Working from Home: Is a Home Office Remodel Worth the Investment?

When the pandemic hit three years ago, working from home became all the rage. Suddenly, the home office was hotter than ever. But many homeowners have gotten by with work-from-home spaces that are less than desirable. To improve spatial efficiency and productivity, many are considering a home office remodel but wondering how much it will cost and if it’s worth the expense.

Read on to learn reasons for remodeling a home office, how much value it adds, average home office remodel costs, proper budgeting, financing options, and more.

In this article (Skip to...)

• Reasons for a home office remodel
• Who should remodel a home office?
• Value added by an office remodel
• Remodeling considerations
• Value adding features
• Home office remodel cost
• Paying for a home office
• Home office remodel FAQ

Why adding or remodeling a home office is a good idea

Chris Sebilia, construction director at Item 5 LLC, a construction firm that handles plenty of home office remodels, says this project is worth it.

“Having a dedicated workspace in your home can help you stay focused and productive. A well-designed home office can provide a comfortable and inspiring environment that promotes creativity and concentration,” he says. “Working from home can also provide more flexibility and autonomy, allowing you to better balance your work and personal life.”

Having a separate room with a door where you can focus on work “can also reduce distractions from potential noise or other activities happening in your home,” says Jasen Edwards, chair of the Agent Editorial Board.

According to the National Association of Realtors’ (NAR) 2022 Remodeling Impact Report, 54% of homeowners who added a new home office said they experienced better functionality and livability; 33% embarked on the project to add features and improve livability versus 25% who wanted to improve organization/storage or customize their home to their tastes.

Good candidates for a home office remodel

Full-time remote workers, telecommuting employees, freelancers, entrepreneurs, and those who work from home part-time are worthy prospects for a home office remodel.

“Additionally, those who frequently work on creative projects or require a quiet space to focus can benefit from a customized home office, including writers, artists, designers, and other professionals,” adds Sebilia

How much value does a home office remodel add?

Sebelia claims that adding a home office could substantially increase the resale value of a property. In addition, a 2020 HomeLight survey indicated that adding a home office can offer an 87% return on investment.

“The impact of remodeling a home office on your resale value will depend on a variety of factors. These include your home’s location, the size and quality of the office, and the overall desirability of your home,” Edwards notes.

Factors to consider before a home office remodel

It’s wise to think through several criteria before taking the home office remodel plunge.

“First, budget is a crucial factor. Determine how much money you can borrow or pull from savings to allocate to the project. This includes factoring in the size and layout of the home office as well as any additional features or amenities that may be required,” recommends Sebilia.

Give pause to the project scope, too. Think about the footprint of your space, the extent of remodeling you want to accomplish, and the desired outcome.

“Determine a timeline for your project. This will help you plan your resources and ensure that the project gets done in a timely manner,” suggests Edwards.

Additionally, decide if this can be a DIY project or one that you must hire a professional for. The former option can save money but may lead to regrets if you make mistakes or produce inferior workmanship.

“Give thought to the long-term benefits of the project as well. A well-designed and functional home office can increase productivity and improve the overall value of your home,” Sebilia adds.

Features that add the most value to a home office remodel

Mike Qiu, owner of GoodAsSoldHomeBuyers.com, says the features that add the most value to a remodeled home office include proper lighting, comfortable seating, ample storage, quality technology, and privacy.

“A well-designed layout and desirable aesthetics can also create a professional and inviting space,” says Qiu.

Edwards recommends choosing ergonomic furniture that’s comfortable, including adjustable chairs and desks, as well as necessary storage solutions like filing cabinets, shelving, and drawers.

“Also, ensure you have the necessary technology to make your home office productive. Invest in a quality laptop or desktop as well as peripherals like a printer, scanner, webcam, and external monitor,” he says.

How much does it cost to add or remodel a home office?

According to HomeAdvisor, turning your garage into a home office will likely cost you between $5,000 and $15,000. Your total tab on the remodel could range between $5,000 and $22,000. Depending on the type of remodeling, you can expect to pay $50 to $200 per square foot for your home office renovation.

“The size of your home office will have a big impact on the cost. In my experience, the low end of the range for a small office would be at least $2,000 versus $50,000 or more for a high-end home office remodel,” says Sebilia. “The materials used in the remodeling will also majorly impact the cost. High-end materials like hardwood floors, custom cabinetry, and upscale lighting fixtures will cost more. And if you want a built-in bookshelf, a fireplace, or a custom desk, expect to pay a lot more.”

How to pay for a home office remodel

There are many ways to fund a revamped home office setup worth exploring. If you don’t plan on paying out of pocket from your savings, consider the following financing options.

Home equity loan

A home equity loan is a type of loan that lets you borrow against your home’s cash value, often at a low fixed interest rate. Also referred to as a “second mortgage,” a home equity loan is typically a smaller, second loan taken out in addition to your current mortgage. This lets you to tap your home’s value without changing the rate or terms on your primary mortgage. You can also take out a home equity loan if your home is fully paid off and borrow only the amount you want to cash out.

A home equity loan can be an attractive choice because it often offers a lower interest rate than other debt types, including personal loans and credit cards. Be aware, however, that since your home acts as collateral, missing loan payments could result in foreclosure.

Home equity line of credit (HELOC)

A HELOC works somewhat like a credit card. It’s a revolving line of credit that has a maximum spending limit. You can draw on the line up to your credit limit whenever you need cash. Your available credit is replenished as you pay down the balance (with interest).

But you can only draw from the credit limit for a set amount of time (known as the “draw period”), after which time you can no longer borrow money and must repay the outstanding balance. Also, HELOCs are “secured loans” that require using your home as collateral. In exchange, you may get a lower interest rate than you would for a personal loan or credit card; however, there is the threat of foreclosure if you don’t make your loan payments.

Personal loan

Known as a signature loan, a personal loan is an unsecured loan. With this kind of loan, you don’t need physical collateral—such as your home—to secure repayment. Instead, the lender commonly only requires your signature and pledge to repay the loan.

Fortunately, it is often easy to qualify for a personal loan for a home office remodel. Even better, you might get the money within a matter of days. However, a personal loan is considered riskier for the lender. That’s because no collateral is needed. Consequently, they may charge a higher interest rate on a personal loan than they would for a secured loan like a home equity or auto loan.

Furthermore, personal loans may put your credit score at risk. That’s true if you don’t pay back the loan on time or abide by the loan terms. If your credit score drops, it may be tougher to get other types of credit in the future.

Cash-out refinance

A cash-out refinance replaces your current home loan with a new, larger mortgage. The difference between your new loan amount and your old one is returned to you as cash back at closing. A cash-out refi allows you to tap the equity in your home and use it for any purpose you like, including remodeling a home office. It’s a good way to access a large sum of money at a competitive interest rate.

But cash-out refinance rates are slightly higher than traditional mortgage refinance rates. Your refinance rate will depend on your credit profile and how much cash you take out. You can usually cash out up to 80% of your home equity. Additionally, your new loan will be larger than your old one, so you’ll pay more mortgage interest in the long run. But since mortgage rates tend to be lower than personal loan or credit card rates, cash-out refinancing can be a better way to finance a large transaction like a home office remodel.

Credit cards

The easiest, quickest, and most convenient way to fund your home office remodel is to use new or existing credit cards. Depending on your card’s borrowing limit, you may be able to charge thousands that can go toward your project. However, that will come at a steep price, as many credit cards charge the highest interest of all forms of financing unless you repay your balance due in full early on.

Check out credit cards offering a 0% introductory APR for a limited period, which can be a smart option if you intend to repay your outstanding balance relatively quickly.

The bottom line

Assuming you qualify for any of the previously mentioned borrowing options, investing in a revamped home office is worth the time and expense, especially if you want to work or run a business from home.

“However, careful planning and consideration of costs and financing options are crucial before pulling the trigger on this project,” Qiu says.

Home office remodel FAQs

How much does an average home office cost?

The price tag involved with remodeling a home office can vary considerably, depending on the scope of your project, chosen materials, if you plan to do the work yourself or hire a pro, and other factors. A home office remodel could cost you around $100 per square foot, with a total project cost ranging between $5,000 and $22,000, according to HomeAdvisor.

Does a home office increase property value?

There’s no guarantee that having a home office will increase your home’s resale value, but some data suggest it could. Per the National Association of Realtors, adding a home office could increase the resale value of a property by up to $33,000.

Is it worth having a home office?

Whether or not to add or remodel a home office is a personal preference that will depend on your budget, job goals, lifestyle, and other factors. But experts agree that a designated home office can increase work productivity and efficiency, prevent distractions from other areas of the home, and enable you to run a business or work from home.

Is a HELOC a good way to pay for a home office remodel?

A home equity line of credit (HELOC) can be a great option to finance your home office remodel. Because it’s a revolving line of credit (with a maximum spending limit), you can draw on the line up to your credit limit whenever you need cash. As you pay down the balance (with interest), your available credit is replenished. However, you can only draw from the credit limit for a set amount of time, after which you can no longer borrow money and must repay the outstanding balance. Also, you can lose your home if you don’t make your HELOC repayments as promised.