If you’re looking for a high-payback remodeling project and don’t mind making a big investment in your home, look up. Transforming an attic into a bedroom with a bathroom is the most expensive but the third highest-paying project cited in the 2010-2011 Remodeling Cost vs. Value Report, an annual survey conducted by Remodeling Magazine that provides a measure of how much your remodeling dollar will fetch at resale. Despite a price tag topping $50,000, the attic bedroom and bath addition took third place because of its surprisingly strong 72.5% return at resale.

One possible reason for the high value placed on this economic outlier of a project, suggests Remodeling Magazine’s Sal Alfano, is that it may be the least expensive way to add a bathroom and bedroom, and it responds to a national trend to economize by doubling up. “More people are looking to add this space because of boomerang kids’ and grandparents’ moving in. The economy is affecting people in new ways, and suddenly an expensive remodeling project like this reflects surprisingly strong consumer demand because it ultimately saves money,” Alfano says.

A strikingly modern attic remodel added much-needed space in the San Francisco home of architect Jim Zack of Zack/de Vito Architecture. At the time, the architect had to pinch pennies while remodeling his 1912 Edwardian flat, so he used ordinary materials in unexpected ways: for example, metalworking goods and profiles purchased at The Home Depot. The effect is strikingly original and high-end, although it really didn’t cost any more than standard wood trim, Zack says. Photo by Jim Zack

This is good news for remodelers and dreamers alike: Nothing provokes the architectural imagination so much as an unfinished attic with plenty of headroom. But attics can be tricky to remodel because their floor joists may not be up to modern rigidity standards, those appealing rafter ceilings may have low-slung collar ties that block all that apparent headroom, and the roof rafters may not have sufficient depth to accommodate the necessary insulation.

Overcoming common challenges
Collar ties are easy enough to deal with, but floors can present a challenge (see "Attic Remodeling: Floor and Ceiling Tips"). Another formidable challenge involves insulating the roof rafters. Many old houses have 2x4 or 2x6 rafters, neither of which provide the minimum 9 in. of insulation space required in most areas of the United States. You’ll have to add depth to the rafters by laminating the 2x-boards so they are wide enough to accommodate the required minimum — for example, adding a 2x3 to the edge of every 2x6 will (just barely) accommodate R-19 insulation. However, most codes now require R-30 to R-45. One way around this problem (albeit an expensive solution) is using closed-cell foam insulation. This type has the highest R-value per inch of any available home insulation product, averaging a whopping R-6.5 per inch and achieving over R-35 in a 6-in.-deep rafter bay.

Before (left): The architectural possibilities of this attic may not strike you immediately. The window dormer looks small and tunnel-like, and the walls are low and cramped. But a little creative remodeling can turn a forgotten space under the eaves into an inviting bedroom or retreat. After (right): The window now adds a strong architectural element, and the angled ceilings create     visual interest. Photos courtesy SawHorse Construction, Atlanta, GA

For the attic to qualify as living space and not just nicely finished storage, it must have a code-compliant stairway, and at least 60 sq. ft. of the living area (or half of the room, whichever is greater) must have ceilings that are at least 7 ft. 6 in. high. You can sometimes accomplish this by adding shed dormers, or windows that pop out of the roof. You’ll need the light and ventilation anyway, and the creative niches and oddly configured spaces in a well-designed attic addition are what give this space its magical appeal.

If you will use the space as a bedroom, a few other restrictions apply, such as a minimum room size of 70 sq. ft. and a minimum width of 7 ft. You wouldn’t want a bedroom smaller than that anyway. On the other hand, it’s easy enough to turn a “bedroom” into a “loft,” if creative naming will buy you a little building-code flexibility.

An additional benefit of finishing the attic is that it offers an excellent opportunity to upgrade insulation, seal air leaks and improve your home’s energy profile. If you make the most of this opportunity, your remodeling efforts may yield dividends every month (in significantly lower utility bills) in addition to the money you’ll recoup at resale.

Before converting the attic into a master bedroom, Ritch Paprocki had to reframe the existing ceiling joists with 2x10s to accommodate added insulation.

-- Handyman Club Life Member, Fernando Pagés Ruiz, is a homebuilder and remodeler with 30 years’ experience and the author of Affordable Remodel: How to Get Custom Results on Any Budget (The Taunton Press, 2007).