The Cost-Benefit Analysis of Adding a Sunroom to Your Investment Property

neutral color sunroom with rattan furniture

Are you a home investor looking to add value to your investment property? Do you want to attract high-quality tenants or buyers and stand out in a crowded real estate market? If so, you might be wondering whether adding a sunroom to your investment property is worth the investment. In this blog post, we’ll take a deep dive into the cost-benefit analysis of adding a sunroom to your investment property. By the end of this post, you’ll have a clear understanding of the potential financial benefits and ROI of adding a sunroom to your investment property.

Cost Benefit Analysis of Adding a Sunroom to Rental Property

A sunroom is a beautiful and versatile addition to any home. It’s a space that can be enjoyed year-round, providing a comfortable and relaxing environment that lets in natural light and provides a connection to the outdoors. As a home investor, adding a sunroom to your investment property can offer significant benefits, including increased property value, enhanced marketability, and the potential for higher rental or sale prices. But before you invest in a sunroom, it’s important to consider the costs and potential return on investment.

Initial Investment Costs

Adding a sunroom to your investment property is a significant investment that requires careful consideration. The costs of materials, labor, and permits can vary depending on the size and complexity of the project, as well as your location. According to HomeAdvisor (link), the average cost of building a sunroom in the United States is around $15,000 to $22,000, with higher-end projects costing upwards of $70,000. However, the initial investment costs are just one factor to consider. It’s important to look at the long-term return on investment and how a sunroom can increase the overall value of your investment property.

Ongoing Maintenance Costs

While a sunroom can offer a variety of benefits, it also comes with ongoing maintenance costs. Weather and climate can impact maintenance expenses, so it’s important to factor this into your budget. Typical maintenance expenses associated with sunrooms include regular cleaning, repairs, and replacement of damaged parts. The exact maintenance costs will depend on a variety of factors, including the quality of the materials used, the type of sunroom you have, and the local climate. However, it’s important to remember that the benefits of having a sunroom can far outweigh the ongoing maintenance expenses.

user submitted solarium sun room

Potential Increase in Property Value

One of the biggest benefits of adding a sunroom to your investment property is the potential increase in property value. A sunroom can add significant value to your investment property, making it more attractive to potential buyers or renters. According to one investor, we spoke with his return on investment for a sunroom addition is 50.7%. The exact increase in property value will depend on a variety of factors, including the quality of the materials used, the size and design of the sunroom, and the local real estate market. However, adding a sunroom can offer a significant return on investment.

Increasing Square Footage

The investor we interviewed lives in Arizona, and he currently gets $1.25 per square foot of the home. So his 1000 square foot home would rent for $1250 per month. This has greatly increased during the pandemic when it was less than $1.

Because of this increase in budget additions like sunrooms or screened porches that can count as liveable space can drastically yield higher rents and fantastic returns. A 10 x 8 standard grade sunroom will cost about $10,000 to build, and it will add more than $100 per month in rent.

If you were to borrow all $10,000 with a 3% interest rate, the payment amount would only be $42 which would net a profit of $58 per month. It’s also easy to recoup the cost of the sunroom when or if you choose to sell the home. Even at an astoundingly high-interest rate of 7.5%, the addition is still positive with a $25 per month profit.

Because people are getting roommates to help with rent, this also creates a higher demand for the property. We are huge fans of adding sunrooms to rental homes.

Enhancing Property Marketability

Another major benefit of adding a sunroom to your investment property is the enhanced marketability of your property. A sunroom can make your property stand out in a crowded real estate market, attracting high-quality tenants or buyers who are looking for a unique and comfortable living space. Sunrooms offer an extension of the outdoors and allow for a relaxing and comfortable environment, no matter the weather outside. Consider adding extra features, such as comfortable furniture or a built-in fireplace, to make your sunroom even more appealing.

sunroom with wicker furniture and deck

If you choose to add a sunroom to your rental home, we highly suggest including this in the information on the property. This will make a great reading nook or multiple-purpose room. We spoke to one person who enjoys the sunlight, and this was a huge plus for her. This is one of the most cost-effective home improvement projects especially if you go with vinyl flooring.

Conclusion

Adding a sunroom to your investment property can be a smart financial decision that offers significant benefits for home investors. While the initial investment costs and ongoing maintenance expenses may seem daunting, the long-term benefits of having a sunroom are worth it. Not only can a sunroom increase the overall value of your investment property, but it can also make your property more marketable and attract high-quality tenants or buyers.

In addition to the financial benefits, a sunroom can also offer a variety of lifestyle benefits for your tenants or buyers. A sunroom provides a beautiful and comfortable space to relax, read, work, or entertain guests. It can also serve as a unique and beautiful extension of the outdoors, offering natural light and a connection to nature that can improve overall well-being and mood.

elcosed patio as formal dining room

When considering adding a sunroom to your investment property, it’s important to work with a professional contractor or builder who has experience in designing and constructing sunrooms. They can help you choose the best materials and design elements that fit within your budget and complement the existing architecture of your property.  We’ve also written a complete guide to sunrooms if you’d like to hear more from us about them.

A sunroom can be a valuable investment for home investors who want to increase the value and marketability of their investment property. While the costs of adding a sunroom can be significant, the long-term benefits can far outweigh the initial investment. By providing comfortable and unique living space, a sunroom can attract high-quality tenants or buyers and provide a significant return on investment.

Last Updated:September 05, 2023