How to finance a detached structure and protect your home’s value

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Detached structures can be a great way to add some extra storage space to your property, better protect your vehicles and belongings, or just give your family room to spread out and grow.

There are loads of options, too. Choose a carport or garage, a shed or playhouse, or even a barn, depending on your needs and budget.

Regardless of which structure you choose, it’s important to go about your project carefully. Though a detached structure might not change your value too much on paper, if the addition is done right, it could make your home more marketable when it comes time to sell. (It also may mean a higher asking price, too).

Cutting corners on your project, on the other hand, can do the opposite, detracting from your home’s value and making it significantly less appealing and marketable. Want to make sure your detached structure adds to your property instead of taking away from it? Here’s how to finance your addition so that it’s done right.

Financing your additions

You can, of course, pay for your detached structure in cash, but considering they can cost upwards of $80,000, that might not be an option most homeowners can swing. Fortunately, if cash isn’t feasible, there are plenty of ways to finance your addition in an affordable, budget-friendly way that works for your household.

Here are just a few ways you can finance your detached structure:


Home Equity Lines of Credit — or HELOCs — can be a good way to finance a detached structure or any home improvement, for that matter. HELOCs give you a line of credit to pull from (essentially like a credit card) based on the amount of equity you have in the home. You then pay this back month over month like you do your mortgage loan.

There’s good news, too: Because HELOC rates fall when the Federal Reserve cuts its funds rate, you can get a good deal on one right now. The Fed just cut rates for the first time in over a decade last month.

Personal loans

A personal loan can also be a solid option if you’re looking to add a detached structure to your property. The good thing about these loans (when compared to a HELOC, for example), is that they don’t require collateral. The drawback, though, is that they typically have higher interest rates than home equity products. They also come with shorter terms than HELOCs, so you’ll likely need to repay the money back quicker than with other options.

The amount you can borrow for a personal loan (and the interest rate you’ll get on it) will depend largely on your credit score, income and other debts. So if your credit is less than stellar, you might consider financing your project another way.

Home renovation loans

Renovation loans, like the Federal Housing Administration’s 203k loan, can be good choices when looking to improve your home. Because they’re backed by the FHA, they come with very low interest rates and aren’t too hard to qualify for.

The FHA also allows for 203k refinancing, which would allow you to refinance your existing mortgage into a 203k loan. Unlike HELOCs, which are essentially second mortgages, this would give you the funds you need to pay for your improvements, while also keeping you to a single monthly payment. In total, 203k loans let you finance up to $30,000 in home improvement costs.

Credit card rewards

If you don’t want to take out a new loan for your detached structure, the right mix of credit cards can help you reduce the total costs of your project, while also letting you spread the expenses out over time. To start, find out what rewards your existing credit cards offer. Do any of them offer discounts at home improvement stores or other similar retailers? If not, you might consider a credit card from Home Depot, Lowes, or another hardware store that offers rewards and discounts.

If you have a cash-back rewards card, you can also consider using this to fund your project. Just make sure you use the cash rewards toward your monthly card payments, and set up autopay to ensure you don’t fall behind on the rest.

Detached structure cost expectations

The exact costs and expenses you’ll need to cover will depend on the specific detached structure you’re looking to build. While some structures cost as little as a few thousand, others can run as high as $86K, if you get all the bells and whistles.

Overall, the cost of each detached structure will depend on the following factors:

    • Your use of professional contractors
    • The site preparation required (will you need a concrete foundation poured?
    • Any windows or doors required
    • The electrical and plumbing requirements
    • Roofing, framing and siding materials (metal costs more than wood)
    • Any permits required
    • The foundation you’re using
    • Any paint, stain or decorative elements

Here’s a little more about what you can expect with each type of detached structure:


If you don’t have a garage or just need extra space to store a vehicle, a carport can be an easy and affordable choice. They can also be helpful if you need a rain-protected loading zone for kids, disabled family members or elderly residents.

The biggest downside to a carport is that it might require permits from your city. These can be tedious and sometimes costly. You will also need to check with your Homeowner’s Association and read your deed restrictions to ensure carports are allowed in your specific community.

Cost-wise, HomeAdvisor estimates a carport costs anywhere from $3,200 to nearly $10,000, depending on the features you choose. Fixr, another home improvement site, says the cost can go as low as $2,600 for a basic carport.

Boat shelters fall into the carport category when it comes to detached structures, though they will typically cost more due to their larger size and higher height.

Detached garages

Detached garages can serve many purposes. Use them traditionally, as a place to store your car, or use them for storage, as a workshop, or a combination of all of these. They’re versatile spaces that increase your home value and increase your square footage.

Unfortunately, a detached garage is going to be the most expensive structure you can add to your property, with Fixr estimating a cost anywhere from $58,430 to $86,400, on average. HomeAdvisor says the project can go as low as $16,000 if you really go bare-bones with your project.

Storage sheds and barns

Sheds and barns are also popular detached structures that can be used for both storage or personal space. A recent trend lately is the “she-shed” or “man-cave” addition, which offers residents a private, at-home retreat without too much financial investment. You can also turn a shed into a fun playhouse for the kids.

The best thing about sheds is that they’re typically quite affordable. Though HomeAdvisor estimates a range of $1,700 to $4,500 for shed, barn or playhouse additions, Fixr reports the national average is just over $2,700, making them the most affordable detached structures on the list.

The bottom line

Detached structures can be a great way to expand your property and its opportunities, but if you want to protect your home’s value, they must be done right. Use careful financing to ensure your project adds to your property’s marketability, and be sure to insure your new addition once the structure is finished. This will safeguard both your property and your financial investment.