Tag Archives: ROI

What is Return on Investment of Adding a Barn?

What is Return on Investment of Adding a Barn?

Reader STACY in HOBE SOUND poses an interesting question:

“What is the national average ROI of adding a barn?”

In the 1980’s my family and I lived in what was probably the nicest area of Salem, Oregon. Many of our neighboring homes (and ours) had been featured in home shows.  Our particular home was just over 3000 square feet (sft) spread across four levels.

During my ownership we made many improvements – outside we added an eight foot tall 1×6 tongue and groove cedar fence, a custom in-ground gas heated swimming pool and enlarged existing decks. Inside we added roughly 1000 sft of living space featuring a free standing wood stove on lowest level and a brick fireplace within Master Bedroom, plus a third garage stall.

We paid $130k for it in 1982 and sold it seven years later for $164k. Our ROI (Return On Investment) was poor (as in negative) as we took our neighborhood’s nicest home and built beyond what our market would support. We did get to enjoy our homes features during our time there, however as far as an investment, it was a poor one.

Your (or any) barn could face similar challenges, depending upon your property’s particular circumstances. In most cases, a well-constructed, engineered post frame barn will be worth more at completion, than it cost to construct and will appreciate over the years to follow.

Often, people assume a barn will increase their property value – not necessarily true. Although you may not plan on moving anytime soon, it’s important to consider the resale value of your building and property.

According to Realtor Magazine, a large, attractive garage or storage building adds curb appeal and resale value to your property. In fact, lack of garage or shop space is a deal breaker for some home buyers.

Luckily for you, a post frame building is a flexible and durable construction method. You can combine your shop, garage, recreation area with storage room to appease future buyers.

To satisfy your curiosity, consult with a Realtor prior to making improvements. They should be able to give you an idea of your property’s value both now, and after your new post frame building is completed.

4 Energy Reasons to Invest in an Energy Saving Pole Barn

4 Unexpected Reasons to Invest In Energy Efficient Post Frame Design

Post frame buildings are increasingly being looked at from the standpoint of being energy efficient in their design. Regardless of the usage of the building, the costs of energy are not likely to decrease in future years. With the ability to easily create deep wall and roof cavities for added insulation, post frame buildings are more and more being looked to as the best design solution.

Cutting operating expenses beyond your utility bill

Of course, a better-operated, greener building uses less energy, improving its operational efficiency can make deep cuts to operating expenses. But positive returns can be delivered elsewhere too.

Many states and local governments offer tax incentives for green building certification to encourage lower utility usage and building carbon emissions. For example, the state of Nevada offers property tax incentives for new commercial buildings which achieve a certification from LEED or Green Globes. This incentive translates to a savings of 25-35 percent of the general fund portion of property taxes, delivering a direct and significant reduction to the operating expenses.

Access to better financing

Improved energy efficiency (and associated green building certificates) can open the door to better financing. Identifying and implementing specific energy efficiency and water conservation measures is a prerequisite for many financing programs which offer favorable conditions (such as discounted interest rates, preferred pricing or additional loan proceeds) for loans made on “green” buildings.

A compliance issue

Many older buildings were built before, or to emerging and now much outdated, energy standards and do not meet the requirements set out in modern building codes. Many local jurisdictions are enacting energy benchmarking and disclosure laws which require building owners to quantify and report their buildings’ energy performance.

Several states and local government are even taking it a step further and mandating green building certifications for new construction.

Getting the most out of energy efficiency investments

Changing regulatory, social and market pressures continue to drive the Return On Investment (ROI) of energy upgrades. For example, tenants demand greener buildings (and are willing to pay a premium for it); investors are being asked to demonstrate sustainability; and improved energy efficiency opens the door to tax credits, incentives and more favorable financing conditions. To extract the greatest return, building owners need to stay informed about all financing mechanisms and incentives, and determine what the best and most appropriate level of upgrades will be. In today’s market, it certainly pays to go green— by seeking out energy-efficient assets and by investing in upgrades to improve the building’s sustainability.