Adding backyard pod, increase home value?

Question

Hi,

Just a general question here. Would adding a backyard pod with AC, no bathroom, add value to your home?

We are considering buying a $1.25 million home in Austin tx to live in. We will likely be in the home at least 5 years. We are thinking of adding a backyard pod ($50k to build, permit, etc) as another office. Doing some rough math here, we would be paying $580/soft for the $1.25m home. With those numbers, can one estimate that a 200 sqft pod add $116k of present day value?

Thanks in advance!

Ryan Kelly · Answer

@Brian M. Buyers don’t think like that. They won’t care at all what you paid for it. They will compare all homes available in their price range and determine what THEY feel a backyard Pod is worth to THEM. Some may see a value add, others will see a glorified shed. It could add some value if done well, but not likely equivalent to what you will pay for it.

Colleen F. · Answer

@Brian M.  How much extra for the bathroom?, because if it doesn't have at least a bathroom  I don't think it will add value.  A little casita maybe, but at least have a bathroom.  Its basically a shed converted to an office.

Aaron Gordy · Answer

@Brian M.Depends upon the location and the comps.  Its hard to know without digging deeper into location. Some areas, it might be worth it. It all depends.

Ryan Kelly · Answer

@Brian M. a nice casita could add some value, but again it will ultimately be determined by the market (buyers) not the actual cost. There are several in my neighborhood in SW Austin.

Brian M. · Answer

For some additional context, we would use one of these pod companies that builds them. See images below.

Eliott Elias · Answer

A pool is usually a cherry on top rather than a direct value add. It may go great and sell top dollar for someone looking specifically for a pool, most cases it doesn't add value

Scott E. · Answer

Can't speak for Austin. But out here in my area if you build that pod with some cool finishes and a stylish roofline, then you stage it really nice when it comes time to sell, you would absolutely get $50k+ more for your property.

Why? Well for one, people enjoy these types of outdoor spaces whether it's used as an office, a gym, a pool house, an art studio, storage, etc etc.

But more importantly, none of the other surrounding houses in the area offer such a thing. So if your home is equal to others in the area but includes this unique amenity, buyers will pick yours over the others and pay a premium.

Bill B. · Answer

I thought you said pool not pod but I’ll use the pool as an example. If you add a $100k pool to a home in vegas, where they are very useful. You MIGHT sell before the No pool home for the same price. You might sell after the no pool home for the same price. I have 3 rentals, with pools, all because they were the same or cheaper than no pool homes.

If you find the perfect buyer, you MIGHt get your $50k back, MAYBE, with the perfect buyer. If it paid off the builders could just go door to door to sellers and offer to split the profits. They can’t, because there aren’t any. You’re “considering” paying $50k for a brand new one. Would you have paid $115k extra for a used one? I mean you’re a buyer who actually wants one.

Adding backyard pod, increase home value?

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