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They're much more than sheds. Think of these structures as detached cottages that can stretch your living space.

Nothing stresses your budget and your nerves like building a home addition. But if you need more space for your hobby or a home business, there's an option besides knocking down walls: backyard rooms. We don't mean bland boxes that could double as lawn-mower garages. These upscale sheds offer well-sealed walls, double-pane windows and interiors that can look like your living room. (See our slide show of ten incredible backyard sheds.)


SLIDE SHOW: 10 Incredible Backyard Sheds

Upscale-Shed Sourcebook

Fabulous Prefabs

When shopping for one of these, you'll find the terms shed, cabana and garden room used interchangeably. Prices range widely, from a simple plywood structure that's built from a kit and costs less than $2,000 to an elaborate fir-and-cedar Michael Graves Pavilion built by Lindal Cedar Homes for about $30,000 (including $8,000 for delivery and assembly). These upscale backyard structures typically cost 40% to 50% less per square foot than similar-size home additions.

As the backyard-room market grows, so does the quality of the products. At the cutting edge are brothers-in-law Nick Damner and Casper Mork-Ulnes of San Francisco. The two recently started Modern Cabana, which made the 10-by-12-foot shed that Marie Delahaye and Carmelo Salgado of Walnut Creek, Cal., bought. The shed's look -- with cedar siding and a modernist roof -- doesn't clash with the aesthetic of the couple's wood-paneled ranch-style home. Marie is especially delighted to have a room in which to unwind. "There's something about stepping into another structure," says Marie. "It feels as if you're really getting away."

Marie and Carmelo chose a model with a base cost of $15,000, and they spent $5,000 more for taxes, shipping and assembly. After adding a French door, large, operable windows and other extras, the room cost was about $27,000. In addition, they paid $3,000 for electrical work (which included an upgrade to their home's electrical system) and $3,000 for landscaping. The project's total tab of $33,000 compares favorably with the $50,000 tab to add a room of comparable size and style to their house, says Marie.


Skittish about local building regulations? Don't be. These sheds can usually be built without zoning approval if they're 120 square feet or less. Ask your local building authority and your homeowners association for particulars. Also ask how you may use your structure. In Seattle, for example, most residents aren't permitted to use such buildings as home offices.

You have two main options: Buy a kit with dozens of pieces (referred to as pre-cut kits), or buy a kit that comes in panelized sections. In either case, a few makers insist that their workers install sheds on site. With most, however, you may either hire your own contractor or build it yourself. Some manufacturers offer free installation; others charge up to $2,700. Below are the pros and cons of pre-cut and panelized sheds, plus questions buyers should ask.

If Ikea built sheds

Kits of pre-cut wood pieces are the most affordable options, and they feature all the necessities -- plus a few of the niceties -- of the best upscale sheds.

A good rule of thumb is to add about 30% to the price of the basic kit to arrive at the bottom line. For example, you may start with a basic shed that costs from $2,000 to $5,000 and then pay extra for factory options such as window boxes, upgraded windows and doors, and insulation. Delivery can add between $300 and $1,300 -- although some manufacturers will deliver free and others may add up to $2,400. Hiring two handymen to assemble your shed may cost a few hundred dollars.


In 2004, Leaman and Cheryl Houston of Sacramento, Cal., bought an 8-by-12-foot shed kit from the Shed Shop for $3,000, which included delivery and assembly. (The Shed Shop is one of the few manufacturers that includes installation in the price of its pre-cut shed kits. Get a list of manufacturers plus pricing info in our Upscale-Shed Sourcebook.) The Houstons laid the vinyl flooring, painted the walls and added an air conditioner and two windows themselves. The shed went up in one weekend, and the project totaled about $4,000, says Cheryl. "That's a far better deal than the $10,000 it would have cost to add a room to our house."

The shed sits in the far end of their backyard by a rose arbor. Leaman, a housing contractor, uses it as an office, and Cheryl uses it as a studio for creating photo albums on a computer and as an office for a budding home business. The room frees up a bedroom in their two-bedroom house for visits from their children and grandchildren.

Panelized sheds are trucked to your lot in sections. Contractors hired by you (or, less commonly, by the shed manufacturer) lift and join the heavy pieces. Panelized sheds tend to cost more than pre-cut kits, with prices running from a few thousand dollars to about $22,000. Experts advise you to double the price of an upscale shed kit to arrive at the bottom line. One expense is site development, which includes leveling the ground and laying the foundation. Many manufacturers include the cost of installation in the price of their panelized sheds. But some don't: Modern Cabana charged Marie and Carmelo $2,700 to assemble their shed.

Neil and Patty Benson bought an 8-by-12-foot panelized shed for about $2,100, plus $300 for two handymen to install it on their property in Carmel Valley, Cal. The Cedarshed-brand room serves as a playhouse for the couple's three young children, Nick, Katie and Erik. The Bensons saved by using an existing deck supported by concrete piers. After adding small touches, such as screen windows, the total cost was $4,500. "When the kids move out someday, I'm going to hang a hammock in it and use it as a grown-up retreat," says Neil, who likes the shed's location, nestled among oak trees on a slope overlooking a valley.


Cash up front

You'll probably have to pay the entire cost of your shed up front. If the structure were legally considered a remodeling project, you could withhold some of the payment until you were satisfied the job was done properly. Modern Cabana lets customers space out payments until a project is complete, but that's not the norm. Also, no upscale shed maker currently offers financing.

A few other things to keep in mind: The shed manufacturer should provide a warranty that guarantees all parts will arrive intact or replacements will be sent immediately. Be sure you like the design before it's assembled on your property: Sheds can't be returned after that point. Perfect placement is key. The structures, such as GDM/MetroShed's 1,800-pound upscale sheds, are usually too heavy to move easily. And if you live in an area prone to extreme winds, snow or other nasty weather, ask the company how its sheds hold up to stress. You may be surprised at how sturdy they can be. GDM/MetroShed, for instance, says that its sheds have withstood hurricanes.

Shed makers leave it up to you to hire an electrician to wire your structure. If your power needs are minimal -- because, say, you only need enough juice for a lamp and a stereo -- you can probably just connect a new circuit to your home's circuit-breaker box, run a wire to the shed and add some wall outlets. Cost: up to about $300, says building-inspection expert Mike Kuhn. But if you require more power, you may need a new panel box or even an upgrade to your home's electrical system, which will run a few thousand dollars.

If your shed sits far from your house, your electrician may need to run a wire underground. High-end sheds, such as those by Modern Cabana, offer a heating-and-cooling system for $2,000. Or buy a space heater and an air conditioner for about $1,500 less.

Next: See our slide show of ten incredible backyard sheds