Bath Remodeling Return on Investment

Tom Kraeutler asks,

What is the return on investment for a bath remodeling project? I have an 18-year-old four-bedroom house (1875 square feet) and want to do a master bath remodel. However, to expand the bathroom I’ll need to take out the master bedroom closet and make the bathroom double in size. To make up for losing the closet, I will take out the small guest bedroom next to the closet and make a large walk-in/sitting room master closet area. Will losing a bedroom affect the value of my house?

Our Answer

Interesting return-on-investment question, to which my answer would be a definite maybe! Bathroom remodels usually have a high return on investment and are generally considered one of the smartest home improvement projects you can do. The 2008-2009 Cost vs. Value Report done by Remodeling Online shows that an upscale bathroom remodeled delivered better than a 70 percent return on investment. This means that if you sold your house within a year of doing the improvement, you’d probably get 70 cents on the dollar for your trouble.
My concern with the bathroom remodel you propose is that even though a greatly improved bath is usually a good idea, you are completing this at the cost of a bedroom. Bedrooms add value to a home, and all other factors being equal, a three-bedroom home will probably be more valuable than a two-bedroom home. Therefore, your elimination of the bedroom to create the closet could impact value in a negative way.
I think the bottom line is that it’s really going to depend on who wants to buy your home. If it is a couple with a growing family, then they may not be too excited about losing that bedroom and devalue the home accordingly. However, if it is a single person or a couple with no kids, the super-expanded master bedroom may be just what the doctor ordered.
To protect your options and return on investment for the bath remodel, I’d make sure that the spare bedroom can be converted back into a bedroom or at least be usable as a nursery, should a future owner have that need.