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Houses That Work Seminar Review – ROI on Remodeling

Hello, this is Eric Rauser from Risinger Homes filling in for Matt today.

I recently attended a seminar hosted by the Energy & Environmental Building Association, one of a series titled “Houses That Work“. These are great lectures and really set the bar for building science education. The session I attended was focused on remodeling and had some great information. Some it served as a good review for the practices that we are already employing at Risinger Homes, but there were some new ideas as well as new ways of looking at how we approach energy efficiency upgrades in existing houses.
One thing I found interesting was the way we think about return-on-investment (ROI). Often, when we think of ROI on remodels it goes like this: If I spend $10,000 on upgrades that will save me $1000 per year on energy use costs, it will take ten years to pay off that amount, and who knows if I’ll stay in this house that long. The other way of looking at that same scenario is that I’ll be getting a 10% rate of return for as long as I own the house, and that I will likely get that capital back if I decide to sell. When that is compared to other ways of investing, it’s hard to beat. It’s difficult to imagine reliably getting that return on an investment in the stock market!
This mode of thinking can also be employed in new construction when considering how much to spend on insulation, mechanical systems, or anything that would have an impact on your monthly bills.
So, if you are thinking about upgrading your home or weighing your options on a new house, let this help you make your decisions.