Home Expansion Costs: Building Up vs Building Out

The PropertyClub Team
Jul 10th 2020
How much does it cost to add on to a house? That depends on many factors, including location and if you're building up or out. In this article, we'll explore what's cheaper, as well as the pros and cons of each option.

In many real estate markets, it’s hard to ignore the state of constant construction. Everyone seems to want to build things up all around them. This is especially true of homeowners who want to add more value to their property or just add some extra space. The thing is, adding onto a house and building additional rooms isn’t exactly cheap.

To make things easier, people often add a little strategy to their building. That’s why they tend to look at the cost of building upwards, versus building outwards. The problem is, it’s not always easy to figure out which is cheaper. So, what’s the deal? 

Why Should You Expand Your Home?

Ask any homeowner who’s currently doing an addition onto their home, and they’ll probably give you a different reason for wanting their expansion. There’s no one-size-fits-all reason to expand a house. Some of the more popular reasons include:

  • Expanding the family- Many home addition projects get their start from having another child or deciding to make the switch to a multigenerational home. 
  • Increasing property value- Bigger homes are generally seen as being more desirable and can command a bigger price tag.
  • Getting a home office- If you work out of your home, you might want to get a room that’s entirely dedicated to it. This is one of the few ways to make an expansion into a tax advantage for you.
  • As a treat- Sometimes, people want to expand their homes because they’ve always wanted a dedicated room for themselves. Who wouldn’t want their own hobby room?
  • Keeping up with the neighborhood- Let’s face it. No one wants to be the tiniest house on the block. If everyone else is expanding, it’s safe to say you might feel the pressure to do so, too. 

Is It Cheaper to Build Up or Out?

This is a tricky question that often has a lot to do with the price of real estate and labor in your area. In most areas, building outwards is significantly cheaper than trying to build upward. This is because building upward requires more labor, more materials, several permits, as well as the help of a structural engineer.

Because of the extra labor and materials required with building upwards, the only time you can safely assume it’s cheaper is when you’re dealing with extremely high-priced land. Even then, you still might find yourself asking others, “Is it cheaper to build a second story or build out?” 

If you can buy land to build out with, do it. There are only a handful of areas where buying land can become a significant issue, and most of them are cities. So, if you have a house in Brooklyn or Manhattan, you might be better served by building upwards. 

Why Is Building Up So Expensive?

It’s all about stability and safety. Simply put, it takes a lot more effort to make sure a home stays stable with several thousand pounds added on than it does to add another room on solid ground. Not all homes are sturdy enough to expand upwards without additional help, while there are no such concerns when building out. 

Extra Labor

Because building up means that you’re tacking on an extra room or two to your first floor, there’s a good chance that you may need to add structural support to keep your home stable. You also will need to have a structural engineer check out your home to see whether or not you will need to do any additional repairs. 

Moreover, it’s important to realize that building up also means removing the roof and parts of the home that are already there. Since this is more involved than your typical outward move that may just require demolishing a wall and removing siding, your labor costs will also increase.

Extra Materials

No matter what your extra room will be used for, there will be certain things that you will need to buy that wouldn’t be necessary for outward expansion. For example, a typical first-floor expansion will not need stairs, additional support beams, or materials that involve adding extra sturdiness to your flooring. 

When you have an upward expansion, you’re going to need those things. With regular outward additions, all you really have to worry about are the basics—like electrical wiring and plumbing. This makes building outward a lower-cost endeavor in most cases.

Permit costs

No one likes to think about permits, but they do have to be considered when working with a remodeling project. Since there is an inherent risk with building upwards, most cities will require additional permits and inspections to make sure that everything is safe. This, too, adds on money to your price tag. 

How Much Easier Is It To Expand Outward?

Barring any sort of major permit obstacle or a lack of land, most people find expansions outwards to be a far easier type of renovation to work with. Here’s why:

  • Less money needs to be spent- This is the biggest thorn in most peoples’ sides, by far. You will need to spend more on labor, stairs, and other materials if you want to build up. If you can get a better deal expanding outward than upward, why wouldn’t you take it? 
  • Planning is more straightforward- If you dislike having to jump through hoops to get stuff going, then building out is almost always the better choice. Even planning how you’re going to be able to add additional structural boosters can take a while!
  • Fewer repairs need to be made- When you build up, you often have to repair the wear and tear that occurred on your existing structure before anything else can be done. This usually eats up both time and money.
  • Expanding upwards usually takes longer- Because of all the added work (structuring, roof removal, etc.), opting for an upwards expansion can take several months longer than an outward expansion. 
  • Attaining permits is usually easier, too- Townships are well aware of the issues that come with building up instead of building out. As a result, permits are often harder to attain, with some areas going so far as to ban building up entirely. 
  • Most people have enough land to add an extra room or two- It also comes down to availability. In most cases, people have enough space to build out. This means a lot less hassle. 

How To Choose Your Expansion Style

Obviously, the perks of building out are very real, but building out isn’t for everyone. Even if it is the cheaper option, there are certain moments where building up might be a better option. For example, if you don’t have the land or building out would turn your home into an eyesore, upwards is a better choice. 

At times, building outwards just won’t be feasible. For example, if your township has a law that bars the use of additional land for home expansions, building upwards may be the only way to get the extra room you want. 

The Final Take

Is it cheaper to build up or out? Well, for most of us, the answer is that building your home outwards is going to be the more affordable option. However, having it be the cheaper choice doesn’t mean that it’ll be the best possible solution for you. 

Like with any other major remodeling decision, determining whether you build up or out is a very personal choice that needs to be weighed heavily. So, while the price is a factor, keeping in mind local laws, land availability, and permits can be just as important.