Very often, it’s the things that cost us the least that give us the most enjoyment. The same is true in a home. Over the years, I’ve seen some clients make interesting financial decisions about how they allocate their spending in their homes.
There’s a straightforward (and silly) way to quantify the utility value of the square feet of your home. If your home costs you $1M and you spend 30% of your time in the bedroom, then your bedroom is worth $300k. Based on this formula, if you spend 10 minutes a day in the powder room, which equates to 0.694% of your day, then your powder room cost allocation based on your $1M purchase price is only $6,940.00. This is why the formula is silly: Anyone who lives in a townhouse will tell you that not having to run up a flight of stairs to pee in the middle of the day is priceless!
It’s smarter to quantify the value of a home based on the enjoyment we derive from the space. I had a client once who installed a $500,000 stainless steel slide from his upstairs bedroom to his downstairs living room. It was worth every penny to him because he loved that thing and still talks about it. But when it came time to sell the home, the new buyers had to pay to remove it. The slide was not a significant financial investment, but it was something he loved - like a swimming pool. Only install one if you want to use it to enjoy, not because it’s going to increase the overall value of your home, because it won’t.
I recently had a client who bought a $40M property. His most crucial custom upgrade was a recovery room that housed a $50,000 infrared recovery bed, where he spent his favorite hour of each day.
This winter, I added a sauna to my home, costing me around $10,000. The relative cost value as a proportion of my house is less than 0.2%. I spend 30 minutes a day there, and the utility value to me is priceless. The sauna was a no brainer when I averaged the cost per minute and divided it by the time spent in the sauna.
My only regret is that I waited so long to get one while I performed mental gymnastics trying to justify spending so much on a wooden barrel. Yeah, I sometimes focus on the wrong things. But my advice is to spend the money on the things that bring you happiness (and that you can afford, of course). And for me, my sauna = happiness. Even on a sweltering August day.
Life is too short, my friends!
Let’s do this.
Shaun