Does a Shed Increase Home Value? Top Home Appraisers Weigh In

Sheds can be incredibly useful, whether you’re using it for additional storage or as outdoor space for an office, a hobby, or just relaxation. With all these uses, does a shed increase home value when it comes time to sell? Especially as more people work from home, agents say buyers are looking for office space and outdoor space, which the right shed can provide. Other shed-owners have embraced man-caves and she-sheds, creating the perfect space to relax, read, craft, or even entertain.

To take the mystery out of the question, “Does a shed increase home value?” HomeLight spoke to top experts in valuing homes from different regions around the country and real estate agents who’ve sold hundreds of homes with sheds.

Below, learn the average cost of a shed, what it adds (or detracts) from home value, and how to make your shed a positive point during a sale. And to get an idea of your own home’s value, check out HomeLight’s Home Value Estimator tool.

How much does it cost to build a shed?

First things first: If you’re adding a shed to your property in hopes that it will boost appeal, you’ll want to know how much it’s going to cost. HomeAdvisor puts the national average cost to build a shed or playhouse at $2,500. But your total price depends on what type of shed you’re building and whether you’re doing it yourself or contracting it out.

If you’re building it yourself, expect the project to take several days and cost up to $5,000. Hiring a contractor to build one for you can cost around $100 per hour.

The purpose of the shed will also affect its price. If you simply want a small place to keep your tools out of the elements, you’ll pay less — between $100 and $1,000 according to HomeAdvisor. More high-end sheds can cost up to $30,000. And if you want to build something you’ll actually spend time in, such as an outdoor living room or home office, expect to pay between $5,000 and $15,000.

Generally, the cheapest option is to buy a prefabricated shed with factory-made components that can be assembled on site. On average, metal prefab sheds cost as low as $300, wood ones can be as low as $600, and vinyl can be as low as $800. These sheds can also easily be moved or removed from the property.

Does a shed add value to the house?

Once you figure out what kind of shed you want, you’ll likely wonder if it actually will increase the value of your home. By and large, the experts generally say no — a shed on your property doesn’t increase home value, at least not by much. HomeLight asked four appraisers from different regions around the country how much value a shed adds to the appraisal. Here’s what they said.

Michael Keough, a 30-year residential home appraiser in New Jersey:

“Typically we don’t add value to the home for a shed. It’s not a market value to buyer-seller activity. If [the shed] doesn’t have a foundation, it does not add value. It’s not real estate. If it was a personal property appraisal, it would be another story.”

Kevin Murray, with 35 years of home appraisal experience serving Illinois, Indiana, and Michigan:

“Typically, sheds do not add to value. Many of the sheds purchased today are delivered as one piece and placed in a backyard or side of a house. The sheds can be considered personal property as they can be moved and taken with the owners. If not, the sheds may add to the marketability of the house, but overall when comparing a similar house without a shed, there usually is no measurable difference.”

Edmond (Buddy) Eslava, a nationally renowned appraiser with the Appraisal Consultant Group in Mobile, Alabama:

“Anybody can put a shed in their backyard for less than $2,000. The added value is less than what it would cost to build one. It would be a little more than the depreciated value. You have to take into account the necessity, the functionality, and the condition.”

Jerin Harper, an appraiser from Oregon with 10 years of experience:

“It’s difficult to measure the contributing value for a shed. On smaller houses (less than 1,500 square feet) a shed may have some value, but the value will only be around 1 to 2% of the overall value of the property.”

In some instances, having a shed on your property could actually decrease the value. Some homebuyers may consider it a liability, based on the situation.

“There are a lot of contingencies,” said Brett Young, a top-selling Indianapolis agent. “If you’re selling a home that’s got a small garage and limited storage, then absolutely a shed is going to add value. But some people don’t like the idea of a shed in their backyard, and some homeowners associations restrict it, so in that case it could decrease value.”

Plus, adding a shed could have tax implications, Keough says. If it has an unmovable foundation, it becomes an accessory building and therefore, taxable living space. In essence, this could increase your property taxes.

How do you maximize the value of your shed?

Even if your shed won’t boost the appraised price of your home, there are still things you can do to make sure it adds some value or marketability to the property overall.

Make sure to get a building permit for the shed

Building permits, even for sheds, are crucial—assuming you live in an area that requires one. Without that permit, the shed no longer becomes an asset, but a liability.

Mike Lombardo, a top-selling agent in Cape Coral, Florida, once sold a home that had a shed, but the homeowner never got a permit to build it. As a result, the appraiser could not include the shed in the appraisal process.

“They won’t count it toward the value of the home,” Lombardo says. “The city could ask them to tear it down any minute; even though the buyer saw intrinsic value in it, the appraiser won’t include it.”

Always be sure to check local laws before you start on construction.

Match the shed to the style of your home

Lombardo and Young both agree that to add as much value as possible, match the shed style to the style of your home, or at least the style of the yard. Say you have a Cape Cod home with red siding — you’ll want to get siding on the shed to match. But, if your Cape Cod has a Japanese garden in the back near the shed, you can mix it up a bit. As long as the aesthetics match in some way, you’ll be good to go.

Keep the shed in top-notch condition

Although sheds intrinsically don’t add much value, a shed in poor condition can detract value or even be a deal breaker for home buyers.

If it’s not fixed and maintained, Young says, it’ll become something the buyer has to deal with, either to fix it up themselves or remove it completely. And that could lower property value during the sale because the buyer might want to incorporate that cost into the purchase price.

And if the buyer needs to get a mortgage, a dilapidated shed might stop a loan in its tracks. “A buyer may not be able to get a loan if the property has a shed that is in poor condition, per mortgage underwriting guidelines and standards,” Harper said. “The only option would be to improve the condition of the shed, or remove it from the property.”

Use the most desirable materials to build your shed

The materials used to build your shed should be tailored to the area. Typically, PVC sheds are more durable and a better idea, especially in locations that have a lot of adverse weather. But in Young’s market, sheds are generally made out of wood and have a ramp—the perfect place for someone to store a tractor or lawn tools. “If it’s made with the right materials, you’re going to increase the value,” Young said.

Eslava also notes that sheds are even more useful in areas with little car storage. If there’s no garage, you need another space to store all the things you’d normally put there. And remember, Eslava adds: Custom-built is almost always going to add more value than a prefabricated shed.

Stage the shed properly for home showings

Just like everything else on the property you’re selling, you need to stage the shed properly to be most appealing to buyers.

In general, that means cleaning it up and organizing it so someone looking at the home can judge how much storage it has and what they can use it for.

Lombardo suggests going the extra mile with your shed, though. “To stage it, make sure you deal with the five senses,” he said. “Make sure there’s enough light, the temperature is reasonable, it’s clean and neat, there’s nothing too personal on display, and it smells nice. Make it smell like vanilla or cinnamon.”

Header Image Source: (Marina Khrapova/ Unsplash)

from HomeLight Blog https://www.homelight.com/blog/does-a-shed-increase-home-value/

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