What Makes an Upgrade Worth the Investment?

Many builders tell me that SIPs are too expensive. But these same builders tell their clients that “upgrading” to hardwood floors, cherry cabinets, and granite are all worth it. They say that chair-rail and crown-molding upgrades are worth it. Really?? I challenge anyone to show me the economic equation that proves the payoff. Financing any of these non-functional upgrades at 4% over 30 years pretty much eliminates any possibility of a return when you sell your house. The reality remains that most “upgrades” are a financial pit with little or no chance to recoup your investment.

Ahh, but there are exceptions. A few products actually return more than you spend, and most have to do with the climate of your house. Heating, cooling, and insulating systems influence your monthly expenses more than any other products in your home, so new alternatives can quickly produce positive cash flows when compared to standard building options. No surprise, the one with the highest return is structural insulated panels–a one-time, no-maintenance investment. You’ll also save money with smart HVAC and water heating choices.

Before you build, investigate the costs and rewards of potential upgrades. When you talk with your builder, start with the options that carry the best investment value; they’ll make all the other “non-investment” ideas that much easier to swallow.