I am constantly showing Kona-Kohala Coast homes to visitors who hope to move to Hawaii.
I can pretty much predict what is on Hawaii buyers’ wish list (besides an ocean view for less than $500,000). Writer Lisa Kaplan does a good job of discussing a wish list (below). I think her “low return” article has a lot of good points and is worth reading, though some Hawaiian-style qualifications are needed. I put my opinions in blue where appropriate.
Home Upgrades with the Lowest ROI
By: Lisa Kaplan Gordon
Life is a balancing act, and upgrading your home is no different. Some upgrades, like a kitchen remodel or an additional bathroom, typically add value to your home. Others, like putting in a pool, provide little dollar return on your investment.
Of course, homeowning isn’t just about building wealth; it’s also about living well and making memories — even if that means outclassing your neighborhood or turning off future buyers. So if any of these six upgrades is something you can’t be dissuaded from, enjoy! We won’t judge. But go in with your eyes wide open. Here’s why:
The fantasy: You’re the man — grilling 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 to $15,000 — are you really gonna use it? Despite our penchant for eating alfresco, families spend most leisure time in front of some screen and almost no 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 — only 1% of buyers don’t want that.
Outdoor kitchens are important to Hawaii buyers. Because we live outside so much, some homes don’t have a dining table inside! But they have some pretty nice outdoor furniture. A large covered lanai with a functional outdoor kitchen will be well used and should be in the budget. If you buy a home without this feature, plan to install one (including a wind break as necessary). Lisa is correct to say a luxury outdoor kitchen is not required. At minimum I recommend a broad covered lanai, lighting, a few extra electric outlets, a quality outdoor grill, counter space, small fridge, tables, chairs, and roll down sunshades. I firmly disagree with her “low return” prediction. In Hawaii buyers love outdoor living!
In-Ground Swimming Pool
The fantasy: Floating aimlessly, sipping umbrella drinks, staying cool in the dog days of summer.
The reality: Pools are money pits that you’ll spend $17,000 to $45,000+ to install (concrete), and thousands more to insure, secure, and maintain. Plus, you won’t use them as much as you think, and when you’re ready to sell, 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 to $1,845 depending on location and temperature).
- What you’ll pay to clean and chemically treat the pool ($20 to $100 per month in-season if you do it yourself; $75 to $165 per 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.
Lisa’s right. Unless you are a dedicated lap swimmer, hit the beach. They are lovely all year ’round! Many Hawaii buyers are worried about pools and their grandchildren, so that could be a problem when it’s your turn to sell. It’s amazing how many kids don’t know how to swim.
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 to $20,000) as pools and cost about $1 a day for electricity and chemicals. You’ll have to buy a cover ($50 to $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 to $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 NAHB “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 to $5,000). Best feature: It can be removed.
If you are buying a condo, the Kohala Coast condo neighborhoods (projects) with elevators generally cost no more than those without. If you cannot decide between two units, one with and the other without an elevator, choose the former. Hawaii buyers love elevators.
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 adaptor will charge your cell phones and iPods; 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 fax, and refrigerated medicine will thank you. But if the power goes out rarely, then installing a standby generator is overkill.
Nationwide, homeowners recouped 59.9% on their average $12,135 investment in a backup generator — one of the lowest ROIs in the annual “Cost vs. Value Report.” If you need occasional emergency power, a gasoline-powered portable generator ($200 to $650) probably will suffice.
Photovoltaic (PV) solar system prices have really fallen. Because the cost of electricity is so very high in Hawaii, get an estimate, especially if you live at low elevation and must use air conditioning. Leased PV system contracts can be written so a future buyer will take over the lease. Hawaii buyers love solar systems.
The fantasy: Brand new windows that don’t stick, and slash energy bills.
The reality: An $11,000 vinyl window replacement project will recoup about 73% of your investment at resale, and if they’re Energy Star-qualified, they can save you around $300 in energy bills per year. So, plan to live in your house about another 10 years to recoup the cost of new windows.
The bottom-line: We get it — new windows are sturdy, pretty energy savers. But unless old window frames are thoroughly rotten, 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% to 20% on your energy bill.
All true, unless a window is leaking water into the home. Upcountry homes in Hawaii can see plenty of rain. Leaking windows in old homes must be professionally replaced.