Home Upgrades With Low ROI
You probably know that home owning is not just about building wealth; it’s also about living well and enjoying life with your family and friends. So if I can’t change your mind about these six home upgrades with low ROI, I won’t judge, just go for it and enjoy! But go in with your eyes wide open to avoid buyers remorse. Some reasons why:
These six home upgrades with low ROI may not increase the value of your home.
1. Outdoor Kitchen
The fantasy: You’re BBQ king –baby back ribs, grilled steaks, blending margaritas, and washing highball glasses without ever leaving your pimped-out patio kitchen.
The reality: For what it costs — on average $12,000-$15,000 — are you really gonna use it? Despite our penchant for eating BBQ outside, families spend most leisure time in front of some screen and very little leisure time outdoors, no matter how much they spend on amenities, according to UCLA’s Life At Home study. And the National Association of Home Builders’ 2013 What Home Buyers Really Want report says 35% of mid-range buyers don’t want an outdoor kitchen.
The bottom-line: Instead, buy a tricked out gas grill, which will do just fine when you need to char something. If you’re dying for an outdoor upgrade, install exterior lighting. About 1% of buyers don’t want that.
2. In-Ground Swimming Pool
The fantasy: Floating aimlessly on your back with the occasional back stroke, sipping umbrella drinks, staying cool in the hot days of summer.
The reality: Pools are money pits that you’ll spend $17,000-$45,000-plus to install (concrete), and thousands more to secure and maintain. And, you won’t use them as much as you think, and when you’re ready to sell, some buyers will call your pool a maintenance pain.
The bottom-line: If your idea of making it includes a backyard swimming pool, go for it. But, get real about:
- How many days per year you’ll actually swim.
- How much your energy bills will climb to heat the water ($760-$1,845 depending on location and temperature).
- What you’ll pay to clean and chemically treat the pool ($20-$100/month in-season if you do it yourself; $75-$165/month for a pool service).
- The fact that you’ll likely need to invest in a pool fence. In fact, some insurance carriers require it.
A less expensive option: an above-ground pool, or natural pools with lower maintenance. If you still insist on a pool, you’ll save money if you install a solar heater.
3. In-Ground Spa
The fantasy: Soothing aching muscles and sipping chardonnay with friends while being surrounded by warm water and bubbles.
The reality: In-ground spas are nearly as expensive ($15,000-$20,000) as pools and cost about $1 a day for electricity and chemicals. You’ll have to buy a cover ($50-$400) to keep children, pets, and leaves out. And, like in-ground pools, in-ground spas’ ROI depends solely on how much the next homeowner wants one.
The bottom-line: Unless you have a chronic condition that requires hydrotherapy, you probably won’t use your spa as much as you imagine. A portable hot tub will give you the same benefits for as little as $1,000-$2,500, and you can take it with you when you move.
Your fantasy: No more climbing stairs for you or for your parents when they move in.
The reality: Elevators top the list of features buyers don’t want in the National Association of Home Builders “What Buyers Really Want” report. They cost upwards of $25,000 to install, which requires sawing through floors, laying concrete, and crafting high-precision framing. And, at sales time, elevators can turn off some families, especially those with little kids who love to push buttons.
The bottom-line: If you truly need help climbing stairs, you can install a chair lift on a rail system ($1,000-$5,000). It can be easily removed when you move.
5. Backup Power Generator
Your fantasy: The power in your area goes kaput, but not for you. You were smart enough to install a backup power generator. While the neighbors eat cold hot dogs by a flashlight beam, you’re poaching salmon in your oven and pumping out Red Hot Chili Peppers tunes.
The reality: Power outages may seem to go on forever, but they don’t. Fifty dollars worth of batteries can power portable lights, radios, and TVs; a car adapter will charge your cell phones and iPod’s; and some dry ice will keep freezer food cold for at least a couple of days.
The bottom-line: If you live in areas where power shortages are the rule, not the exception, spend the money for reliable backup power: Your still-frozen steaks, home office printer, and refrigerated medicine will thank you. But if the power goes out rarely, installing a standby generator is overkill.
Nationwide, homeowners recouped 67.5% on their average $11,742 investment in a backup generator — one of the lowest ROI on the annual Cost vs. Value Report.
6. New Windows
The fantasy: Brand new windows that don’t stick, and slash energy bills.
The reality: A $10,000 vinyl window replacement project will recoup about 70% of your investment at resale, and if they’re Energy Star-qualified, they can save you around $300 in energy bills per year.
The bottom-line: I get it — new windows are energy savers. And most windows can be repaired for a fraction of replacement costs. And if you spend about $1,000 to update insulation, caulking, and weather-stripping, you’ll save 10%-20% on your energy bill.
No judgments! What’s your home upgrade indulgence?
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