Adding a Deck: A Cost-Effective Way to Protect Your Home’s Value

Outdoor living spaces can increase your home's appeal at a lower cost than an additional room.


With Old Man Winter upon us, building an outdoor living space—like a deck—might not seem like a particularly appealing proposition for many homeowners. But as the housing market continues along its downward slope and the economy teeters on the edge of a recession—if it's not already in one—building a deck can be a smart way for property owners to maintain or even improve their home's value. After all, it's less expensive than building an additional room but still enables homeowners to expand their living space. "It's safe to say that a deck is one of the more cost-effective things you can do," says Robert Markovich, home and yard editor for Consumer Reports. "Decks are really a high-return item."

Remodeling Magazine's Remodeling Cost vs. Value Report for 2007 found that more than 85 percent of the cost of building a wooden deck could be recouped during resale—compared with 78 percent for a bathroom remodel and 69 percent for a family room addition. "When most people build a deck, it adds pretty much dollar-for-dollar [value]," says Michael H. Evans, president of Evans Appraisal Service in Chico, Calif. To find out more about the costs and benefits of outdoor living spaces, U.S. News turned to Paul Mackie, the western area manager of the Western Red Cedar Lumber Association. Mackie explained why building an outdoor living space is a smart move in today's uncertain economy. Excerpts:

What does an outdoor living space do for the home as a whole?

If you have people over at your home—whether it's family or whether it's friends—where does everybody [gather]? Everybody is hanging around the kitchen while the hosts are preparing the meal, beverages, and hors d'oeuvres. Well, the advantage to this outdoor living space is that you now have [an additional] outdoor work area where you can be working and preparing for the guests. It also defuses the concentration in one area of the home. But if you are looking to get more space, why not just build another room?

If you're building outside, it's going to be less expensive. Building an outdoor living space is the most affordable way to expand your home. If you add rooms, you are adding insulation and wiring and roofing and all of that. If you expand your outdoor living space, like with a deck, [you don't have to do that]. This is a trend; people are expanding their decks. In some cases, they are adding built-in furniture. Others are building in the barbecue and plumbing to have running water and have refrigerators. The budget is the only limiting factor. How much money can you save by building a deck instead of an additional room?

[Building an outdoor living space costs] somewhere in the range of half as much as an addition onto the house itself. I would expect that you should be able to build a deck for less than $100 a square foot, but that's going to vary from market to market. I would expect that if you are talking about adding rooms, you are talking about—here in Washington state—about $200 to $300 a square foot. So it's a very efficient way [to add value to the home]. In addition to decks, what other types of outdoor living spaces could homeowners consider?

The other way is to add outdoor structures. So maybe you have a flat lot that might not be conducive to a deck. Instead, you have some sort of a patio. It isn't necessarily a wooden deck, but you can still add privacy screening to create an intimate seating area. There are some that will add a gazebo in a separate spot in their outdoor backyard that could act as a reading room if you like. And those things can either be constructed from scratch—customized—or there are those that make gazebo kits and outdoor structures in a wide variety of styles and sizes. How much would a gazebo kit cost?

I've seen some of them for $2,000 to $3,000, up to $10,000, of course. But again, it makes a big impact in terms of what it does to the back yard. I know a real estate agent who is selling houses down in the Southeast in the $1 million-to-$2 million range, and she has acquired a gazebo to improve her backyard. She has actually photographed it and is going to use [the photo] with her clients to show them that you can add this thing for $6,000, and you can [really improve the appearance of] the backyard of your home. The whole purpose of this is to start the thought process of how you can really expand these spaces.