How much does a garage add to home value?

A newly built garage with fresh paint, organized shelves, gardening tools and several bicycles.Image: A newly built garage with fresh paint, organized shelves, gardening tools and several bicycles.

In a Nutshell

A garage can add tens of thousands of dollars in value to your home while providing safe storage for your belongings and protection for vehicles.
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A garage can increase your home’s value by tens of thousands of dollars while protecting your vehicles and providing safe storage for your belongings.

If you’re considering adding a garage, it’s important to know how much the project might cost, whether it’s a good investment and how you could finance construction.

Here’s what you need to know about the process to determine whether it’s the right move for you.

Does a garage add value to a home?

A garage can add significant value to your home — between $12,750 and $33,150, according to HomeAdvisor. A garage can also add functionality to your home, with a number of benefits we’ll review.

Vehicle protection

In addition to helping protect vehicles from theft, accidental collisions and vandalism, a garage can shield your car from the elements, which can fade the paint and cause dings or scratches. These potential hazards can affect the value of the car.

A garage can help lower your auto insurance premium too, since some insurers offer discounts to customers who park their vehicles in a garage.

Additional living space

Instead of using it for a vehicle, you may decide to turn the garage into a spare room, den or office. Depending on your building plans, you may be able to add living space above the garage on the second story.

Flexible space

Even with a car parked in the garage, you may also be able to use some of the space for other purposes, including storage, a workshop, an exercise area and more.

How much value does a garage add to a house?

A garage can increase your home’s value, adding between $12,750 and $33,150, according to HomeAdvisor, which says you’ll typically get back between 75% and 85% of your investment when you sell your home.

When it comes time for you to move, a garage can draw more prospective buyers, making it easier to sell the property. A 2019 survey by the National Association of Home Builders found that 85% of homebuyers wanted garage storage as a home feature.

If you already have a garage, making some improvements could be worth doing as well. A garage door replacement, for instance, can be a low-investment upgrade for your home. According to Remodeling magazine’s 2023 Cost vs. Value report, the average return on investment for a new garage door was nearly 103%.

How much does it cost to build a garage?

The cost of building a garage can vary depending on several factors, including your location, the size of the garage and the cost of materials and labor. Whether it’s attached to the home can also affect the cost.

The national average cost for all garages — attached and detached — is $28,222, according to HomeAdvisor. The typical range is $16,454 to $40,261. Here’s a quick summary of what HomeAdvisor says to expect based on the size of the garage you want.

Size of garageAverage price range
Source: HomeAdvisor

Building a detached garage will likely cost you 10% to 15% more than an attached garage, according to HomeAdvisor. There are also other costs that can add to the overall cost of the garage, including the following:

  • Lighting
  • Shelving
  • Flooring
  • Temperate control
  • Insulation
  • HVAC
  • Plumbing
  • Door opener
  • Second-story living space

Is adding a garage a good investment?

While you may be able to get a portion of your investment back when selling your home, make sure to consider the costs and how long you plan to live in it.

If you’re thinking about moving within a year or two, for instance, you may not be able to use the space long enough for it to be worth the difference between the cost and the added value. But if you plan to stay in your home for a long time, it may be worth the expense.

But even if you plan to move within a few years, a garage can make your home easier to sell. According to a 2021 study by the National Association of Home Builders, 42% of recent and prospective home buyers prefer a two-car garage over any other parking option.

If you’re thinking about adding a garage, it’s a good idea to work with a contractor to develop a design for the space and get an estimate of what it would cost. This can help you figure out whether a garage is a good investment for you.

How to pay for a garage

The average cost of building a garage can be substantial. Paying cash is typically the best and cheapest way to fund a home improvement. But if you need to finance your project, here are some options to consider.

Home equity loan

A home equity loan lets you tap into the equity that you’ve built in your home by borrowing a lump sum amount. Interest rates are generally fixed, so your rate and payments will be the same for the life of the loan.

Keep in mind that many lenders prefer that you don’t borrow any more than 80% of the equity you have in your home.

Home equity line of credit

A home equity line of credit, or HELOC, is another way to borrow against the equity you’ve built up in your home. A HELOC gives you a revolving line of credit that you can use during a draw period, which often lasts between five and 15 years.

During that time, you can make interest-only payments or pay down some of the principal balance and re-borrow as needed. Once the draw period ends, you’ll typically start making full monthly payments over 10 to 20 years. HELOC interest rates are usually variable, which means your monthly payments can fluctuate over time.

Keep in mind that if you default on a home equity loan or HELOC, you could lose your home.

Personal loan

Home improvement loans can range from $500 to $100,000 with major lenders. Repayment terms typically range from one to seven years.

Because they don’t usually require collateral, personal loan interest rates — which are usually fixed — may be higher compared to other options, especially if you don’t have strong credit. Some lenders charge upfront origination fees, but that’s not always the case.

Before you decide how to finance your home improvement project, carefully research and consider all of your options to make sure you choose the best course of action for your situation.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.