Do you want to increase the value of your property but don’t want to spend thousands?
Investing in outbuildings may be exactly what you are looking for. Portable storage buildings, workshops, garages… some of these structures can add value while solving your storage needs.
But not all outbuildings will increase property value.
This post is going to dive into exactly which structures make financial sense for you to invest in.
Let’s cover…
- Why Outbuildings Are Smart Property Investments
- Which Structures Add Value
- How To Determine ROI Before You Build
- Mistakes That Decrease Property Value
Before you buy or build an outbuilding, make sure it makes financial sense.
Why Outbuildings Are Smart Property Investments
Additions to properties don’t always have to be full remodels.
Sure, kitchens and bathrooms play a large role in your property value. But garage builds and storage sheds can increase value as well.
Here are the statistics that prove it.
The global market size for outbuildings was projected to reach $1.4 billion USD by 2024, and is growing at a rate of 2.6% annually. When you hear numbers like that, it’s hard to ignore the demand for structures like storage sheds, workshops, and garages.
Don’t overlook why everyone is jumping on the building trend.
Homebuyers crave storage space. Having enough space to store your stuff is high on many buyer’s checklists. Overflowing garages lead to clutter. Cluttered garage means you need somewhere to put your stuff.
That’s where storage buildings come into play.
Install a storage building or workshop on your property and watch your storage woes disappear. Not only will you have more space, but you’ll increase your property value if you take the correct steps.
One big question remains…
Does size matter?
If you build a small metal shack in the corner of your yard, most appraisers won’t even give it a second glance. But add-on structures that are built properly can boost your home value.
Portable storage buildings built with quality pole barn construction should have foundations. Having a structure sit on concrete allows it to become permanent. This is something appraisers take into consideration.
Storage buildings that are permanent count as square footage on your property.
Which Structures Add Value?
Now we know that storage buildings can increase home value. But which buildings should you focus on? Garages? Sheds? Chicken Coops?
Truth is some outbuildings add more value than others.
We covered garages above, so let’s take a look at sheds and other structures.
Detached garages make up about 40% of the outbuilding market. That means sheds come in second and make up almost 30% of the market!
Storage sheds are huge because they hold clutter. You can significantly decrease the junk in your home by investing in a quality storage shed.
Well-constructed storage sheds can actually add 1-2% to your overall home value. That doesn’t sound like a lot until you do the math. A home valued at $400,000 would increase by $4,000 to $8,000 thanks to a shed.
Could your shed use a few upgrades?
You may be close to hitting the million-dollar mark just by adding some storage.
Multi-Purpose Structures
Remember how I said the size of your shed doesn’t matter?
Well, that only applies if your shed serves more than one purpose.
People love space. More rooms means more opportunities to utilize your home. When you build a man cave outbuilding, you’re giving homebuyers an opportunity to craft their own vision.
Outbuildings that can “do-it-all” have the potential to increase value more than simple storage sheds.
How Do You Calculate ROI Before You Build?
This step is where most homeowners fail.
They buy the land, pour concrete, and only then do they try to do the math. Investing in outbuildings is simple. Follow these three questions.
How much will this cost me?
How much value will this add to my home?
How long do I plan on staying in my home?
You should have a rough estimate of ROI just from those three questions.
Let’s use an example…
You want to build a $15,000 storage building. It has the potential to increase value by $10,000. Simple math tells you your return on investment is 67%.
That’s actually not bad if you ask me. But there’s one more thing you need to consider.
Cost vs Benefits.
I’m not talking about ROI here. I want you to think about what you gain from building the outbuilding.
Does renting a storage unit cost you money? Sure does!
The national average cost of a self-storage rental is $90/month. Over 10 years, you’ll spend $10,800 on rentals.
If you build a $15,000 outbuilding on your own property, you’ve now eliminated that cost.
Would you buy a self-storage rental space that cost $15,000 upfront and $0 monthly?
Common Addition Mistakes That Kill Property Value
It’s important to note that not all outbuildings increase property value.
Here are a few ways you can lose money when adding structures to your property.
- Ill-advised locations. If your structure takes away from the home or isn’t placed correctly, it will impact value. Can you imagine a cute brick home with a metal junkery in the corner of the yard?
- Colors don’t match. Everyone knows your garage doesn’t need to match your home, but a shed? Absolutely. Outbuildings are seen as an extension of the home. If your colors clash, it creates chaos.
- You didn’t pull permits. Adding on to your home isn’t a walk in the park. You’ll need to hire contractors or do it yourself. But if you don’t pull the right permits, you could be forced to remove the structure when you go to sell. That’s a big waste of time and money.
- It isn’t maintained. If your outbuilding looks horrible, it creates a sense of neglect for your home. Keep everything clean and do repairs when needed.
Does your garage fit these descriptions?
If so, chances are it’s losing you money.
Making The Decision
Do all outbuildings add value to your property?
No, they do not. Garages can create value, but the average garage doesn’t increase property value.
If you build an outbuilding, there are a few things you should consider.
- Do I have enough storage space on my property?
- Is my garage full of junk?
- Could I use some workspace outside of my home?
- Will I stay in my home for at least 3-5 years?
- Am I willing to invest in quality construction?
When deciding if you should build an outbuilding, ask yourself these questions. If you answered yes to the majority of these, building an outbuilding makes financial sense.
Bringing It All Together
Kitchens and bathrooms aren’t the only ways to add value to your home.
While you should always stick with the tried and true methods of increasing home value. Don’t forget about other projects that can offer big returns.
Outbuildings are a great way to add value and function to your property. Just make sure you do it right.
Here’s a quick recap…
- Invest in structures that add function to your home.
- Garages can add value. Sheds can add value. Workshops can add value.
- Make sure the structure matches your home.
- Don’t forget to maintain your structures.
Follow these steps and outbuildings can become one of your best real estate investments.