Whether you're in the process of refinancing an existing mortgage loan or selling your property, you want your home to appraise at its highest value. One way to help accomplish this task is to build either an attached or detached garage. Buyers view garages as an attractive addition to a home. Having one can immediately boost the market value of your residence.
In a refinance transaction, most mortgage lenders will require you to have at least 20 percent equity in your home. If your home doesn't appraise for a high enough value, you might not reach this equity level. If you are selling your property, you want your home to appraise for at least as much as your asking price. If it doesn't, the lenders working with potential buyers of your property might not be willing to loan these buyers enough mortgage money to meet your asking price.
When determining the value of your home, appraisers consider several factors: They'll look at what sales prices nearby homes have fetched. They'll consider whether your home sits in a desirable neighborhood. They'll analyze your home's style, condition and size. They'll look at any improvements you've made to your home. A garage can make your home more attractive to a greater number of buyers. Appraisers will note this and will factor your garage into their determination of your residence's current market value.
How Much Value
How much value a garage adds to your home varies. In a recent Cost vs. Value Report in "Remodeling" magazine indicates that a garage addition that costs $48,806 could add $31,091 to a home's resale value. That means that a garage addition may recapture up to 63.7 percent of its cost.
Other Garage Improvements
You don't have to build a new garage to add value to your home. You also can boost your home's value by making less expensive improvements to an existing garage. An article in "Remodeling" magazine reports that, by installing a new garage door that costs $1,496, homeowners can add $1,132 to the value of their homes, recapturing 75.7 percent of that project's cost. A more upscale garage door replacement costing $2,720 will add $2,046 to a home's value, a recapture rate of 75.2 percent. Garage-related projects compare well with the other major projects. The magazine found that a major kitchen remodel costing $53,931 will add $37,139 to a home's value, a recapture rate of 68.9 percent. The addition of a master suite costing $101,873 will add $63,390, a recapture rate of 63.2 percent, while a bathroom addition costing $37,501 will add $20,569 worth of value, a recapture rate of just 54.8 percent.
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