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Are Barndominiums a Good Investment?

Are Barndominiums a Good Investment?

Barndominiums have been growing in popularity in recent years as a unique and affordable housing option. A barndominium is essentially a home built out of a repurposed barn or shed, combining the charm and character of a barn with the amenities and comforts of a modern home. As more people consider building or buying a barndominium, a common question is whether they make for a good investment. There are several factors to consider when evaluating the investment potential of barndominiums:

white barndominium lodge style

Cost Savings on Construction

One of the main appeals of a barndominium is that they can be much cheaper to build than a traditional house. The cost per square foot for new barndominium construction can range from $50-$150, while a typical single family home costs $100-$300 per square foot to build. For those with the time and skills to repurpose an existing barn or shed, the cost savings can be even greater. Barndominiums use less material, have more basic finishes, and simpler floor plans than regular homes. This significant reduction in upfront construction cost makes them enticing for those looking to build on a budget.

white farmhouse with wraparound porch

Customization and Flexibility

Barndominiums allow for a high degree of customization during and after construction. During building, barn-style structures easily accommodate the inclusion of lofts, partial second floors, and wide open floor plans. Owners can then easily renovate their barndominium by knocking down or erecting walls as needed. This flexibility lets owners cost-effectively change the use and layout of their space over time. For example, a barndominium initially built as a single family home could be adapted into a multi-unit rental property.

black barndominium with wraparound porch

Strong Resale Value Potential

While barndominiums are still a niche market, they have been steadily rising in mainstream popularity. This growing demand combined with their relative scarcity has contributed to strong resale values. According to real estate data, the average price per square foot for barndominiums sold in 2022 was $159. This is comparable to the average of $164 per square foot for site built homes. If the current trends continue, barndominiums may appreciate at a faster rate than traditional homes. Their unique character and farmhouse aesthetic have strong appeal among buyers.

white farmhouse

Lower Property Taxes

In many areas, barndominiums are taxed as agricultural property rather than residential. The significantly lower tax assessment can translate to substantial annual savings for owners. For example, a 3,000 square foot barndominium in Texas may incur $3,000 in annual property taxes versus $8,000 that a typical home of the same size would be assessed. These annual savings bolster the return on investment of a barndominium.

white barndominium with wraparound porch

Overall, barndominiums can be a smart and lucrative investment given their lower upfront costs, flexibility, strong demand, and favorable tax treatment in many municipalities. Though still considered non-traditional, they have gained wider acceptance and their resale values reflect that. For those interested in a unique homeownership opportunity, barndominiums have a lot of upside.

Aaron Scott
Aaron Scott
Aaron Scott is a freelance writer and researcher that has written hundreds of articles for online companies in the area of construction, design, finance and automotive. He's a Southern boy that enjoys creek fishing, hunting and camping. He's rarely seen without his trusted beagle hound "Scooter"
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