Does a large garage or quality out building increase your property value?

[sands35]

I spoke with my real estate agent in the planning cycle for a detached garage. He suggested to size it so that is can be advertised as a standard car storage garage. He also suggested that doing too much custom stuff (i.e, a bump out for a paint booth or in ground car lifts for example) wouldn't help. It would need to architecturally match the house and look like it belongs there. So no pole barns with siding that doesn't match the house for example. (I do live in a mature well developed residential area)

It worked out that the size I wanted and could afford also matched a 2x2 car storage garage. (26 wide by 32 deep) Bonus that it's deep enough for a boat on a trailer.

More than a standard 3 car is sort of like a pool. Very few people want one and most potential buyers won't touch them. "overdeveloped" as mentioned above.

I wouldn't count on the garage improving re-sale value. Better of doing a kitchen update or something - but then all you are doing is maintaining value.

 

[Ct1]

Im a realtor and builder and in our area which has a mean home value in the $300,000 range with most newer homes being $500,000 and up an outbuilding if it is considered a garage will add value if it is done tastefully. However, if there's already 3 garage bays on the property, each additional bay will add less and less until it eventually detracts from value. We have two local properties with over 8+ bays and neither has sold in 6 years of listings so too much just turns off buyers. Both of those are split up individual bays though. If you had a clear span building and 3 car garage many would consider the clear span as a shop and it would add some value but not a lot of value.
It would also lower your number of possible buyers, But the one who needed the shop would be willing to pay extra for it.

I can't really comment on where you guys live but around here lifts and spray booths add nothing to value in fact they detract from the value, Especially in ground lifts those send people running away due to contamination concerns.

 

[theoldwizard1]

I have a friend who has a small horse ranch, about 5 acres, not too far from the city (about 45 minutes). When they bought it, property size was the number 1 issue (they have 3 horses). They spent money and had the house fixed up to their liking.

After several years they decided to expand the barn, so they started putting some money away. Once they thought they had adequate funds, they had some plans drawn up and estimates done. Do to age and construction of the old barn, it was determined the best approach would be to tear down 1/2 of the barn and replace it with a much larger building. The cost was more than TWICE what they had saved !

It came out fantastic ! The horse stalls are in the old section and the new part has lots of storage for machinery, some work space and large "horsey" items on the ground floor and storage for almost 2 full years of hay (not that they buy that much at one time). It also has "wings" on both sides to provide roof covered storage for the horse trailer and other large items.

Will they ever get their money ? Not likely. But they never plan on selling and they enjoy it everyday !

 

[Moose97]

I have been looking into possibly selling my place recently (decided to stay put). I have a 36X36 garage and a 16X20 shop. Looks like they added about 50K value to the place per the realtor. That being said I live in the country so most folks are looking for large outbuildings. Don't know that it would add as much in town.

The best advice you've received so far is build what you want and don't worry about resale.

 

[jaker10]

Put up a 30x48 12 high. have $30,000 in it, county raised my value $7,000. could'nt be happier.

 

[Charles (in GA)]

For residential construction, many tax assessors use the Marshall & Swift construction cost guides, which are tailored to the local area. Basically, the appraiser goes out and measures and sketches up the house, gives it a score for physical condition, and a score for quality of construction (fancy trim, multiple roof cuts, unusual architectural features, all add to the quality score). You basically plug the measurements, type of materials (brick, siding, stucco, slab, basement, crawl space, etc) and the computer spits out a value. This is a surprisingly accurate number, as its based on construction costs for the local area that M&S does a lot of research to arrive at.

With outbuildings, and commercial construction, the task of the tax appraiser is much more difficult, and generally, they are less knowledgeable of the differences in construction (stud walls, pole construction, steel buildings, etc), so with outbuildings, you may win big, or lose big. If the appraiser values it too high, prepare your case and appeal it, but sometimes its better to just go and sit down with them and plead your arguments for a lower value with the appraiser who did the field work, rather than waste your time and the government's time and money doing a formal appeal.

It costs the government money to have a taxpayer go thru the formal appeal process. Those "citizens" who sit on appeals boards and hear the cases have to be paid, the clerks who have to schedule the hearings have other work that they do on a day to day basis, and appeals detract from that, certified mailings have to be done..... all of this costs the taxpayers money that is better spent on other things. If you can accomplish the same thing by spending a few minutes in someone's office, everyone is much happier.

Charles

 

[Kevin54]

Not to needlessly add onto an old thread Kevin, but whenever folks start talking outbuildings the key things to remember are layout and property size. From what I saw around here when house shopping before buying last year, a 40'x40' on only an acre would detract from the value while jacking up the taxes. Properly designed into a larger property it would be no problem, but on these smaller properties youd have to be foolish to build one, much less pay anything extra when buying one. One of the others I looked at in my neighborhood for example has a 30'x60' garage, but it was both an eyesore and seemed huge on just over an acre, which isnt good bc it kills the yard. For the elderly PO who had a motorhome and didnt need/want property to maintain it worked, but for anybody else it was hideous. The property without the garage was easily worth $75k but with the garage it ended up selling for only $45k bc most folks care more about having a nice yard than a big garage.

Someone must have come in, posted, then deleted the thread after I replied. I don't dig up Zombie Threads.

But it is a good topic!!!

 

[vetron]

I've been house hunting around boise Idaho for the last few weeks. shops definitely add to the price believe me! problem is anything with a nice shop also came with a clapped out brady bunch 70s home. there just weren't any modern homes with a shop (at least not under 300k).
realtor said finding something with a shop is a very small market...even she was surprised at the junk on the marked priced so high. there were some amazing shops with junk homes haha guess where all the $ and effort went!
now I plan to build my shop, and have to go thru all the red tape-what a pain.
this is my experience.
for your question-yes I think when you go to sell you will be looking at a minority of buyers in that market segment who want a shop. I suppose prices depend on your location and local market.

 

[Kevin54]

I've been house hunting around boise Idaho for the last few weeks. shops definitely add to the price believe me! problem is anything with a nice shop also came with a clapped out brady bunch 70s home. there just weren't any modern homes with a shop (at least not under 300k).
realtor said finding something with a shop is a very small market...even she was surprised at the junk on the marked priced so high. there were some amazing shops with junk homes haha guess where all the $ and effort went!
now I plan to build my shop, and have to go thru all the red tape-what a pain.
this is my experience.
for your question-yes I think when you go to sell you will be looking at a minority of buyers in that market segment who want a shop. I suppose prices depend on your location and local market.

Most definitely location plays a key role in pricing. A shop is just like anything else with a home though. A kitchen remodel brings more return than a bathroom remodel. Kitchens can bring 75% or more on a return of investment. A bath remodeling, depending on the size of a bathroom and how far you go with it, may bring a little less of a return. A swimming pool, above ground, is a loss. An inground pool, and again, location, maybe 25%-50% return on what you shelled out. In Ohio, you only get a couple months use out of a pool. In Cali. or Florida, you'd get more of a return just because of the climate.

 

[fnieto]

Build your shop for your own enjoyment. Count on higher property tax but don't count on adding value to your home. I could spend $60,000 on a new diesel truck and it would be worth 20k in a few years, or build a nice shop and enjoy it for a long time. Now if I wait a few years to build the same shop, it would only cost more.
Thats my .02

 

[Tucko]

Are you looking for an unbiased answer from THIS group?? Of course it increases the value....lol..

 

[black00lightning]

We built a house on a 1.2 acre lot in the Texas hill country. We decided to build a 1000 sqft woodshop and had it built to match the house which means it's all brick with 12 foot walls. Total cost was projected to be $65,000 (200a service, security, cable TV, data connection,phone hookup and a full bath rough-in) for a finished shell and another $15,00 for a/c, insulation, multiple 120 &240 outlets, lighting ,sheetrock float, texture and pafor, flooring as well as finish out the full bath.

Since many people have vacation homes here, we figured the shop could be converted into a guest home on we event sold the house or i gave up woodworking. I would still have the home 3 car garage and a 2 car detached garage at the back of the lot to piddle in.

Hopefully, resale value would increase from $15,00 to maybe $30,000. That's the plan any way.

 

[1965gp]

This is an old thread but I really enjoyed the read. We went through a similar situation with our house. Bought it because the layout allowed room to expand the garage. After living there for a few years and paying for storage we decided it was time to expand.

My initial plan was just to expand the garage to the side with siding and keep a fence in front of it. The HOA shut me down and said the only option was if the garage looked like it was originally built that way with matching brick, stucco and Windows. Oh yea- we are limited to a four car garage in our neighborhood...

Originally I was furious that my plan wouldn't work but honestly that probably would have looked shoddy and detracted from the value. After working with the contractor we came up with a great plan to make it look complete and give me the storage I needed:

The garage is now 6 cars wide (with only 4 bay doors) and the three bays to the left are tandem two deep. It has roll up doors around the back to make it easier to maneuver. I think this design will add to the value of the house. It is in a nicer neighborhood and is not the most expensive house in the area. I fully expect (if we were to ever move) to have to wait on the right buyer but as was mentioned earlier hobbies are so extreme now I think there are probably more people today than 15 years ago that would like the extra room. It would also be good for an eBay or mobile business (plumber, electrition, etc) to store their material and tools when not in use.

No plans on moving but I thought it was interesting that actually following the HOA's guidelines worked in my favor long term.

 

[Cyberbear]

Bought my house in 1969 for $18,500.00 and sold it in 2006 for $525,000.00. When I sold it, the house had 1170 sq/ft and the shop had 2700 sq/ft. I had ten people who wanted the home because of the shop, which cost me $28,000.00 when I added on in 1986. It's better to build now when it's cheaper and let the neighborhood catch up.
Now I'm retired and live on 7.5 acres and have a 2400 sq/ft shop with mezzanine above the store room, wash room and office, mortgage free because of the first home.

 

[Nexussian]

Holy Zombie Thread Batman!!

Since it's back, it depends on the market.

As someone mentioned previously, once you have a certain amount of "garage" space, additional doesn't add.

In the snowbird market I've been told that an "RV" garage, like the OP suggested years ago, can add up to 95% of the cost of the building.

 

[My Old Tools]

Just about every house in our rural neighborhood has a shop building separate from the 2,3 or 4 car garages. I built mine with a French door facing the backyard and roughed in plumbing so it could easily become a pool house and party barn. The county doesn't value a metal building more than about $10 SF no matter what you do to it, so it's not a big impact on taxes.

 

[jchetty]

Yeah you may not got every penny back on the "sale" by if you have a working garage- you make money back. You save but doing your own maintenance, increased sold prices on cars, no storage costs, allows you to do more work on the house......on and on.

Our house is ok size. Mcmansions were built across the street with tiny garages. Ours is detached 2 car and deep. The money I save doing my own repairs, house stuff, and yard work has paid for the garage many times over. Neighbor just redid all his windows- he would have bought 2 of our garages.

 

[Blazinzuk]

It also depends on your realtor. We have had a hard time selling our house for another reason. Our first realtor barely mentioned the garage. She said what alot have said, it doesn't really add too much. Ours is a garage not a shop as it is attached.

The realtor we are working with now is gonna use the garage as the main selling point.

He thinks that will sell the house even with the financing problems it has

In our new place virtually everyone I know either has a shop in the back or has plans to build one at some point.

 

[Evilunclegrimace]

You might also call the real estate agent who woks your neighborhood, just drive around and see who's name is on all the for sale signs and call him/her - they'll know the answers to all those questions. One stop shopping!

Ask an appraiser NOT a real estate agent. An appraiser is the one the one that works with the bank to set home prices based on actual sales. A real estate agent is the person that is the go between for the seller and the bank. A real estate agent is working for the seller of the property and as such is trying to get the most out of the buyer, the bank and appraiser are the ones that set the value of the property based on current market sales and they have the final word on the actual value of the property. If someone wishes to spend more than the appraised value then they have a reason to pay more than the market value.

 

[nadogail]

IMHO, my workshop adds to my home value.

 

[Pwrgeek]

Well I'm $60k deep in my 1800 sq ft. That being said I'll probably never get anything close to that back in property value, but this is our forever house and they're moving me out of it feet first so I figure $60000 over the next 30 or 40 years isn't too bad for a hobby cost. Then it's my kids' problem to see what they can get out of it.


Sent from my iPhone using Tapatalk

 

[checkthisout]

I spent about 70-80k so far and I'll easily double my money....if I were to sell.....

 

[Dhagan887]

You're probably not going to get it all back, but that depends on finding the right buyer . Almost guarantee it would sell quicker than without it if done appropriately.

As far as property taxes, I believe they just hit us with a $15 sq ft assessment on detached structures and then the 1.whateveritis prop tax

 

[reader2580]

This is an old thread, but I'll relay my experience trying to buy a house with a large garage already built.

In 2014 I sold my house and spent three months trying to a find a replacement house. Criteria were room to build a garage large enough to house a 43 foot long 12'-9" tall motorhome, or an existing garage that would work.

I found two houses with really nice 40x80 garages that would work great, but they both sold right away before I could get a showing. The buildings were easily $75,000 to $100,00 to build new, but the garages seemed to add little to the price of the house. I found quite a few houses with large garages, but the ceilings were only 10 to 12 feet tall.

I came close to buying a house with a garage that had 13 foot ceiling, but the building was only 40 feet long and I would have had to expand. I also only had three inches of clearance to the ceiling. The house was decent, but was a sllit level which I don't care for. That house sat on the market for months for some reason and I think it eventually got pulled from the market.

In the end I bought a house with property that I could build a garage on. Unfortunately, flood maps got redrawn and the buildable part of my property is now in a flood zone. I'm not sure what I will do about building a garage.

 

[mmb617]

I just read through this thread because it's relevant to what I'll be dealing with soon. Not exactly apples to apples since I don't care about resale value in terms of what I could get as I have lived here 37 years and don't expect to move before I die.

However, our county is in the midst of the first reassessment since 1958. As you can imagine there are going to be some major adjustments in assessed property values. This will in turn trigger many appeals.

Since I am of the opinion that values are far more likely to be set too high than too low I want to get a head start on filing an appeal if needed. I'm further assuming that when the new assessed values are mailed out July 1 the local certified assessors will be swamped with work, so I want to get my property assessed before then. I will be making an appointment to have this done next week.

I'm very curious to see what number they come up with. Mind you I don't live in one of those high value neighborhoods like some of you do. The house right next door to me sold just a few weeks ago for $65k, and I'm thinking my value should be somewhere in that ballpark. I'm hoping I don't come in substantially higher.

Comparing mine to the recently sold one, the houses are similar in age and condition I think. My house is a bit larger, but he has more ground. I have 3/4 acre while he has 1 1/2 acre. The big difference between our properties is that he has no garage and I have a detached 24x52 garage containing 4 bays and a lift. I also have a 15x30 above ground pool with a deck the whole way around it.

I'm kind of holding my breath waiting to see how bad the tax hit is going to be as my current assessment is only $42.5k in 2016 dollars using the common level ratio calculation. If the taxes double I'll just have to **** it up, but if it's even worse than that I don't know how I'll afford it. It's hard for me to imagine the market value could be more than $85k, but I'll wait and see what the assessor thinks.

I'm actually hoping that having more garage than the norm and also having the above ground pool will hurt my value for assessment purposes.

I'll report back after I get the figures.

 

[jives]

Again, an old thread, but we just received our new assessment that includes our new garage/barn. This is the only garage on the property, so it is not an outbuilding in some far off spot on the land. The garage is a standard steel sided pole barn, 32, x 42, but with a steeper pitched roof, porch, cupola, and nice windows. No electricity yet but we are at about $56K in building costs. Property assessment went up by $35K. Some of that may include assessment inflation for the rest of the house, so I believe the garage is only being valued at $25K or so.

I've go no problem with that. Keeps the taxes down. No plan to sell or move.

 

[Jazz1]

Shop pays for itself if you are using it to do your own work instead of farming out projects. I know my garage has paid for itself many times over. As far as recouping costs to build market decides when its time to sell. JMHO

 

[My Old Tools]

Our county uses a standard formula for assessment of shop or out buildings. Around here that means slab and red iron construction mostly. As near as I can figure for tax purposes it adds around $10 SF to your tax appraisal no matter how nice you finish it. So for tax purposes it doesn't hurt you much. I doubt it adds much more than that to selling price either, so your return might be 30-50%. It is worth that to me.

 

[APEowner]

For what it's worth when I sold my Upstate NY house the 1000 sqft heated and cooled shop did nothing to increase the resale value. There were a few people who looked at that liked the shop but the woman who ultimately bought it was more impressed with my wife's flower gardens and as far a I can tell from an occasional drive by never even goes in the shop.

 

[adpprop]

A whole bunch of things have come to light through this thread and I concur with most of what the guys are saying. IF you are handy then some of the cost can be recouped but if you are just going to use it for storage only then it will be expensive storage if you are going to sell your home before the market has a chance to catch up.
We have kids who ONLY use their garage for storage and cannot get their vehicles in. During the winter this would drive me crazy.
So some people will want an extra "storage" space and some will want it as workshop. Some will find it a nuisance kinda' like a swimming pool. My older brother bought their house because of the pool and has no garage even living in Manitoba with their short summers and long winters. They have it for the grand kids and would not trade for any other place.
Like the other guys have said "Enjoy it". Just make sure it is tastefully done and you should be ok.

 

[ddawg16]

I just had my house appraised.....

My 2-story garage added little to the value.....

I really don't care....I'm going to be in it for a long time....

But when it comes time to sell? It will sell quickly to the right person.

 

[TurnipTruck]

For what it's worth when I sold my Upstate NY house the 1000 sqft heated and cooled shop did nothing to increase the resale value. There were a few people who looked at that liked the shop but the woman who ultimately bought it was more impressed with my wife's flower gardens and as far a I can tell from an occasional drive by never even goes in the shop.

I just sold my house and two shops (11 cars total) for the cost of the materials. The single girl who bought it loved the house/kitchen/greenhouse/landscaping and was losing her rental and was in a hurry to buy. The heated floor shop with 80 feet of steel benches/press/solvent tank/mezzanine/bedroom/bath/crane is her firewood storage, and the 5-car garage with lift and air stores her motorcycle.
I got out from under two mortgages and double utility bills (we bought a fixer-upper on an exclusive lake that was for sale for an hour), and she got twenty years of my labor.

 

[jt777]

As said. It adds value to the right person. A large heated garage adds hide value to the kind of guys on this forum. If you have no intention of moving, build as big as you can afford/or your wife will let you build. If you can afford the tax increase, a big heated shop is priceless to guys like us. Keep in mind, i deal with 6+ months a year in canadian winters.

 

[littlebritishcar]

The principal of conformity and substitution.

Properties realize their maximum market value when they conform to neighborhood expectations and any added value is a measure of what a typical buyer is most likely to pay for that feature versus a home that doesn't have it.

 

[sctattooer]

Had a friend of mine build his dream garage. 4 bays, 3 with lifts and one downdraft spray booth. It didnt take long before the neighbors started complaining about the cars coming and going, and noise from the air tools. He ended up moving, and hasnt been able to sell the house because the selling point of the place was the garage. The neighbors there just wont give up on car guys who are interested in the property. Before you build, make sure your garage will be far enough away from prying eyes and sensitive ears. Even if your neighbors now are cool, nothing lasts forever and your neighbor may not be your neighbor 3-5 years from now. Just a thought.

 

[matt_i]

My opinion is that I think one can do very slightly better if not inside a dense city. Being out in the country, or the edge of such, people generally have more "stuff". You get to where the average lot size is 2-5 acres and a building is going to be a good thing to have for those looking in that area. Certainly not 100% recoup on the cost. To really produce real estate value, the money should probably be kitchens and baths as I'm told that those features actually sell a house to the female involved in the transaction.

 

[My Old Tools]

Our neighborhood is 2 acre minimum lots and everyone has a shop. I also roughed in plumbing and positioned the building so that it could be converted to a pool house if someone wanted to add a pool.

 

[steve308]

Taxes and property value are not the only factors you should consider. Insured value, building and contents must be considered. Most HO3 policies only extend a value of 10% to detached structures and only protect what are considered household items in the case of a loss therefore lift(s), large tool investments, air compressors etc. may not be covered if it burns down or suffers other significant damage. Most insurance companies that write coverage in rural areas offer the correct coverage and the price is not bad unless you are running a for profit business out of the garage.

 

[ct03911]

I think the consensus here is "it depends".
I'm in CT.
I got an appraisal last fall for an equity loan to build a detached two car garage. I also have a inground pool.
Anyone is welcome to the pool. Just come and remove it.
Anyways, the appraisal added value for the pool.
Not what a new one would cost but it added.
At the time I had the detached garage foundation and septic in place.
Basically no value add for $20k investment in site work, foundation, septic etc.
At that time, the appraiser told me the finished garage would add value.
I doubt my $80k spent would be shown in a new appraisal but it might come close.
I think it depends largely on your market and if the garage complements the home.
I'd fully expect a future appraisal to reflect much of the garage cost based upon my experience and conversations with the bank.

 

[barks]

I think the consensus here is "it depends".
I'm in CT.
I got an appraisal last fall for an equity loan to build a detached two car garage. I also have a inground pool.
Anyone is welcome to the pool. Just come and remove it.
Anyways, the appraisal added value for the pool.
Not what a new one would cost but it added.
At the time I had the detached garage foundation and septic in place.
Basically no value add for $20k investment in site work, foundation, septic etc.
At that time, the appraiser told me the finished garage would add value.
I doubt my $80k spent would be shown in a new appraisal but it might come close.
I think it depends largely on your market and if the garage complements the home.
I'd fully expect a future appraisal to reflect much of the garage cost based upon my experience and conversations with the bank.

Two different place have had quotes of about $5K to remove/fill in an inground pool. Depending on tax rates, it may be something to consider.