Buying a Small House and Adding On

There is construction everywhere in Redwood City right now. Along with all of the redevelopment downtown, there are also projects happening on nearly every block in residential areas. And it's definitely not all developers. Many people who bought a small house several years ago — probably in a location they love — have outgrown the space. But instead of searching for a new house, they are turning their existing house into the home they want.

I think this trend is happening because in order to sell your house and buy something else, you might be making compromises on location, layout, or design. Having to pay a premium price for a larger house you're just not in love with isn't all that appealing.  Consider this: why pay $1,000+/- per square foot for a house or neighborhood that you're not in love with when you could buy a smaller house (still at $1,000+/- per square foot) and add on for $300+/- per square foot. At the end of the day, it will likely cost less (this all depends on where you live, who you hire, and what your needs are, of course) and you get to customize the floor plan and finishes just the way that you want. 

I've been seeing this a lot in our neighborhood. 216 Grand was purchased for $1,270,000 in May 2015 as a 1,410sf home and completed in April 2016 as a 1,985sf home. It is currently listed for $1,849,000.  264 Grand and 263 Hudson were also recently purchased and are undergoing similar expansions. 

The advantages to buying a small house and expanding:

  • You can focus more on buying a house in a good location rather than finding the perfect house.
  • You get to customize the house for your family, lifestyle, and taste.
  • Your property taxes will be lower, though they will be reassessed after adding on.

However, it's not for everybody. Here are some disadvantages to buying a small house and expanding:

  • The process is going to take about a year (plus or minus, depending on how savvy you are).
  • You will most likely have to live somewhere else during construction. (Unless you're cool with living there while part of the house is under construction or pitching a tent in the backyard.)
  • It's a stressful process and you'll do well to have the expectation that it will take longer and cost more than you think.

If you decide to go this route, here are key things to keep in mind:

  • You'll need to hire an architect/designer, civil engineer, structural engineer, soils engineer, and contractor(s).  
  • There are a lot of moving parts and it can be challenging getting everyone working together smoothly.  
  • The planning/building department, fire department, utility companies, and public works are another component and they all need to approve your plans before you start building.
  • The weather/rain can hold things up (more so in some years than others).
  • There are always surprises.

PS. Check out our FAQ on neighborhoods in Redwood City for a better idea of locations, our post on buying smart in Redwood City and the biggest dilemma I'm seeing home buyers face.


Cliff Whearley has been a resident of Redwood City for 23 years. He is a Realtor at Dwell Realtors, Inc. and has been practicing real estate since 2007. If you have any real estate questions, he would love to help!