Selling a home is a bit of an ordeal. There are many different factors at play, some of which are intangible but incredibly important, like the health of the housing market. Obviously, you want to get as much for your house as you can, but there are very few home improvement projects that actually recoup the building or installation expenses. However, when done right, decks can be a great addition to your home. So today, we’re going to answer the question, Does a Deck Add Value to Your Home?
The short answer is yes, decks do add value to your home. On average, a deck can add $10,300 to your home’s resale value. But before you head to the hardware store or call up a contractor, you need to know that certain types of decks will add more value than others.
Read on to find out how to get the most value out of a deck as we explore contributing factors like materials, design, climate, neighborhood, and return on investment.
Recouping Your Cost
Looking at how much value a deck can add to your home is only part of the picture. To accurately assess whether adding a deck is a good idea, we need to look at cost, as well. The fact is that, no matter how much or how little you spend on any home improvement project, the chances of you making a profit in the end are slim to none. It all comes down to cost vs value.
Cost vs Value
While the housing market largely determines the value of any given home, it also depends on the prospective buyer’s expectations. Getting into the nuances of the housing market is beyond the scope of this article and may be awesomely boring for some, so I’ll skip it.
To simplify things drastically, let’s assume that any given home improvement project will not recoup 100% or more of its cost. This does happen on occasion, but it’s very rare and is usually tied to a particularly aggressive regional housing market.
So, the best you can hope for when installing a deck is somewhere between 65% and 85% of the cost of the project. Of course, if you have the skills, the time, and the inclination, you can build a deck yourself, possibly even recouping 100% or more of your cost.
However, if you (or someone else) builds a sub-par deck, it could hinder your resale value instead of helping it.
For most homeowners, installing a deck will get them an average of 75% of their cost back when they sell their house. In order to hit that mark, there are some things to keep in mind.
There are a ton of different options for decking materials. From low-end, pressure-treated lumber, to cedar and redwood, to exotic woods like ipe and mahogany, to composite, synthetic, or aluminum decking. It’s easy to assume that, the better the material, the higher the return on your investment, but this isn’t the case.
According to various reports, the best ROI (return on investment) comes from building a deck with low to mid-range materials. Namely, wood. According to the 2020 Cost vs Value Report from Remodeling, wooden decks recouped 72% of their cost, while composite decks recouped 67%.
But this isn’t absolutely true across the board. When looking to get the highest ROI for your deck, you need to look at your neighborhood, too.
Neighborhoods are a big factor contributing to the cost and desirability of a house. The same goes for the value of a deck addition. If you take a look around your neighborhood and see that most homes have wooden decks, chances are prospective buyers will expect your home to have one, too. If this is the case, you may have a hard time recouping 70% or more of your cost.
On the other hand, in a neighborhood where decks are rare, it’s possible you could get an above-average ROI, provided everything else about your home is up to snuff for your neighborhood.
Make the Materials Match
The same concept holds true for the materials you use. While standard wooden decks provide the best ROI, on average, it may not be the case if you live in a high-income neighborhood. Building a wooden deck in a neighborhood with million-dollar houses will probably hurt your chances of a high ROI.
You’ll want to choose materials that fit well with the area in which you live. Exotic hardwoods or composite materials may be appropriate in these cases, and could give you a higher percentage return.
Features and Design
It’s also important to look at how features and design will affect your investment. A multi-level deck with a hot tub and an outdoor kitchen is nice, but the amount you spend on that installment won’t make your ROI percentage any better, in most cases.
Of course, this is also an appropriate time to keep up with the Joneses. If your neighbors have fancy decks with kitchens and hot tubs, it may be appropriate for your addition.
On the other hand, if none of your neighbors have fancy decks, and you install a lavish one, don’t expect a great return. It’s best to only go a small step above what’s normal in your area for the best recoup percentage. Don’t forget that a hot tub and a big, lavish deck both require maintenance in the form of time, money, or both. In some neighborhoods, this may be too much for a prospective buyer.
The passage of time is another factor to consider in regards to a deck addition. After all, wooden decks will begin to fade a little bit over time. An appraiser will look at the state of your deck, and prospective buyers may be turned off by faded, warping deck boards.
Generally, the sweet spot for adding value to your home with a deck sits between one and five years. So, if you don’t plan on moving within five years, you’ll probably want to focus your decision to install a deck on your own preferences, rather than through the lens of added value.
Of course, you can extend this sweet spot by keeping up with yearly deck maintenance. A well-maintained deck will add more value to a home than a poorly-maintained one, even if they both cost the exact same amount to install.
Wood deck maintenance factors include:
- Yearly cleaning
- Sanding and re-sealing every 1 to 2 years
- Keeping on top of repairs
- Protecting the deck from furniture
- Replace rotten or warping planks
- Inspect support structure and hardware every 1 to 2 years
Local Building Codes
In most areas, you’re required to have building permits for any deck that’s attached to the house or situated over 2 1/2 feet off the ground. Building a deck without a permit can come back to bite you when it’s time to sell the house. In most cases, you’ll have to work out a discount or take it upon yourself to make the deck legal. Sometimes this means you’ll have to tear it down.
Either way, a deck built without a permit is likely to wipe out any potential return on investment you could have enjoyed upon selling the house. So, it’s always a good idea to check local laws and building requirements before installing a deck.
Climate and Location
Similar to the section about neighborhoods, climate is also a big factor in determining the value a deck adds to a house. Material and labor costs vary by region, and so does the apparent worth of an outdoor addition. In areas where the climate is conducive to lots of time outdoors, a deck will probably yield a higher ROI than a place where it’s cold 8 months out of the year.
Some areas have very low material and labor costs, but the climate determines that the addition of a deck is not high on the list of desirable traits potential buyers look for. If you live in an area with a nice, mild climate most of the year, and low costs, a deck addition might yield you an ROI of 80% or more.
Maybe you’ve noticed that we haven’t mentioned a major factor in most people’s deck-decision processes; enjoyment. When we talk about value, it’s not all about dollars and percentages, it’s also about your happiness. Would a deck provide you and your family with a nice place to gather and spend time outside? If so, all the talk about ROI may be secondary. For those who plan to spend many more years in their home, this might be the only value factor that they consider.
For parties, gatherings, barbecues, sunsets, enjoying cold (or hot) drinks, lounging, meditating, sunbathing, and many other activities, a deck can be a priceless investment. For a nice, comfortable place to enjoy the weather or a view, there’s nothing that can provide more value than a deck.
Adding a Deck to Your Home: Is it Worth the Investment?
Decks are one of the better home improvement projects when it comes to a return on investment. On average, a professionally installed deck built with low or mid-range materials can provide you with a 75% return on investment. You won’t make all of your money back, but if you spend some time enjoying the deck before you sell the house, it may be more than worth it.
Of course, don’t forget about all the factors that determine this investment. Things like maintenance, climate, neighborhood, materials, the housing market, time, and design can all impact the deck’s value. But it’s also an emotional investment. If it will increase your quality of life, it may be worth it no matter what the numbers say.