If you're interested in making your house more functional, more beautiful, and more valuable at the same time, you might consider investing in smart home technology. Much of this tech is inherently valuable, for one reason or another, and it can simultaneously make your house more valuable from an objective standpoint.
But are technology upgrades the best way to boost the value of your home?
Increasing the Value of Your Home
When it comes to increasing the value of your home, there are two main avenues of development. First, you can try to actively increase the value of your home by modifying it or upgrading it in some way. Second, you can passively increase the value of your home by keeping it in good condition and supporting the local market however you can.
Because the second method is largely out of your control, we'll focus on the first. Within this category, you can increase your home in both objective and subjective ways, and we'll consider both in our analysis.
What Makes a Home Upgrade Worth It?
What exactly makes a home upgrade worth it? Since there are so many variables, it's hard to reduce the scope of the question to something universally answerable. However, you can determine the return on investment (ROI) of an upgrade by considering all of its costs and benefits.
For example, if you install a modular outdoor kitchen, you'll likely pay for both materials and installation. Once the kitchen is installed, it will increase the value of your property directly. However, it also increases the value of your property for your own purposes; it can beautify your backyard and give you extra kitchen space.
When analyzing an upgrade, we need to consider:
- Total cost of installation/renovation. First, there's the total cost of installation and renovation. If an upgrade is too expensive, the costs will almost certainly outweigh the benefits.
- Home price increases. Second, we need to consider how much the price of your home will increase as a result of the upgrade. Some upgrades are more valuable than others because they're more desirable in the market.
- Cost savings. Third, we need to consider any secondary forms of objective value that your upgrades can offer. For example, replacement windows could dramatically decrease your utility bills by providing greater insulation and reducing your need for heating and cooling.
- Subjective value. Finally, we need to consider subjective value. How much will this increase your quality of life? How much will you personally enjoy this while you continue living in this home?
Benefits and Drawbacks of Smart Home Tech
These are some of the most important benefits and drawbacks associated with smart home technology as a home upgrade.
- Versatility. There are many different types of smart home technology and each of them serves a different purpose. Smart thermostats, smart TV's, smart refrigerators, and smart home security systems can make your life better in a variety of different ways.
- Modularity. Even better, smart home tech is generally modular. You can choose to only install the technologies you want and avoid the ones that don't seem worth it. You're in total control of your technology environment.
- Multiple forms of value. Some types of smart home technology can increase the value of your home, reduce your bills, and simultaneously improve your quality of life. In fact, most upgrades in this category offer multiple forms of value.
- Easy, inexpensive installation. Smart home tech is generally inexpensive, especially when compared to more expensive upgrades like bathroom renovations. You may even be able to install it yourself.
However, there are some drawbacks to consider.
- Lack of universal appeal. Not everyone is interested in smart home technology. If your home is too technologically advanced, it could actually turn some buyers off.
- Potential for obsolescence. Technology advances rapidly. The gadgets that are state-of-the-art today may be practically irrelevant in a decade. This is a very important consideration if you plan on staying in your house for years to come.
- Comparative value. Compared to certain other upgrades, smart home technology offers less overall ROI.
Is Upgrading to a Smart Home the Best Way to Build Value?
So is upgrading to smart home technology the best way to build value in your home? With so many upgrades and renovations to consider, the answer is probably not. Smart home technology comes in many different forms and is both objectively and subjectively valuable. It also offers a very reasonable ROI that's well worth considering, especially if you personally prefer this type of technology. However, if your only interest is increasing the value of your home for the least total expenses, smart home tech may not be the best fit.
