Barndominiums are all the rage in many cities now, but are they the right type of rental unit for you? Before you buy or lease one, learn how do barndominiums hold their resale value so that you can make an informed decision about whether these unique properties are right for you or not.
Barndominiums do hold their value more significantly than most residential properties. In fact, thanks to their lower initial buildup cost, you can always expect it to give a better return on investment.
To give you a better idea of if barndominiums hold their resale value, below we will discuss various factors that contributes to the resale value of any property and what can be done to retain it!
- What is Resale Value?
- Do Barndominiums Hold Their Resale Value?
- How Resale Value Actually Works?
- How to Calculate Resale Value of Barndominiums?
- Can Barndominium Depreciate Its Value?
- What Can Cause a Barndominium’s Value to Depreciate?
- Frequently Asked Questions
- Final Thought
What is Resale Value?
While resale value is an important concept, it’s more important to determine what your resale value is. Each market has its own individual appreciation patterns—and even within neighborhoods, house prices can go up or down.
Once you know how much you paid for a home and how much it’s worth now, that number can be applied to your purchase price to determine whether or not your property holds resale value.
A good real estate agent should be able to help you figure out barndominium plans with cost. Just make sure they aren’t using previous sale prices of homes of different sizes and shapes—these numbers don’t necessarily represent comparable homes.
It’s possible for a bungalow with several bedrooms to have a higher list price than another bungalow without as many bedrooms, but it doesn’t mean those properties are equal in actual value.
In other words: If all else is equal—location, size, condition—the smaller one would generally have a higher listing price. The extra bedroom just means there’s space in one area, but overall, square footage isn’t necessarily increased.
The takeaway: Appreciation rates vary by region and often reflect local economic factors such as job growth, interest rates, construction costs, and so on. All property will increase in value over time; some may appreciate faster than others depending on where they are located.
Do Barndominiums Hold Their Resale Value?
Yes! In fact, barndominiums are one of several housing alternatives that have held their value better than traditional homes. Barndominiums boasting their durable, aesthetically pleasing, and energy-efficient designs provide a comfortable living space for a variety of demographics.
Older Americans seeking to downsize from a larger home yet retain some luxury, as well as those who simply want an environmentally friendly dwelling, can benefit from barndominium living. And with growing concerns for our ecosystem, the resale value of these homes is sure to continue its steady climb.
How Resale Value Actually Works?
Buyers don’t always consider resale value when shopping for a home. For one, they may not be planning to resell for several years. And even if they are considering it, it may not be their top priority—it can be hard to predict how long you’ll stay in a particular property.
Furthermore, even real estate professionals frequently overlook resale value when making recommendations on what properties to buy or sell. Because there are many factors that go into determining price growth, buyers should seek out professional guidance to ensure they’re buying at an ideal time.
How to Calculate Resale Value of Barndominiums?
First, you need to know how much it costs and how much comparable properties have sold in recent months. That’s where a real estate agent can be helpful; they should be able to provide these figures as well as comparable that show what type of homes are selling at what price.
If they don’t provide such information, you might consider finding another agent who will. After determining market value, subtract all fees and outstanding loans (both your mortgage and any loans associated with your property) from your home’s appraised value.
You can find out what those fees and loans amount to by asking an agent for a breakdown or having them do it for you if you choose not to use one.
Then, apply a long-term growth rate—you may want to use somewhere between 3 and 5 percent depending on how far off you think your current assessment is—to determine resale value.
Add additional money for potential improvements like kitchen remodels or deck installation as needed to reach final estimates. Make sure to keep records of all expenses related to improving your home; you never know when someone may ask for proof that repairs were made before purchase.
Using these numbers as a guideline, buyers can see if their purchases were worth it.
Can Barndominium Depreciate Its Value?
Yes, just like every other real estate property, if a barndominium is not well maintained, it can depreciate its value. In addition to repairs and maintenance, buyers should pay close attention to make sure they’re purchasing a property from an owner who is trustworthy.
Poor management of owners or residents can cause problems with safety and structure that could potentially make a house impossible to sell for any amount of money.
What Can Cause a Barndominium’s Value to Depreciate?
1. Improper Maintenance
Any home, whether traditional or barndominium, will depreciate its value over time if not maintained properly. However, barndominiums are at a higher risk for depreciation because they are often designed to blend in with their natural surroundings, which means owners can be lax about upkeep since it’s harder to notice damage on the exterior of your home.
2. Damaged Property
If your home is damaged beyond repair by a natural disaster or even human error, its value will be diminished to zero. That’s why barndominium owners need to keep an emergency fund for repairs.
Having thousands of dollars set aside can make it easier for you to repair damages instead of allowing them to accumulate until they threaten your property’s structural integrity and marketability.
3. Issues with Landscape
While issues with a home’s landscape may seem minor, they can be a major setback when it comes to barndominium resale value.
As mentioned above, these properties are designed to blend in with their surroundings, which means that poor landscaping choices made by past or current owners can make your property look cheap and out of place if not appropriately maintained.
Frequently Asked Questions
1. Is it hard to sell a barndominium?
No, not at all! If you’re not sure how much your property is worth, or if you’re having trouble finding an agent to help, engage with a local real estate professional to assist you in the sale of your home.
Alternatively, do some research on what similar properties are selling for in your area; you can use that information as a starting point for negotiations and discussions with potential buyers.
2. Is a barndominium a good investment?
Yes, they are. As long as you choose your property wisely and keep up with maintenance, you’ll find that owning a barndominium will give you an excellent return on your investment when it comes time to sell.
3. Are barndominiums popular?
Every property has its own specific audience, but in general, yes, barndominiums are becoming more and more common. With so many options to choose from when purchasing a home, buyers look for properties that stand out and feel unique. After all, you’re paying for it with your hard-earned money! If you want to impress future buyers with your decision to purchase a barndominium, make sure that your space is well-maintained and marketed appropriately when you come time to sell.
If you own a barndominium, make sure to pay attention to all details related to its upkeep, from landscaping to repairs.
Keep up with maintenance by hiring professional landscapers and contractors to complete any tasks beyond your expertise.
Consider setting aside a small monthly budget—say $100—to set aside for emergency repairs, so you always have enough money on hand in case disaster strikes at home.