Appraising a Hobbit Hole: The Property Value of Bag End

Have you ever wondered what it might be like to live in a Hobbit hole like Bag End? Or how much it would appraise for?

We have.

Our National Appraisal Expert took an adventure — there and back again — to uncover her opinion...and she revealed many precious treasures along the way.

Property Description – The Charm of Bag End (& Other Hobbit Holes)

“In a hole in the ground there lived a Hobbit. Not a nasty, dirty, wet hole, filled with the ends of worms and an oozy smell, nor yet a dry, bare, sandy hole with nothing in it to sit down on or to eat: it was a Hobbit-hole, and that means comfort.” ― J.R.R. Tolkien, The Hobbit

Property Layout & Floorplan of Bag End

For The Lord of the Rings fans, Hobbit holes represent the most idyllic form of comfort. Bag End is the most famous of all, with its iconic round door peeking out from under the grassy hillside of Hobbiton, in a quiet corner of Middle Earth. It's hard to imagine a cozier abode to return to after a reckless adventure through war-torn, orc-infested, and dragon-threatened lands.

The typical layout of a Hobbit hole starts at that round doorway, leading to long hallways, large rooms, and shelves upon shelves of books, ales, snacks, and all other comforts of home — all at garden level and below.

Here is an example of the floor plan of Bag End, drawn by Underhill & Wanks of Weta New Zealand, the official prop company for The Lord of the Rings franchise.

Lastly, being underground, we can’t calculate a gross living area (GLA) for Bag End. The area is considered to be below grade per American National Standards Institute (ANSI) 2765-2021, however, the ceiling height requirement is 7 feet. The property does not meet ceiling heights therefore it is classified as “other” (depending on the scope of work, of course.)

Architecture of a Hobbit Hole

The iconic Bag End Hobbit hole, owned most famously by Bilbo Baggins, features rounded doorways, low ceilings (and pesky chandeliers), winding hallways that twist into many rooms stacked with books, littered with papers and snacks, and warmed by hearth fire.

As Tolkien described it, “The best rooms were those on the left side of the passage for they had deep-set round windows with a view of the garden and meadows beyond down to The Water” (J.R.R. Tolkien, The Hobbit, "An Unexpected Party").

Middle Earth scholar Johanna Brooke wrote in the Journal of Tolkien Research that Bag End seems to utilize an Arts and Crafts architectural style and aesthetic, which was popular between 1880 and 1920 in the British Isles. This style stood for traditional craftsmanship, which commonly featured medieval, romantic, or folk styles of decoration.

Bag End’s Location in the Shire

Location: Bag End rests in Hobbiton Hill, a favorable location on the north side of the town of Hobbiton, in the Shire's Westfarthing.

Proximity to key amenities: Bag End is located near a popular Hobbiton bar, the Green Dragon Inn, and several expansive fields used both for farming and for parties.

Features & Amenities of Bag End

A Hobbit hole would not be complete without the following features and amenities, with which Bag End is full to the brim:

• Fireplaces

• A few round, garden-level windows

• Several pantries

• Large kitchen

• Guest rooms

• Designated smoking lounge

• Wine cellar

• Cold cellar

• Parlor

• Study

• Extensive storage spaces

• Large dining room

• Lush gardens

• Entrances through the front and back

Note: Interestingly, the most commonly used floorplans of Bag End all lack washroom facilities, which is an odd omission considering Hobbits’ shared love for baths, and Bilbo’s complaint of some dwarves who have “destroyed the plumbing” in his bathroom. In this case, due to the omission, we could make one of two assumptions:

• There is a restroom in Bag End that is not featured in the floorplan (or mislabeled as a guest room)

• There is no restroom in Bag End, but instead, an outhouse on the property

This is why the scope of work is important, and must be determined between the client and the appraiser. The fact there is an unknown factor of the type of bathroom room or the septic that is present means:

1. The appraiser needs to adjust the original scope of work with the client's acceptance; and

2. The appraiser should request a personal inspection to be completed to create a credible opinion of value.

If neither are possible, then one of the two assumptions needs to be determined.

Unique Environmental Features of Hobbit Holes

Being situated underground, Bag End probably regulates temperatures more easily than above-ground structures, making it an energy-efficient option — a favorable quality in today’s market (and an excellent subject to study for appraisers). The rooftop gardens contribute to this eco-friendly construction, with their unique ability to lower temperatures in the surrounding area. And being built in hilly or mountainous regions would drastically reduce the risk of flash flooding.

The Appraisal Process: Valuing a Hobbit Hole Like Bag End

The valuation process of Bag End takes some extraordinary assumptions, if we are to appraise the home as a residential property. Thankfully, due to its cozy structure and dreamy surroundings, many copycat homes have been built around the world for our comparison purposes.

Comparable Properties to Bag End

Bag End has left a tangible mark on the world by inspiring new styles of architecture in its wake. The Hobbit hole style has been imitated in many ways, from berm homes and tiny home constructions to life-size renditions from the films.

However, not all Hobbit holes are built alike. A great many of them are not holes at all, instead taking the name, “Hobbit home.” And, of course, not only Hobbits live in Hobbit homes! Where the original homes were built to fit roughly 3-foot-tall Hobbits with large, hairy feet and even larger appetites, modern human homes have been (rightfully) up-sized.

There are hundreds — possibly thousands — of unique Hobbit home structures in the world, so we chose just a few unique examples:

• A mushroom cabin styled after Bag End

• A green-roofed eco-habitat model

• One of the oldest Hobbit-style homes, built in Michigan

• Quebec’s electricity-free Hobbit homes

• The Hobbit House Earthship of Taos, New Mexico

Cost Approach

Since these structures are all so unique, it could be useful to consider the cost approach. There are two handy methods to consider in using this approach:

• Reproduction Method: This version considers what a complete replica of the property would cost to build.

Using the sets from the films as perfect replicas, the Hobbiton tourist destination in New Zealand could be a good way to determine this estimate.

• Replacement Method: This method assumes that a property would be built with the same function as the original, but uses modern construction materials to build it.

While Bag End was built in S.R. 1280 in Shire time, this doesn’t mean much to an appraiser (unless you’ve read The Silmarillion). So, we can imagine that the construction of Bag End might mirror that of the 1880s in Great Britain (aligning with the Arts and Crafts architecture style). Bag End was constructed with bricks lining the ceilings and stone for the walkways and fireplaces, a common feature of masonry construction. This style of building is no longer affordable, or easy to accomplish. Nowadays, it would be more affordable and more practical to use something like concrete or clay.

Income Capitalization Approach

Many Hobbit-style dwellings built around the world are used as short-term rental properties, making them special (and very popular) tourist destinations. With this in mind, we must also use the income approach to determine an estimated opinion of value based on the subject’s potential income.

The highest and best-use analysis must first be completed to determine if short-term rental or even long-term rental is permitted in the Town of Hobbiton. Short-term renal analysis has been a hot topic among appraisers and what type of licensing/certification is required to complete this type of appraisal assignment. The argument is that an investor that is involved with a short-term rental is a commercial property.

Market Conditions in Middle Earth

Now, if an agent is out there selling a Hobbit hole to a needy Sackville-Baggins, in theory, our appraiser would need to evaluate the market conditions in Middle Earth, and more specifically, in the Shire.

The War of the Ring brought near-apocalyptic times to the Shire, with many Hobbits captured by Saruman’s evil allies, and forced industrialization threatening the Hobbit way of life. Post-war, however, saw a miraculous comeback, ushering in one of the most prosperous times in Hobbit history. It’s likely that a market in this condition would be highly favorable for Hobbit holes like Bag End.

The Final Opinion of Value: A Priceless (and Precious) Treasure?

Bag End’s value is, admittedly, precious — er, we mean priceless. With the incredible mark that Bag End, and the Hobbit lifestyle, has made in both Middle Earth and in our world, it’s difficult to put a number on exactly how much this property could be worth.

Still, reconciling all three approaches the Sales comparison approach with extraordinary assumptions, Cost and Income Approaches, our National Appraisal Expert’s opinion is that Bag End could be estimated to be valued between $750,000 and $1,000,000.

Even the Smallest Leap Into Appraisal Can Change the Course of Your Future

There are more and more homes being built today that function like Hobbit homes, complete with eco-friendly features, unique architecture styles, and beyond. Learning about properties like these is part of what makes property appraisal such an endlessly fascinating career! To learn more about famous home appraisals like Hogwarts and Buckingham Palace, check out our blog. And remember, dear reader: not all those who wander are lost.

Wander through our CE catalog for the skills you need to uncover the many adventures that await you in your career.