Often times, when clients are considering moving to an acreage, they are looking for more space and an opportunity for more storage in the form of a second garage or detached shop. Having the space on an acreage is the key factor that enables this type of luxury.

When considering either purchasing a property with accessory buildings, or building an accessory building on a current acreage, there are couple key elements to keep in mind.

Financing

If you are using a residential mortgage to finance the property, the guidelines stipulate that only the house and detached garage can be used to value the property. This can be a real issue when it comes to larger accessory building because even if it drastically increases the overall value of the property, it dramatically increases the amount of cash needed to purchase the property. This is the single biggest factor that either kills a real estate deal or prevents a seller from getting the true value out of the shop that they built.

One exception to this issue is that if the accessory building can be proved to generate in access of $6,000.00 of gross revenue through agricultural means, Frame Credit could be used to fund the home and accessory buildings as a whole.

An example of this would be a barn used to board horses, or riding arenas used for farming. Businesses like corn mazes or petting zoos do not qualify.

The second exception is if the property is going to be used for commercial purposes as well. As an example, if the client has a plumbing company and the shop is used for the business, a commercial mortgage can be applied for and funded.

Permits

In the past there has been a tendency to build on acreages without permits for the accessory buildings. This becomes an issue from both a liability standpoint, as well as a resale standpoint. A bank or appraiser cannot consider buildings that have not been built with the correct permits, which again affects the overall value of the property.

Cost of building

In recent years, the most common type of accessory building on acreages is a “straight walled” building. Examples of this are traditional garages and larger “pole” sheds. The two basic types of accessory buildings are either cold storage or heated four-season buildings. Typically the cost materials and labour for cold storage is $17 per square foot, depending on height, doors and windows. The cost for heated a four-season building with a concrete floor and finished interior is about $35 dollars per square foot, again depending on finish, height, doors and windows.

Keeping these things in mind when expanding on your farm or acreage are important, and a great contractor can help you when the time comes to build.