If you want to build a new home and have fallen in love with the barndo style, you may be wondering whether these homes are a good investment. Do barndominiums hold their value?
A person’s home is one of their greatest assets, so you want to put your time and money into something that will give you a good return. Will a barndominium help you reach this goal?
Are Barndos a Good Investment?
Whether or not a barndo is a good investment will depend on several factors. One of the most important factors is the purpose of the structure.
Will you use your barndominum to:
- Live in? If your goal is to live in the barndo, then you need to ensure that it will appreciate in value but also add to the quality of your life.
- Rent? If you want to rent the home, then you need to ensure that rent prices are high enough to make the investment worth your while.
- Sell? If your sole purpose is to build a barndo and sell it, then you need to do the math to ensure you’ll be able to sell it for more than you bought it.
Many people choose to build a barndominium as their main residence, and in this case, it is often considered a good investment. The cost of construction is lower than a stick-built home, which means a lower mortgage payment. Maintenance and repairs are often less of a concern, so homeowners spend less overall on their homes.
Barndominiums are Long-Lasting
Compared to standard homes, barndos often have a longer lifespan, especially when built on a concrete slab foundation.
Barndominiums typically have steel frames that can last hundreds of years if they are constructed properly. Because the siding and roof are also made of metal, they will also last a lifetime with proper maintenance and care.
Easier to Maintain
Compared to a stick-built home, a barndo is usually easier to maintain. If the structure has metal roofing and siding, it can last 40-70 years with minimal maintenance.
The biggest concern is rusting, but most metal construction products are manufactured to combat rust.
Cheaper to Build
In general, a barndo is cheaper to build than a standard home. Construction typically comes in at under $100 per square foot, whereas a standard home can cost well over $100 per square foot.
Costs, of course, will vary from one location to the next. However, in most markets, the materials used to build a barndo are less expensive than lumber.
Do Barndominiums Appreciate?
Barndominiums can appreciate in value, although at a slower rate than a standard home. Barndos are generally not ideal as a short-term investment unless you’re building a luxury barndo.
These types of homes appreciate at about the same rate as commercial property (about 2%-3% per year in a regular market), and they do not depreciate in value.
With all of these factors in mind, barndos are generally a good investment if you plan to live in the structure or rent it out. If you’re only looking to flip homes, then you may want to stick with buying and selling standard homes.
Determining the Resale Value of Your Barndo
Bardominium resale often leads owners to learn a lot about determining their structure’s value. Unless you find a comparable barn home for sale in your area, you’ll need to use one of the methods below to value your barndo:
Automated Valuation Model – AVM
AVM is used by realtor websites, such as Zillow and Redfin, to automate the valuation of a property. However, it’s not 100% accurate because it doesn’t consider the unique features of the property or land that it’s on.
The AVM will use the following to try and value your barndo:
- Tax assessments
- Recent deeds of ownership
- Property transfer data
Advanced algorithms are in use to help analyze how much your home is worth. This is how Zillow barndominiums resale values are calculated if there are no barndos for sale in the area.
If you don’t know the value of your barndo and want to receive an accurate estimate, try a professional appraisal. An appraiser in your area will provide the most accurate valuation for your home.
When selling the property, the buyer will likely need an appraisal of the property to secure funding.
Getting an appraisal is a bonus for buyers who will not need to seek one on their own and ensures that you maximize the sale of the barndo.
3 Key Factors That Affect a Barndominium’s Value
There are many factors that can affect a barndo’s value, and these are factors that will affect the value of any real estate.
#1 – Location
Location is one of the biggest factors that affects a barndo’s value. A barndominium’s value may go up or down depending on the location’s:
- Employment rates
- Proximity to parks and schools
- Crime rating
- Cost of living
A barndo in a desirable location will fetch a higher price than one in a small city with few jobs and amenities.
#2 – Size
The size of the barndo will also affect its value. The more square footage it has, the higher the value.
Keep in mind that “livable space” is what really matters. These are areas that are heated and cooled year-round. They don’t include garages, sunrooms or porches.
#3 – Features and Upgrades
Finally, a barndo’s features and upgrades will affect its value. A barndo with high-end finishes and cabinetry will have a higher value than a home with standard finishes.
Barndominiums do hold their value, and they do appreciate over time. If you’re building a quality structure and plan to rent or live in the barndominium, you will likely find it to be a great investment.
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