Are Barndominiums a Good Investment? | 5 Reasons Why Barndos Are Better Home Options

Are Barndominiums a Good Investment

A barndominium may be a good investment for homeowners or landlords. Whether you want to live in a barndominium or rent it out, you can enjoy lower construction costs and many other advantages compared to building a traditional home.

Here is a closer look at some of the reasons if you want to know- are barndominiums a good investment?

Barndominiums Cost Less to Construct

Building a traditional home from the ground up is quite expensive, costing $100 to $200 per square foot. The average cost to build a barndominium is $30 to $70 per square foot, depending on the features that you add.

A barndominium costs $30 to $40 per square foot for basic assembly. When hiring a contractor to assemble a finished barndominium, you may pay closer to $70 per square foot.

As barndominiums cost less to construct, you can build a larger home or include more amenities without increasing your budget. You could also stick with a simple design to avoid spending a lot on the new property.

The lower cost of construction is beneficial for homeowners and landlords. As construction costs less, you may find it easier to save up the required down payment.

Spending less on construction also allows real estate investors and landlords to recoup their investments faster. Rental prices are often based on square footage, location, and amenities. You can charge the same rent for a 2,000 square foot barndominium as a 2,000 square foot traditional house.

Standard house damaged roof

You May Save Money on Repairs and Upkeep

The cost of homeownership includes maintenance and repairs. Many financial advisors recommend setting aside between 1% and 4% of your home’s value for maintenance each year.

With a $200,000 home, you may spend between $2,000 and $8,000 on various repairs and fixes. Barndominiums are less likely to require repairs compared to a standard house.

Some of the most common household repairs include damage to roofing and siding. Standard houses are often made with asphalt roofs and vinyl siding, which are both prone to damage during severe weather. Barndominiums are frequently built with metal roofs and siding. Compared to asphalt and vinyl, metal offers increased resistance to damage from wind, hail, and debris.

Spending less on maintenance makes a barndominium a better investment for homeowners. Yet, saving money on repairs is also important for landlords and investors. Money spent on repairs and renovations eats into your potential return.

Barndominiums Can Provide Increased Energy Efficiency

Insulation

A barndominium with a steel frame is not naturally more energy efficient compared to a traditional home. The metal frame is a poor insulator. However, barndominiums provide more heating and cooling options, allowing you to make your new property more efficient.

For example, barndominiums have deep wall cavities, which accommodate thicker insulation. Barndominiums can also be built with underfloor heating, open floor plans, and other features to improve heating and cooling.

Increasing the efficiency of the barndominium results in lower utility bills. You can lower your monthly expenses while increasing the comfort of the property.

Barndominiums Are Typically Built in Rural Areas

Most cities and suburbs have building codes that restrict the types of buildings that you can construct on a residential lot. For example, you may not be able to build a modular home, mobile home, or barndominium within the limits of some cities and other urban areas.

Rural areas have fewer restrictions, which is why barndominiums are typically found outside of urban regions. Many rural lots are also zoned for residential and industrial use.

Building a property in a rural area offers advantages and disadvantages. If you plan on building a barndominium as a rental property, you may find it more difficult to attract tenants in a rural area. Try to find a location that provides easy access to nearby amenities.

If you plan on building a barndominium as your primary residence, you may enjoy the advantages of living away from the city, such as lower property taxes and more land.

Disadvantages of Barndominiums for Real Estate Investment

The resale value is the main concern when evaluating whether a barndominium is a good investment. Traditional homes may accrue more value over time, which increases the potential sale price.

The average appreciation rate for residential properties is currently 14.5%. However, the current rate is due to the unique state of the real estate market. Traditionally, the appreciation rate for homes is closer to 4% per year.

For example, if your home is worth $200,000 this year, it may be worth $208,000 next year. Unfortunately, the appreciation rate for barndominiums is unknown.

Barndominiums are relatively new. The first barndominiums were built a little over three decades ago. While there are thousands of barndominiums across the United States, you can also find over 82 million standard single-family homes. With fewer barndominiums to compare, it becomes difficult to assess the resale value.

Traditional homes are also more likely to attract multiple homebuyers. Barndominiums are still considered part of a niche market of real estate. Some homebuyers may overlook barndominiums due to the lack of information on these unique homes.

The value of a barndominium may gradually appreciate or remain relatively unchanged over time. However, unlike a modular home or a mobile home, barndominiums are unlikely to decrease in value.

So, are barndominiums a good investment? If you are concerned about selling a barndominium and making a sizable profit, you may want to consider building a traditional home. For those who plan on living in a barndominium long-term or renting it out, the resale value and demand for barndominiums should be less of a concern.

Are Barndominiums a Good Investment?

Conclusion: Are Barndominiums a Good Investment?

A barndominium is a great investment, whether you are looking for your next place to call home or a potential real estate investment. As a homeowner, you should find that a barndominium offers increased comfort and lower costs.

Landlords and real estate investors should also enjoy the features of a barndominium. Spending less on construction and maintenance allows you to maximize your profits.

In the end, barndominiums are an attractive option for anyone looking to build a new residential property. Compared to a traditional home, barndominiums are less expensive to build and easier to maintain.