. (Aug. 2003)