For many homeowners, return on investment is one of the main concerns when undergoing a home improvement project. You may be particularly interested in resale value if you know you’ll be putting your house on the market in the near future. Why pour thousands of dollars into a job if you can’t recoup your money when you sell your home?
Building a garage is one of the more expensive home improvement projects, but it’s also one of the best for resale value. If you’re thinking about building a garage, you should understand the costs, benefits, and return on investment associated with the job.
Benefits of Having a Garage
A garage offers such a strong return on investment because it provides so many benefits for homeowners. Here are some of the key reasons home buyers are willing to pay extra for a garage:
Protection
Your garage protects your car from the elements, including snow, rain, hail, salt, dust, and extreme temperatures. Not only does this keep your car looking good, but it may even prolong its lifespan and help it retain its value.
Convenience
An attached garage provides a level of convenience that’s hard for homeowners to pass up. You can step from your house to your car without exposing yourself to rain, snow, or harsh temperatures. Carrying items between your home and car is quick and easy with an attached garage, too.
Storage
Even a small one-car garage provides extra storage space. You can set up a bench or table for home projects or store your tools on shelves. Your garage is also a convenient place to store seasonal items like lawn equipment, sports gear, and holiday decor.
Security
Your car is probably one of your most expensive possessions, and the garage offers an added layer of protection against theft. If you build a new garage, you can even add extra security features like secure locking systems and smart home technology.
Curb Appeal
Depending on how well it’s maintained, a garage can either enhance or detract from your home’s curb appeal. A new and well-kept garage that complements your home’s architecture can make an excellent first impression.
ROI of Building a Garage
The cost and return on investment of building a garage will vary significantly based on your location and the details of the project. On average, a garage costs about $50 per square foot. Expect a one-car garage to cost between $15,000 and $20,000 and a two-car garage to cost between $20,000 and $40,000.
The average garage will achieve a 75% to 85% return on investment. This means that the project will increase the value of your home by around 75% to 85% of what you spent on the garage.
Although you shouldn’t expect to recoup all that you spent on the project, building a garage offers one of the best returns of any home improvement job. Not only do you get to recoup around 75% of your costs when you sell your home, but you get to enjoy all the benefits of the garage for as long as you stay there.
Garage Door Replacement
Replacing the door on an existing garage offers the highest ROI of any home improvement project. A new garage door can offer a return of almost 200%, which means it can increase the value of your home by almost double what you spent on the job.
If your house already has a garage, consider whether it’s time to replace the door. A garage door typically lasts 15 to 30 years, so if it’s nearing the end of its expected lifespan, a replacement might be a worthwhile project.
Attached vs Detached Garages
Any garage can boost your home’s resale value as long as it’s maintained properly. Deciding between an attached and detached garage can be tricky.
Most home buyers prefer an attached garage because it makes for such an easy and comfortable transition from the car to the home. In some cases, though, buyers prefer a detached garage because the structure could be repurposed into a studio or workshop.
The current size and layout of your house and lot may dictate whether an attached or detached garage is better. If there’s nowhere to build an attached garage that looks and feels natural, you’re probably better off building a detached structure. Detached garages can offer more flexibility and can be less imposing.
Detached garages usually cost more to build because you have to construct four new walls and install the utilities. Attached garages share a wall with your home and can share your home’s electric, saving on construction costs.
As an alternative, you could purchase a prefab garage, which is a detached garage that’s partially or fully built off-site and then transported to your home. Prefab garages are less expensive, but they also add less value to the property.
Regional Differences
There are some significant regional differences in the resale value of garages. Building a garage offers the strongest ROI in areas where having a garage offers the most benefits.
For example, in cold climates, a garage can dramatically improve your quality of life in the winter. You don’t have to bruimpactfulsh snow or ice off your car after a storm, and you can comfortably transition from your house to your vehicle without stepping foot outside. In areas with temperate weather year-round, a garage may not be as impactful.
Garages are also highly valued in cities with limited parking. Being able to safely and reliably park your car on your own property is considered a luxury in some urban centers.
Impact of a Garage on Appraisals and Taxes
Building a garage will almost certainly increase the appraised value of your home. As part of the appraisal process, your appraiser will compare your house to similar properties in the area. If it’s the norm to have a garage in your neighborhood, building one will bring you up to par with the comps. If garages are less common, your house could be valued higher than the neighboring properties.
Unfortunately, because building a garage increases the value of your home, many homeowners discover that the project increases their property taxes as well. However, consider whether the benefits of having a garage, including the boost to your resale value, offset the property tax increase.
Is Building a Garage Worth It?
Building a garage is an expensive project, but it can pay off. Garages offer plenty of benefits for you as a homeowner, and they provide a great return on investment when you sell.
If you’re looking for home improvement projects that increase your house’s resale value, building a garage may be the right choice. For more guidance on how garages affect home valuation in your area, you can consult with a trusted local real estate agent.
