I’m 63 and spending $95,000 on a roof deck for my $500,000 home. Is that a good investment?
“I have a net worth of $2.3 million and my only debt is a 15-year mortgage.”
The homeowner in question is considering a significant investment in a roof deck for their $500,000 home, with a price tag of $95,000. To put this into perspective, the homeowner has a substantial net worth of $2.3 million and a relatively modest mortgage. This suggests that they have the financial means to absorb the cost of the renovation.
From a financial perspective, the question is whether this investment will yield a commensurate return. In general, home renovations can recoup a significant portion of their cost at resale, but the return on investment varies widely depending on factors such as the quality of the renovation, the local real estate market, and the tastes of potential buyers. In this case, a roof deck may be seen as a luxury amenity that could appeal to certain buyers, but it's unlikely to generate a dollar-for-dollar return.
Looking ahead, investors and homeowners alike will want to watch how this renovation impacts the home's resale value, if it were to be sold in the future. Additionally, it's worth considering whether there are other, more cost-effective ways to enhance the home's livability and value. As the homeowner moves forward with this project, it will be interesting to see how they balance their desire for a luxurious amenity with the practical considerations of return on investment.
Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.