How much does a garden shed add to the value of a home?

swampwizJanuary 29, 2010

Here's my situation. I will be buying a home for $40K and then adding a 150 ft^2 garden shed (the shed will be placed under the carport) that I'll say for the sake of argument will cost $4K. As I will be filing for Chapter 7 bankruptcy right after these purchases, I will need to put down the value of the house. My question is how much would the garden shed add to the value of the house. I plan on affixing the shed to the structure of the house, so in one sort of way, it can be considered as an add-on.

Should I just presume that a shed would lose 50% value, or should I conclude that it would really add no value. I suppose that as long as I could reasonable presume it one way or another, I would be be legal. Of course, the bankruptcy trustee is going to see a bunch of cash advances coming out of my account, so I would be accounting for all of them, including the shed.

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mariend

Bankruptcy rules have changed completly and many things that were allowed just a few years ago, would not be allowed now. My relative just went thru it and they look at everything. What state are you in? Where he lives he had to get a lawyer, go in front of the court judge twice, and now a third time and prove why he could not pay. I would think twice and besides it is not fair to others to delibertly buy something and not pay for it.

    Bookmark   January 29, 2010 at 10:05PM
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swampwiz

I didn't ask for an ethics lecture. As for my situation, I was given a grant from the state of Louisiana to buy a replacement home for the one that was destroyed in Katrina. The purchase of the house is merely in fulfillment of the terms of that grant. BTW, I was not planning on filing bankruptcy, but my finances have deteriorated to the point that basically all I have left is the money to buy this house and modestly furnish it.

You may be thinking that I will be buying the home with a mortgage, and then welching out - no, I will be buying the home with cash. My last use of unsecured credit was around June, and that basically only survival use since almost year and a half ago - before the dark times. My net income for 2009 was -$20K (all capital loss, no regular income), and I'm taking another $12K loss this year on a lot that I had to sell to come up with the cash for the home. Your relative is probably someone with a income just over the median, in which case he needs to prove that his income after bare expenses (i.e., the means test) is below the median. My income is well below the median.

I had wanted all along to build a dream home (look at all the questions I had posted in the last year!), which I would have been able to get financed at the super low rate of 2.7%. But that had to be abandoned because a 40-something year old software developer and aerospace engineer with master's degrees is unemployable when contrasted with cheap indentured labor from low cost countries like India - but I digress ...

    Bookmark   January 29, 2010 at 11:18PM
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creek_side

I have a suggestion. If you don't want people to comment on your bankruptcy, don't mention it in your post, especially when your wording leaves the impression that you are trying to game the system.

As to your house. A shed under the carport that is permanently attached to the house, would devalue both in my eyes.

    Bookmark   January 30, 2010 at 6:53AM
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ncrealestateguy

swampthing,
A 150 sq. ft. shed will fetch about $250. A carport fetches about $2500. After figuring that you now do not have a carport, the net value is 250 - 2500, which equals a negative $2250.

    Bookmark   January 30, 2010 at 7:00AM
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Sophie Wheeler

What you are proposing to do is likely not allowed by building codes. An outbuilding is an out building, and has certain setback requirements to be able to be constructed. Those include a certain minimum distance from both the property lines and the home structure itself. If you want to add an addition on to your home, you will be required to go the conventional route and plan and permit it as an addition. You're not gonna get away with calling a $400 shed attached to your home an addition. It will have to be constructed utilizing conventional construction techniques and to current building codes. In other words, it will be a lot more costly than you realize to do what you want correctly, or a lot more costly to do it incorrectly when they get around to citing you and fining you.

    Bookmark   January 30, 2010 at 11:12AM
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western_pa_luann

So why even spend the money on an outbuilding at all???

    Bookmark   January 30, 2010 at 8:04PM
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Beemer

Ethics is a part of every thing we do. By spending 4000.00 on a shed and then skipping out on other bills is just plain wrong.

You brought it up -- Yes I'm harsh -- but this sounds irresponsible.

    Bookmark   January 30, 2010 at 8:53PM
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susanjn

Swampwiz,

What is the point of adding the shed? And why in the carport?

    Bookmark   January 31, 2010 at 10:54PM
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idrive65

A shed under a carport wouldn't add any value in my eyes if I were home shopping. Even a big shed out in the yard, with windows and siding to match the house, would be nice but wouldn't make me offer more for a house.

    Bookmark   February 1, 2010 at 8:41AM
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mrsmuggleton

I don't understand the OP. Why would anyone buy a house, add a shed to the property (under a carport...eek!) and then file for bankruptcy.

    Bookmark   February 2, 2010 at 7:27AM
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alabamanicole

swampwiz, if you want options and are willing to relocation, look for jobs in Huntsville. An aerospace engineer with recent work history, regardless of age, is VERY employable here. We're desperate for engineers.

Regarding the garden shed, I would skip it for now. It seems like a needless complication in the middle of your financial situation. Alternately, look on freecycle for an old shed someone is giving away that you can move to your home.

    Bookmark   February 2, 2010 at 8:54AM
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stolenidentity

I think you should conclude that it would really add no value, or even might reduce the value. I don't understand what the purpose of this shed is, but if it is to increase the value, I can't imagine it will do so. Good luck to you.

    Bookmark   February 4, 2010 at 5:29PM
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swampwiz

I need the shed for the room. I want it under the carport so that it would be protected from the sun and be convenient to be moved away (i.e., I intend to buy another house in the future, and would simply use this shed as the regular shed that would be in the yard.) The only reason I need the extra value is that I need to put it on my bankruptcy form. I will just presume that it adds no extra value, and just let the bankruptcy trustee come up with a value. (I'm still probably going to be well below any threshold to have any home equity over the homestead exemption.)

It is not a needless complication since I will doing a bankruptcy, and the money that I would be devoting to the shed would simply go into the bankruptcy estate instead. By buying the shed, it becomes part of my homestead, and therefore I get to keep it. Yes, I know, I'm a horrible cad that will be doing what every corporation had done in a similar circumstance. I am in the perfect situation to take advantage of the bankruptcy laws, just like Donald Trump was in the early 90's, so I am going to go for it.

As for the aerospace jobs in Huntsville, even if I wanted to, I could not move there since I was given a disaster grant from the state of Louisiana that compels me to remain in Louisiana. And besides, I have heard stories of rocket engineers there who have been reduced to driving the courtesy van for a car dealership, and and other horror stories. And the government is fixing to cut NASA to the bone because the Republicans and their tea partiers suddenly have found Jesus in deficit control (where were they during W's time?), and since the Democrats are scared to raise taxes, all non-essential government activity will be cut. There will be major layoffs in the business.

I guess that my next question is how much to move a shed. It can't be that much since I was earlier looking at moving an 800 ft^2 house (!) and it was only going to be a few thousand $.

    Bookmark   February 15, 2010 at 1:16PM
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