Are outdoor arenas an asset when selling your home?

[Edinborough]

More specifically, is there a return on the investment?

We would like to move in a few years when we are done renovating the house. We have five acres with two horse paddocks (50 x 100’ each) plus a two acre turnout pasture. One run in shed with another going up this fall. No barn yet, but will put one up if making this place a “horse property” will increase it’s value.

I have heard through unreliable sources that arenas, newly graveled paddocks etc do not add any value to a property. Would love to hear from those of you with experience in this area!

[SidesaddleRider]

Well, we are in a very horsey-area, so that might be different from other locations, but from personal experience, I would pay more for a property that is horse-ready, i.e. with a decent-sized ring and barn, than one without it.

[Jealoushe]

An arena does not increase your value, sorry to say. Many farms jack their prices based on having one then sit for years untouched.

If you are competing against other horse farms in the area, a good working set up and clean and manageable with good water will put you ahead.

[trubandloki]

I have to agree with the others, a ring will not add to your resale value unless you happen to hit that person who likes your idea of a ring and is willing to pay for it. Horse amenities are like swimming pools, they cost quite a bit to install but seem to only add to the taxes and insurance bills, not the value of the property.

[horsepoor]

Having spent $$$ to put in a nice outdoor arena on our property, I’m certain it will not add that same $$$ to the value of our place. I knew going in that it wasn’t a sound investment in that way, but nothing about horse ownership is, as far as I’m concerned! Not having to board for however long we live here will make it worth every penny spent to me.

[GoForAGallop]

Is there a return on the investment? Absolutely not.

It’s not even an asset in most cases, depending on your local market. For most buyers, that outdoor ring will be an unsightly sand pit that they let the grass grow over once they purchase it.

If you really are planning to sell in that short of a timeframe, I’d make a point to make a nice grass ring…level it, add some drains if necessary, maybe put down some sort of border of rail road ties to define it. That way horsey people can have a place to ride/install a ring of their own, but non-horsey people see just a nice flat grassy area. But don’t waste money on a sand ring.

[Equibrit]

It would only have investment value to a professional horse person (depreciable asset). However 5 acres is way too small for a professional. Real estate people would always tell you that horse goodies will not sell a property. That is the opposite of my home buying experience though. I don’t much care about the house but the horse stuff is very important.

[BeeHoney]

With five acres, an arena isn’t going to add value to your property. In fact, it may even limit the number of interested buyers since an arena makes it more specifically a “horse property.”

A five acre property with fences and a small, multi-purpose barn is nice–buyers might think about what they can store in the barn or think about using it as a workspace, etc. and they might think that the pastures look nice. But, again, most buyers aren’t willing to pay much more for those amenities.

A rule of thumb is that if you are selling a property, the money that you spend on curb appeal (landscaping) and staging the interior (neutral paint, absolutely no clutter) is generally worth it, but that you will never get your money out of major improvements like barns and arenas. In a horsey area you might get back a little more of what you spent, but you’d still probably be getting less than what you paid for such improvements.

[Edinborough]

Oh wow, those sure are some eye opening replies! Thank you everyone, I’ll stick the money into weeping cherry trees for the lawn and fresh paint for the interior of the house instead, LOL.

[billie]

To add a slightly different viewpoint: 10 years ago we were looking for our first (and hopefully only) horse farm. We had a general area we were looking in and ended up looking at every available horse farm in the county. We were looking for 20+ acres and saw farms that went up to 50 acres. There was one farm on just under 6 acres that we didn’t look at simply because we wanted more land. After seeing all the other properties and finding that either the house was nice but the barn sucked (and no arena) or the barn was nice but the house sucked (and still no arena) our realtor told us there was just the one farm on 5+ acres and could we please just go see it so he would know we’d seen everything there was to see.

Lovely house, very nice barn, perfectly laid out so that all stalls feed into paddocks which feed into pastures. Water hydrants in all the right places. Nice fencing. And a professionally graded arena, not a ‘ring’ but a real arena, with lights! We made an offer in the driveway and we have never looked back.

The idea of having to come in and build the basic horse/riding necessities definitely deterred us. We found our perfect package and that was that. So … I’d say if you build something nice it’s probably you’ll find a buyer who loves it as much as you do.

[Prime_Time_Rider]

[QUOTE=billie;7723350]
To add a slightly different viewpoint: 10 years ago we were looking for our first (and hopefully only) horse farm. We had a general area we were looking in and ended up looking at every available horse farm in the county. We were looking for 20+ acres and saw farms that went up to 50 acres. There was one farm on just under 6 acres that we didn’t look at simply because we wanted more land. After seeing all the other properties and finding that either the house was nice but the barn sucked (and no arena) or the barn was nice but the house sucked (and still no arena) our realtor told us there was just the one farm on 5+ acres and could we please just go see it so he would know we’d seen everything there was to see.

Lovely house, very nice barn, perfectly laid out so that all stalls feed into paddocks which feed into pastures. Water hydrants in all the right places. Nice fencing. And a professionally graded arena, not a ‘ring’ but a real arena, with lights! We made an offer in the driveway and we have never looked back.

The idea of having to come in and build the basic horse/riding necessities definitely deterred us. We found our perfect package and that was that. So … I’d say if you build something nice it’s probably you’ll find a buyer who loves it as much as you do.[/QUOTE]

We have a farm with a similar set up, except that we built it from the ground up. We had the same experience as you looking at existing farms; either the house sucked but the barn was nice or the house was great but there was no barn and no suitable place for a barn, we bought our 5 acres and built the house, barn, riding arena and fenced our paddocks. We live in a very desirable area surrounded by similar sized horse properties with trail access, so I believe our property will appeal to horse owners.

I don’t necessarily expect to get what I invested in our arena back, but I do believe that it is an amenity that would appeal to most potential buyers.

I would recommend not breaking the bank and spending crazy money on an all weather riding arena. Ours was relatively inexpensive to install (under $10k), but we didn’t install expensive drainage.

[DHCarrotfeeder]

[QUOTE=Edinborough;7721803]
More specifically, is there a return on the investment?

We would like to move in a few years when we are done renovating the house. We have five acres with two horse paddocks (50 x 100’ each) plus a two acre turnout pasture. One run in shed with another going up this fall. No barn yet, but will put one up if making this place a “horse property” will increase it’s value.

I have heard through unreliable sources that arenas, newly graveled paddocks etc do not add any value to a property. Would love to hear from those of you with experience in this area![/QUOTE]

On the street, outbuildings that are well-designed, well-maintained, and generally appealing definitely add value. It’s usually not worth as much as they cost to build, but you should get some dimes for your dollar on resale. Consider how specialized the building is - if it’s suitable for all disciplines, it’s worth more than, say, a long narrow arena that barely allows a 10m circle.

In my experience, the bank thinks it’s worth less than the buyer and seller. Banks control the value of transactions tightly when the buyer will take on a mortgage. Banks follow appraisal values, which are changing (I hope for the better) but still tend to undervalue special buildings and services. An appraisal is not an easy thing to do, especially if comparable sales have not been recently happening or local. Appraisals tend to focus on the home and land above all, with outbuildings as a third-class asset. The appraisal, as mathematically imperfect as it may be, carries immense weight that the seller cannot usually overcome. The accuracy of the appraisal relative to market value will depend greatly on the skill and knowledge of the appraiser. Plus there is a tendency to normalize costs - so if you spent $20k importing premium footing made from crushed unicorn horns, the appraiser will generally value it like the stonedust arena across town. A buyer might value that but an appraiser probably will not. It also helps greatly if comparable sales have been taking place in your area that have similar outbuildings. So take care that even if you sell the property with an appropriate allowance for the value of the outbuildings, if the appraisal does not pick up that value, you typically lose that value or lose the sale.

David

[msj]

[QUOTE=horsepoor;7722212]
Having spent $$$ to put in a nice outdoor arena on our property, I’m certain it will not add that same $$$ to the value of our place. I knew going in that it wasn’t a sound investment in that way, but nothing about horse ownership is, as far as I’m concerned! Not having to board for however long we live here will make it worth every penny spent to me.[/QUOTE]

This is exactly how I feel about my farm. I’ve got 5 acres, a home of 2646 sq. ft., a 4-stall barn with a 60’ X 120’ indoor arena for winter riding, 5 post and rail fenced pastures, an outdoor ring, tiled and graded with drainage and with lights that’s 80’ X 220’.

Will I ever recoup even 1/2 what I have in the farm? Very very doubtful, but I will have enjoyed the time I’ve spent here. So far that’s 24+ yrs and I hope to be here quite a few more years. I put my last horse down this spring and have no plans on getting anymore so I live on my mower even more than I did when I the horses here. Do I mind that? Not on your life.

The farm it’s self has given me more pleasure than money in the bank can. :yes:

[Edinborough]

Thanks for your thoughts Prime Time Rider!

David that was very helpful information. Thanks for your time!

[Flash44]

What David said. The outbuildings and fencing and arenas do not get appraised for what you spent on them, or what they may be “worth” to a horseperson.

[js]

I agree with what has been said but will add that if you are getting ready to sell a place it might be worth while to make an arena i.e. get an area plowed, leveled, add a dump truck load of sand (what ever you can do cheaply but still look nice) and add cinder blocks with rails for a make shift dressage arena or add a few jumps. While it won’t add value it might be enough to satisfy someone looking for a horse property that has everything in place, even if it isn’t professionally done arena.

[mkevent]

We just sold our farm within 3+ months of listing it. We settled last month.

My .02…

I agree with curb appeal and staging the house. It makes a huge difference plus it takes a little off the stress when it’s time to move because you have decluttered a bit already.

We had a 7.5 acre farm that was sold to horse people, so my arena definitely helped. Since our farm was long and skinny, it wasn’t configured to be able to be easily subdivided, so that affected who would be interested in buying it. Since we lived in a suburban area (30 min outside Center City Phila), finding a horse farm in this area with a user friendly set up isn’t as common as some other places. I think having the arena made it more marketable in this case.

I didn’t invest a ton of money in my arena. I had it graded, let it set up for a year on the native soil, then added crumpled rubber footing. I added 1 inch rather than the recommended 1.5 inches. I think it cost maybe a total of 3k when all was said and done and I used that arena a lot. We were also at the farm for 27 years so I got my money’s worth.

If you aren’t planning on staying that long and wouldn’t be getting tons of use from it, it’s probably not worth doing. If your farm is set up to really only be appealing to another horse person, it may be worthwhile as long as you don’t spend a ton of money on it.

We put a lot of money in the kitchen remodel and upgraded bathrooms and I think that had a lot to do with selling the property.

[Wonders12]

[QUOTE=DHCarrotfeeder;7723567]
In my experience, the bank thinks it’s worth less than the buyer and seller. Banks control the value of transactions tightly when the buyer will take on a mortgage. Banks follow appraisal values, which are changing (I hope for the better) but still tend to undervalue special buildings and services. An appraisal is not an easy thing to do, especially if comparable sales have not been recently happening or local. Appraisals tend to focus on the home and land above all, with outbuildings as a third-class asset. The appraisal, as mathematically imperfect as it may be, carries immense weight that the seller cannot usually overcome. The accuracy of the appraisal relative to market value will depend greatly on the skill and knowledge of the appraiser. Plus there is a tendency to normalize costs - so if you spent $20k importing premium footing made from crushed unicorn horns, the appraiser will generally value it like the stonedust arena across town. A buyer might value that but an appraiser probably will not. It also helps greatly if comparable sales have been taking place in your area that have similar outbuildings. So take care that even if you sell the property with an appropriate allowance for the value of the outbuildings, if the appraisal does not pick up that value, you typically lose that value or lose the sale.[/QUOTE]

This is very very important.

Also consider your timeline. If it’s something you want to put up for sale within 5 years, but don’t mind hanging on to it for a year or two after that, then you might have time to wait for the Billies who love your setup and are willing to pay for it. But that’s a little like searching for a needle in a haystack. If, in 5 years, you want to move ASAP, you have to settle for what the general public is looking for.