Is Outdoor Living Space Always a Good Investment?

The monetary returns of indoor-outdoor living options may be low, but the personal benefit can pay off.

U.S. News & World Report

Is Outdoor Living Space Always a Good Investment?

Outdoor living

Indoor-outdoor living features are gaining popularity across the country.(Visbeen Architects/William J Hebert)

Whether it's a luxurious swimming pool and cabana, an open-air kitchen and dining area or a cozy fire pit for roasting marshmallows, you’ve likely dreamed of having one, if not all, of these amenities at your home.

You’re certainly not the only one dreaming of outdoor living. Homebuilders, residential architects and landscape construction specialists are seeing more and more homeowners looking to include outdoor living – or better yet, a design that allows for a flowing indoor-outdoor living space – in their home design.

Even in parts of the country where cold winter months keep most people indoors, homeowners are seeking outdoor living options that allow them to get more enjoyment out of the exterior of their home.

“It’s not uncommon anymore to have an enclosed porch or some type of full outdoor area that’s covered,” says Woody R. Fincham, vice president and Virginia regional manager of appraisal company The Trice Group.

Earlier this month, the American Institute of Architects released the results from its second quarter 2017 Home Trends Design Survey, which reported requests for outdoor living have increased for the sixth consecutive year. In fact, 70 percent of the 500 architecture firms surveyed reported an increase in requests for outdoor living from clients.

The survey measures reported increases in client requests for certain types of rooms, which AIA Chief Economist Kermit Baker says helps reflect the expanding popularity of a particular trend. The history of the survey shows when trends go out of style, as the home office did post-recession, when it had previously been seeing growth in requests. The survey has also shown when special-function room requests become the standard – Baker notes the "great room" concept with an open layout between the living room and kitchen started as a trend, but is now the standard for home design.

For outdoor living, respondents report continued growth in popularity. “That seems to suggest we’re not going to see any slowdown anytime soon – it’s still building momentum and still not in every place yet,” Baker says.

It’s also possible that the concept of transitional indoor-outdoor living will become the norm in new construction, similar to an open floorplan. Wayne Visbeen, founder of Visbeen Architects, a home design firm based in East Grand Rapids, Michigan, says nowadays 100 percent of the homes his firm designs throughout the U.S. include indoor-outdoor living.

But it’s not just fire pits and grill stations – transitional living design is changing to better adapt to individual homeowners’ desires and climatic restrictions.

A Different Kind of Home Addition

As its popularity grows, the concept of outdoor living is quickly evolving to take on new meaning. Rather than a simple dining set on a patio, people are opting for porches with a switch to transform the space into a screened enclosure, or door walls that open completely for a smooth transition from the indoors out.

“It is just as important in our cold states as our warm states. And now with the invention of a lot of different products, we can add them seamlessly, as well as make use of those spaces for longer in the year,” Visbeen says.

He points to NanaWall systems, which are framed floor-to-ceiling glass panels that can open to the outdoors, and Phantom Screens, which engineers retractable screens for doors and windows. Visbeen notes the options allow for more insulation in rooms that would otherwise only be able to be used when the weather is warm.

(Visbeen Architects/Ashley Avila)

But before you purchase a custom home in the middle of Minnesota, complete with a wall of windows that opens up into a backyard kitchen and living space, consider how your investment will fare in the long run.

The Return on Investment Isn’t Always There

Despite the fact that homeowners appear to be generally excited about outdoor living features, it doesn’t mean you’ll be adding significant value to your home by sprucing up the patio.

“They can be an overimprovement in certain markets as well. But really, what determines that is how many participants in the market are doing these types of things,” Fincham says.

Whether your indoor-outdoor living options have a positive effect on your home’s value is based on what people in similar houses are doing. The same applies to a swimming pool: If every house in the neighborhood has one, yours is key to keeping your home’s value on the high end with similar houses. If no one else has a swimming pool, the fact that you have one doesn’t add much value, if any.

In northern states where frosty winters keep leisure time outdoors to a minimum, spending tens of thousands of dollars on an outdoor living space likely won’t give you the same in monetary return when you sell. In a state like Arizona, on the other hand, indoor-outdoor living can be considered a valuable addition to appeal to future buyers looking to be able to enjoy outdoor living in the year-round heat.

Fincham also stresses that while higher-end homes in a market may benefit from including indoor-outdoor living options, it doesn’t mean the starter homes in the same city will receive a similar boost.

If you purchased a home on the lower end of the market and are living below your means, adding features more common among the higher-priced properties won’t necessarily mean you can sell your house for more. At the end of the day, the people who want to buy a house in a starter-home neighborhood are looking for starter-home prices.

“It doesn’t often translate out into any additional value one way or another because they’re doing something no one else in their marketplace is doing,” Fincham says.

Measuring the Whole Benefit

Even if no one around you is embracing indoor-outdoor transitional living yet, you may still want that outdoor fireplace and TV. When you consider the potential personal enjoyment and take a look at some of the outdoor living options that can serve as an indoor space, the cost may be well worth the net benefit.

“People are so busy; they’re so involved in their jobs and their activities that when they have a chance for some peace and rest, being able to sit even in their small backyard – if that’s what they have – if they can get a little piece of paradise or resort living in their backyard, they’re going to try to find it,” Visbeen says.

That’s not to mention the fact that adding features to an outdoor space or including them in a new home’s design can be cheap compared to upscale renovations inside your home.

“The outdoor space is, relatively speaking, inexpensive compared to doing something formal inside the house,” Baker says. “And it’s also an affordable option to add a little footprint to your home that doesn’t overwhelm the design of the home.”

Any change to your home that costs money should be measured for the monetary cost and potential return on investment you’ll receive at the time of sale. But with the variation in cost you have with outdoor living or transitional living options, the enjoyment you get should also be carefully considered.


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