We’ve just taken down a few derelict outbuildings and built two new ones, and the real estate agent says they’ve definitely added value to our home. But is this always the case?
Outbuildings such as pole barns, summerhouses and carports do add value to your home, with the largest gains coming from home offices and garden studios which add 10% to your property value, and garages up to 80%. Only a humble shed will not add any real value.
Let’s dive down into this topic in greater detail, and discover what types of outbuildings add the most value to your home and why…
How Much Do Outbuildings Increase Property Value?
Various types of outbuilding add different values to your home. Here are some general figures on how different outbuildings can increase property value:
- Shed: generally speaking, this won’t add value. However, in a small property, the increased storage may add a percentage or two
- Outhouse: this depends on the outhouse. If it’s in good condition and is unable or can be converted, yes it may add some value. If it spoils the view or looks on the verge of collapse, no
- Pole barn: size matters. We’ve heard of a pole barn adding $10,000 onto the value of the property.
- Home office: this can add as much as 10%! These days, with home working increasing, this is a big plus, especially if it has electricity, Wi-Fi, and plumbing.
- Home studio: see above
- Garage: oh yes, especially if you live in an urban area. Building a detached garage can give a return on investment up to an astonishing 80%. You may also have the opportunity to convert it into living space one day (read our article about creating living space in the garage first!)
- Carport: this is a risky one. A shiny new carport could add a few dollars to the value of your property. An uglier one will have the opposite effect…
- Summerhouse: these are seen as desirable, and apparently can add up to 5%.
Don’t forget that it’s harder to put a value on “saleability”. If there are two identical properties up for sale, and one already has a couple of handy outbuildings and the other doesn’t, it could give the first property the edge.
There’s another important factor that we’ll look at further on: can the outbuilding be used to make money? A pole barn that can be leased out or a home studio that allows you to set up a new business could be really valuable assets when it comes to making your property work for you.
And of course, never forget that you live in your home. If you think you need a new shed, or a carport, or a chic new summerhouse, then go for it. After all, you need to enjoy living there.
How Much Value Does an Outhouse Add? (Summerhouse or Garden Building)
Generally speaking, a garden building such as a summerhouse could add up to 5% onto the value of your property. Therefore, you need to work out the cost of the project versus the value of your home.
You may need to use the services of your friendly neighborhood realtor to establish an estimated value of your property before you commit to your new outhouse.
Again, there are a lot of variables. A summerhouse in a large garden in a warm climate will naturally be more desirable than a cramped building that can’t be used for half the year. Be sensible, and as well as that valuation, ask yourself whether a summerhouse feels like an asset or not.
Will a Shed Increase Property Value?
We’ve done a bit of research around this, and it seems that the typical shed doesn’t add any value. The only real exception is if your home is small or lacking in storage, and a shed provides just a bit of extra space.
If you want your shed to be a desirable addition to your property, make sure it’s on proper foundations, is a decent-quality kit or build, and that you look after it well. Putting up your own backyard shed? Watch this short film about how to build a foundation for your shed. It really is very important.
As we mentioned earlier, someone who’s hoping for outbuildings will be pleased to see your shed and it could make your place more appealing than another property. If you’re lucky enough to have a big garden, a shed will pretty much be expected (and any gardener will definitely be delighted to encounter a shed in good condition.
Does Building a Barn Increase Property Value?
It seems that the general consensus is that a pole barn will increase the value of your property, but no-one ever commits to an amount… We’ve read about pole barns adding four figures to a property’s value, but as ever, there are factors to take into account here…
In a rural area, large-scale outbuildings are almost expected. If you have a lot of land but no barn, this could be off putting to some purchasers. As with summer houses and sheds, a barn needs to be in good condition, solidly built, and in keeping with the property’s scale.
One positive about adding a pole barn, according to the IRS, is that the cost of the build is deducted as a capital expense when you sell the property. This allows you to pay less in capital gains tax.
Another common question is can you convert a barn into living accommodation? The answer is, provided it’s structurally sound and you have the right permissions, yes you can. Read our article about converting barns into living space to find out more about costs and processes.
Does a Home Office Add Value To Your Home?
A home office, provided you have the space, can be a real plus. Yes, it doesn’t count in the square footage of your home, but it does create an extra room. If you’ve already used up all the extra bedrooms in your house and still need a study or office, this is a great way to add a whole new room.
We’ve heard that a well-constructed garden office can add up to 10% to the value of your home. To maximize your ROI, it needs to feel like a “real” room. You’ll need electricity, possibly plumbing, and certainly internet access. Sticking a few shelves in the shed definitely doesn’t count.
When you’re working on home improvements, you need to think about desirability as well as value. The past couple of years, we’ve all been working at home more. The idea of a separate office, away from the kids, the pets, and the general noise of family life, is very attractive (both to potential purchasers and to you!).
There’s also a possible business benefit for you. Have you been wanting to set up a business from home, but haven’t been able to? A new HQ at the bottom of the yard could be the solution you need to get you started. Shedquarters, if you like.
Does a Backyard Studio Add Value?
Much the same as an office, a backyard studio appeals to people who need to work from home, who run their own businesses, or who operate as freelancers. A studio tends to be larger than an office, but otherwise, it’s all pretty similar.
You could rent out a studio to a local artist or designer, or if it’s large enough, as a fitness or yoga studio. It could become a studio apartment as a rental or holiday home, or even a place for your elderly parents to live.
Of course, all of these ideas are dependent upon making sure you get the necessary permissions to build a new studio or convert an existing outhouse into one. Without the paperwork, your new studio would be the opposite to an asset…
Our garden office and studio have been a great investment in the overall value of our property, but you have to be careful that the cost of construction does not outweigh the added value if you’re intending to market your home on completion of the project.
However, if there’s clear profit to be made or you’re going to stay in the property for many years to come – then our advice is go for it if you have the funds.
Our new outbuildings not only added value but were great fun projects to be involved in too. 🙂