If you’re planning to build a barndominium, you probably want assurance that your investment will hold its value. That’s one of the perks of investing in a house or a home.
Often, they hold value and you can get much or even all of the cost of building the home back if you choose to sell it. That’s important for having the freedom to move if you want, the freedom to change your lifestyle if you want, and financial freedom that doesn’t tie you to a single piece of property.
Do barndominiums hold their value like a traditional home does? And, do they have a resale value that’s equitable to the cost of building?
In each case, the answers to these questions are complex. Resale value depends on a lot of factors like the market, the condition of your home, and how much the type of home you have is in demand.
However, providing you meet the criteria of a home in good condition, in an in-demand area, and are charging about the same as the rest of the homes in your neighborhood or area, the answer should be “yes”, barndos hold their value and they will resell for a good value.
The actual answer, however, can be a lot more complicated, and we’ll look into that with the following barndominium resale value factors to consider.
Determining Resale Value of Barndominiums
Whether you just want assurance of your investment, are planning to use this as your starter home, or want to refinance for another investment home in the future, understanding the resale value of your barndominium is important.
However, there are complexities. For example, some banks will treat barndominiums as modular housing (e.g., the same as a trailer home).
The other factor is that barndominiums are a new trend. We don’t yet know how in-demand they will be in 5-10-15-20+ years.
Will your barndo go the way of shag carpeting? Unlikely. However, it is important to keep in mind that market influencers and trends change.
For the most part, resale value is affected by factors including:
- The age of the barndo
- The condition of the home
- Location
- Square footage
- Property
- Interior
- Comparable properties
- Market demand
Each of those will come into play every time you try to sell a home.
1. Age of the Barndo
The older your home is, the lower the value. That’s influenced a lot by factors like wear and tear, normal increase of expectation of maintenance, etc. It’s extremely important with wood frames and structures, which have a typical “useful” lifespan of about 100 years, if well-maintained.
It’s also a significant difference from barndominiums, which often have a structural warranty of 50-100 years. People are accustomed to older houses falling apart. This means that the older your home is, the less you’ll get for it on the resale market.
You can offset this by:
- Showing your home is in good maintenance
- Showing any existing warranties on the structure or roof (although these do not typically change hands)
- Referring to the durability and longevity of steel
- Referring to the low maintenance requirement of metal buildings
In each case, you’ll still expect that your one-year-old barndo will sell for comparatively more than your 10-year-old barndo and your 10-year-old barndo will sell for more than your 20-year-old barndo.
2. Condition
Condition is always going to be one of the most important factors of resale value. Here, condition refers to the actual physical condition of every aspect of your home and how far away it is from new. That means:
- Exterior siding
- Roofing
- Foundation
- Crawlspace if any
- Insulation
- Interior walls
- Flooring
- Interior
In most cases, you’ll need an inspection and an appraisal during sale. Here, any wear and tear, damage, rust, and other damage will be noted. It will also be communicated to the buyer and it will impact the quote.
Even things like faded paint will impact the resale value of your home because it impacts the outward appearance of the home. Most metal building kits come with a 20–50-year paint fade warranty, which means that if the paint fades before then, the manufacturer will fix the issue.
However, it is important to keep in mind that upkeep will impact resale value. That also holds true with the landscaping or the yard – as these are an important part of your home.
3. Location
Most people are aware that location is the most important aspect of selling a home. That also holds true with selling a barndominium. The better the location, the more you’ll get from your home.
And, that applies to not just how nice the neighborhood or area is but also to how much people want to live there. For example, if you have a barndo in a remote place with a beautiful view and a stunning yard, you might still have trouble selling the property because it is remote and fewer people want to live there, so the market is lower.
In addition, your home value will depend a lot on the quality of the land or the neighborhood. For example, if you build your home in a relatively empty area and find that you have industry or a factory built up nearby, the value of the property and the home would drop.
On the other hand, if a school, parks, and other amenities are built nearby, the value will go up.
Therefore, how the land is developed will impact your resale value. If the land isn’t yet developed, even city plans can impact how much you’re able to sell the barndominium for.
Homes in rural areas are likely to have more stable value – although booms in moving to the country will increase value and vice versa.
Location traits that positively impact your barndo’s resale value include:
- The view
- Access to parks and recreation
- Access to shopping and groceries
- Access to schools
- Access to utilities
- Quietness
- Nature or trees
- Water features
Nature can also greatly impact the value of your home. For example, if you plant a few fast-growing trees on your property now and sell your home in 15 years, you may find that they greatly impact the value of the property.
Eventually, you’ll want to discuss your options and what to consider with your local real estate agent to get a good idea of what’s important in your area.
4. Square Footage of Interior
The actual amount of floor space you have will do a great deal to impact the value of your home. For example, most ready-built homes sell for a median of $192 per square foot – with the median home being 2,383 square feet.
A larger home will sell for less per square foot. However, it will sell for more in total.
And, considering the average cost of building a barndo is around $100 per square foot, you could make a profit on that, providing the rest of the barndominium is in good condition and you haven’t paid more than that for the land.
However, it’s important to keep in mind that the average home size is about 2,500 square feet. Larger than that and many people won’t be able to afford it.
The smaller your home, the less you’ll have to ask for it so the faster it will likely sell – however the lower demand will be if you’re in a region with families and people looking for family homes.
5. Interior
Your home’s interior will play a large part in the resale value.
Most barndominiums are made with large and open floor plans, integrating the kitchen, dining area, and living area into a single great room. That may be a selling point or it may be a detractor depending on what the trends for living spaces are at the time of sale.
You’ll also see differences in valuation for:
- Materials – High quality and natural materials will always increase value. Budget materials will decrease value.
- Bedrooms – 3-4 bedrooms are most in demand. The fewer bedrooms you have, the less you can ask for the barndominium.
- Bathrooms – Bathrooms are on-trend with some houses having a bathroom per bedroom. You don’t need that to have a good resale value but most families prefer to have at least two.
- Heating system – A good and well-maintained HVAC system will add a lot to the value of your home.
- Windows – Most people prefer more windows and a lot of natural light
- Storage – More built-in storage means more convenience and your real estate agent will use that to increase the sale price.
- Kitchen – Everyone wants a spacious and well-designed kitchen even if they don’t really cook. If your barndo doesn’t have that, remodeling before the sale could greatly increase the final sale value.
Essentially, the condition, layout, design, and actual fixtures of the interior of your home will matter a great deal for the sale value. And, that will come down to what outlets you’ve installed, whether the layout is convenient, etc.
6. Property
The inside of your property matters but so does the outside. It doesn’t matter how nice your home is if the yard is a wreck or completely unmaintained.
Here, you’ll probably want to consider lot size, privacy, fences, nature, and overall appearance. You don’t have to have a carefully manicured lawn and hedges.
However, you should have a lot that is in good shape. Plus, the size and overall condition of the property will impact the sale value.
That also holds true in regards to things like septic tanks, wells, etc. If they are in good condition and well maintained, they should positively impact the value of the property rather than negatively.
7. Comparable Properties
It doesn’t matter how nice your barndo is, how big it is, what it offers, if it costs three times as much as any other home in the neighborhood. It’s important to keep in mind that location will impact price based on what everyone else in the neighborhood is buying.
You’ll also generally have to set the price based on a neighborhood appraisal, which means looking at the sale value or price of comparable homes in your area.
For example, if a comparable home is selling two streets over for $100,000 less, no one will touch your barndo. On the other hand, if you’re listing your barndo at well under the value of anything else for sale on your street, people will wonder why.
In most cases, paying for an appraisal is a good idea. You can normally expect to get at least 70% of the appraised value of the home or more when you sell a home.
8. Market Demand
Market demand is the most influential value in determining what you can sell a barndo for. This means that the demand for housing and more specifically your type of housing, in your region, will be the primary influencer on costs. This means:
- Type of house (singles, retiree, starter, family)
- Number of bedrooms
- Number of stories
If there’s a boom in people moving to the area, that could mean you could sell your home for more money. However, if the boom is families moving into the area to be close to a new school and you have a two-bedroom barndominium, you probably won’t benefit from that boom.
Market demand can be unpredictable, and it can change the actual sale value of your home with factors outside of your control. The good news is that metal buildings are durable, easy to modify, and offer plenty of versatility.
As long as you sell your home right, those factors shouldn’t have too much impact on your resale value.
Your home has to roughly meet the market demands of the area you’re selling the barndo in. This will impact speed of sale and what you can actually ask for the home.
To Conclude
If you want to sell your barndominium, now or in the future, it’s important to start with an appraisal. That means assessing the value of comparable homes, looking at other barndos, if any, in the area, and figuring out what a reasonable resale value would be for the property.
That’s actually what banks do when they appraise your building plan for a mortgage. You’ll normally get a mortgage for about 70% of the appraised prospective resale value.
However, if you know you want to resell later, taking factors like the future of the area, commonly in-demand housing types, amenities in the area, etc., will make a big difference to your eventual sale. And, of course, basics like keeping up with maintenance so your home looks and feels as close to new when you go to make the sale.
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