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ROI on a Dedicated Home Theater - 2012-2013 Edition

Poll Results: Do you think a dedicated home theater adds value to your home?

 
  • 45% (19)
    Yes, it adds value
  • 54% (23)
    Doesn't make a darn bit of value difference
  • 0% (0)
    No, it detracts value
42 Total Votes  
post #1 of 29
12/12/12 at 9:42am
Thread Starter 


Unless I missed a thread, the last discussion of Home Theater ROI was seven years ago.

2005! I mean... that was like... back before cars parked themselves, yaknow? Paris Hilton was still basking in the glow of her first sex tape and the Mars Rover of the day didn't have iTunes tagging on the dashboard. If you talked about reading something off a tablet, people would assume you were talking about the Ten Commandments.


So... Technological eons have passed. A 60 inch plasma is half the cost. If you buy your kid a flat panel smaller than 42 inches, the Department of Family Services will investigate you. There are entire shows dedicated to Man Caves on the home improvement channels.

Let's crack this nut and fuel up the old flame wars with Jet-A!

1. What is the X% Return on Investment of a dedicated home theater today?

2. Are potential buyers more accepting of a square footage dedicated to home theater than they were in 2005?

3. Real stories from real people who have sold (or not sold) houses with a dedicated home theater area, please.

4. Does a dedicated home theater help you or hurt you when it's time to sell a home?
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post #2 of 29
12/13/12 at 11:32am
My wife's cousin is a real estate appraiser. He said that in the current market, home theaters aren't helping home values because the trend is more and more for people to just get a big LCD and put it in the family room. He wouldn't come out and say it detracts value, but he might have been trying to not hurt my feelings. At the end of the day, to him it's just another room when taking things into account.

Of course, beauty is in the eye of the beholder, you could find someone who "must have" your home because it has a theater in it.
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post #3 of 29
12/13/12 at 12:09pm
Thread Starter 
That's almost word-for-word what my Real Estate agent buddy said.
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post #4 of 29
12/13/12 at 12:18pm
I'd be in the "doesn't add or detract value" column, with the caveat, it may help SELL the home. All other things being equal, a home with a theater may have an appeal that others don't. That being said, it all depends on who's looking to buy.

I made my theater "removable." False frame screen wall and floating riser. A screwdriver and a sawsall would take my HT back to a regular living space.
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post #5 of 29
12/13/12 at 12:44pm
Thread Starter 
Thought about it. I definitely future-proofed it so that if the next owners have a big LED/Plasma instead of a projections screen there's power and HDMI conduit waiting for it.

Given the dusty spider factory that the corner of the basement was before the theater was built, I can't believe I did any harm to my home value.
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post #6 of 29
12/13/12 at 1:23pm
I have 2 home theaters in my basement (LOL). I completely expect that it's going to detract value now because I've taken up most of the basement room.
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post #7 of 29
12/13/12 at 1:43pm
This is very situational. If you, like me finished your basement adding a room as a theater then you win. Adding that same room without the theater will appeal to more potential buyers however.
If you take a living room and repurpose it as a theater than you have gained nothing. Some buyers might like the change while others will be put off from it. The more you add personal features to any home the less of a customer base you end up with who appreciates those things.

Pools are the same thing. Not a draw even though you may have spent a fortune having one installed.
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post #8 of 29
12/13/12 at 2:32pm
Quote:
Originally Posted by scipper77 View Post

This is very situational. If you, like me finished your basement adding a room as a theater then you win. Adding that same room without the theater will appeal to more potential buyers however.
If you take a living room and repurpose it as a theater than you have gained nothing. Some buyers might like the change while others will be put off from it. The more you add personal features to any home the less of a customer base you end up with who appreciates those things.
Pools are the same thing. Not a draw even though you may have spent a fortune having one installed.

I have a one room basement that I finished to a theater. Shortly after I finished, the ubiquitous, realtor neighbor, told me the theater would not necassarily add value to my home compared to average, finished, square footage. But, since my theater square footage did not replace other basic rooms, it might make the house more appealing to a "higher level of client". So, no, it does not add any value. tongue.gif
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post #9 of 29
12/13/12 at 2:48pm
I'm not doing a dedicated HT for ROI on my house, but because it's something I want to do. Given the rather small overall investment I will have into it and knowing I will want to move in about three years I can take it with me or leave it.

In my situation I have a full basement that is split into three rooms. One room is being converted into the dedicated HT. The largest room is a utility room and my plan is to split it in half and have all the "utility" items contained in one room (furnace, water heater, washer, dryer, etc). The newly created room will then be fully finished and made into a nice sized bonus room with the possibility of a full bathroom as well. Those two items will add more ROI for a future buyer than the theater.

I would venture to guess the main reason most of us here do a dedicated HT is because of the fun and enjoyment we will get out it. That's the ROI you should expect.
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post #10 of 29
12/13/12 at 2:49pm
I figure it this way, i could have spent my money on:

1. A new car
2. Hookers and Blow
3. Home Theater

Of the three options I'm betting #3 will lose me the least money in the long run.
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post #11 of 29
12/13/12 at 2:52pm
Your value add comes from finished space vs unfinished space. However, a home theater vs a plain room won't have the return since the cost to finish is more than an average room.

Additionally, people tend to value things by what they'd pay for it. They are mentally comparing it to their 60" walmart LCD and HTIB combo they got on black friday and wondering why you wasted a whole room on the mess.

And lastly there is taste. Guess what, that vintage HT somebody is building that I read about today...the first legit buyer you get is going to be a modern lover and hate your fab room. It is the equivalent of wallpaper vs paint....watch HGTV sometime to see how wallpaper goes over with home buyers.

If I sell I plan to pull my "good" components prior to listing and replace with a cheap AVR, speakers, projector and list it as "theater stays with house" for a sweetener. A novice can't tell a difference and an HT geek would see the value of the room itself. I saw a neighbor do this and they sold in 3 days in a slow market compared to other highend houses.
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post #12 of 29
12/13/12 at 2:54pm
Thread Starter 
I fully accept the "adds nothing" screed.

Fully.

I just flash back to 10 years ago. We looked at two houses on the same block, absolutely identical in floorplan and layout. Potatoes-po-tah-toes updates in both of them that we liked or didn't like. Within $300 asking price for both houses.

And the house we bought, we bought entirely because it had a "home gym" in the basement. We were excited about the "home gym."

The "home gym" turned out to be a craptastic universal machine, bolted to the wall in an unfinished basement. The first time I tried to use the "home gym" it was so rickety and decrepit that I realized it was unsafe. It was a Sears and Roebuck relic of the Pleistocene Era. Total white elephant. Getting it cut off the wall and hauled upstairs and away was an ordeal. Facepalm city.

I know that if we ever leave the house so a potential buyer can walk through, I'm setting "The Dark Knight Returns" to play on a loop in the theater. Maybe it will impress, or maybe the kids will sit on the tiered seating and veg out in the dark while their parents chew it over with their Realtor upstairs. I can see a potential buyer shrugging and saying "Ehn." I can't see anybody saying "Ew! We'd never use this!"

I also flash to all the guest families we've cycled through our theater, and the number of parents who said to their kids, "Can you imagine having something like this in our house?"

But the world is telling me, "Shawn. It's an 'Ehn.' It's a 'Meh.' Deal with it." Okay. I accept 'Ehn.' I accept 'Meh.' I also know I'd never buy another house that did not either have a home theater or have a good space available to build another one.


Edited by cshawnmcdonald - 12/14/12 at 8:00am
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post #13 of 29
12/14/12 at 6:13am
Quote:
I would venture to guess the main reason most of us here do a dedicated HT is because of the fun and enjoyment we will get out it. That's the ROI you should expect.

Exactly. But if you are adding a bathroom, as I and many others have, you should DEFINITELY see some value added. The same if you are finishing an unfinished space. Personally, I just re-fied again and it appears as though I got a $50K boost from the now mostly finished full bathroom (everything works, just needs a little lipstick and mascara) and mostly finished room (all drywall up and theater 95% complete) over the last time I refied, which was about 18 months ago.
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post #14 of 29
12/14/12 at 6:40am
Quote:
Originally Posted by tlogan6797 View Post

Exactly. But if you are adding a bathroom, as I and many others have, you should DEFINITELY see some value added. The same if you are finishing an unfinished space. Personally, I just re-fied again and it appears as though I got a $50K boost from the now mostly finished full bathroom (everything works, just needs a little lipstick and mascara) and mostly finished room (all drywall up and theater 95% complete) over the last time I refied, which was about 18 months ago.

You are adding finshed square footage to your home, you are adding a bathroom, these are things in which you will always see a ROI. Converting my finished space into two seperate finished spaces with a theater is adding nothing to the value of my home. I also plan on being there for at least 10 years. Who knows the wife may never let us move, I wanted to move years ago.

I do agree with Shawn that I think for many it will have a wow factor and may push someone into choosing to buy your home but I bet a nice office, gym or bedroom would do the same for significantly less money.

It's like having half your basement taken up with a large bar. Some people would love it and for other's its a waste.

Look at some of the nice theaters on AVS, you are looking at $25k-$200k depending on components. Some guys spend $100k on speakers and $60k on a projector! Spend $60k on a kitchen remodel and you may even get a higher return on your investment depending on the area you live in.
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post #15 of 29
12/14/12 at 8:51am
I'm building a state of the art home theater. My thinking is sell the home theater and the house that comes with it is free.
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post #16 of 29
12/14/12 at 10:25am
My neighbor bought a house with a home theater in the basement. It turns out it was a fix and flip and they did an absolutely cheap job on the theater. Cheap in-walls, cheal wiring, cheap screen, cheap projector. Had you built it from scratch, you could have made it a lot nicer and better designed. I don't think a lot of families sit down and watch a whole movie anymore without talking, doing dishes, or whatever. So I'd say on average the theater isn't going to do much for you. Only SOME people, who might now be considered old fashioned, are still interested. Remember, the trend now is toward lower quality for the sake of convenience. I'd be willing to be more than 50% of people who watch movies at home do so through their crappy TV speakers.

I talked to one of my friends about getting a small stereo setup for his $1500 TV and he said "why would I do that, the TV is plenty loud!"

But, all things considered, if you build a theater or theater-like room in your house, just know that the most value will be 1) from finishing the room and 2) the value YOU get out of using the space. It might not make sense to sink a bunch of money into a space if you plan on moving fairly soon.

The theater room I'm going to be building soon will also double as a guest room on occasion, since it will be a private and comfortable space.
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post #17 of 29
12/14/12 at 11:05am
Quote:
I'm building a state of the art home theater. My thinking is sell the home theater and the house that comes with it is free.

Too funny! A couple of years ago we were driving back from north of Green Bay and there was an ad on the radio to come buy the most expensive beer in the country. $15K for one beer and you get to keep the restaurant!
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post #18 of 29
12/14/12 at 11:27am
I work for an Auto OE and we do whats called "PVC" analysis when benchmarking our competition.

Price, Value, Competitiveness

I'm sure the real estate market has similiar type of analysis.
Price is sales price on both sides (not cost)
Auto OE "Value" = apprasial for Real Estate side; what customer is willing to pay for, what the market will bear
Auto "Competitiveness" = when multiple items are bundled together, and sold for less price than the combined value
>>Makes customer feel they are getting a sweet deal

I had my home appraised just 2 years ago when did the re-fi to 3.5%, and just by coincidence for this poll I'm doing another re-fi for 2.75%, and the appraisal will be next week.

I'll share those real world SE Michigan results, including HT value.

There was a similiar thread here about same time 2 years ago, I wonder if a search is done what was said then???
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post #19 of 29
12/14/12 at 11:49am
As most people are not familiar with a full-on front projection system I can see where many folks don't see the value. But after experiencing what a nice, private cinema can do for Movies and TV, everyone sees the value - it just boils down to if they are willing to pay for it.

At my last house I had all of the electronics, even the in-ceiling speaker, available to a buyer but not included in the price. There were many potential buyers who just wanted me to "throw it in" to which I would reply - if there was a car in the garage while you were going through the house, would I simply just "throw that in" as well? Because that's the value we are talking about. To make a long story short, the couple that eventually purchased my home asked if I could demo the system and let them know exactly what they were purchasing. I obliged and they were hooked. In fact they felt they were getting a great deal since I was just asking market value for all of the equipment. They viewed it as getting free installation and programming ....plus they didn't have to do a thing!
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post #20 of 29
12/14/12 at 12:05pm
It’s kind of like a pool. To some people, a pool is an attractive luxury. To others, a pool is nothing but added work and $$ for upkeep.
Same with a home theater. To some, a home theater is a great place to get away and immerse ones self in a movie. To others, it’s simply a waste of space.
It’s really no different than building a home with a chefs kitchen with high end appliances. Or a home with a five car attached garage. Some people are turned off by all hardwood floors, or the color of the carpeting.
About six years ago, our realtor stated that our home theater, (fully treated, room within a room, two rows of seats) would be an easy sell if we decided to place our home on the market. Thankfully we never moved. So from my experience, a theater makes a home more sellable.
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post #21 of 29
12/14/12 at 12:09pm
Quote:
Originally Posted by mtbdudex View Post

I work for an Auto OE and we do whats called "PVC" analysis when benchmarking our competition.
Price, Value, Competitiveness
I'm sure the real estate market has similiar type of analysis.
Price is sales price on both sides (not cost)
Auto OE "Value" = apprasial for Real Estate side; what customer is willing to pay for, what the market will bear
Auto "Competitiveness" = when multiple items are bundled together, and sold for less price than the combined value
>>Makes customer feel they are getting a sweet deal
I had my home appraised just 2 years ago when did the re-fi to 3.5%, and just by coincidence for this poll I'm doing another re-fi for 2.75%, and the appraisal will be next week.
I'll share those real world SE Michigan results, including HT value.
There was a similiar thread here about same time 2 years ago, I wonder if a search is done what was said then???

I just refinanced my home for 2.50. Who would have thunk it...
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post #22 of 29
12/14/12 at 2:29pm
Quote:
Originally Posted by suffolk112000 View Post

Quote:
Originally Posted by mtbdudex View Post

I work for an Auto OE and we do whats called "PVC" analysis when benchmarking our competition.
Price, Value, Competitiveness
I'm sure the real estate market has similiar type of analysis.
Price is sales price on both sides (not cost)
Auto OE "Value" = apprasial for Real Estate side; what customer is willing to pay for, what the market will bear
Auto "Competitiveness" = when multiple items are bundled together, and sold for less price than the combined value
>>Makes customer feel they are getting a sweet deal
I had my home appraised just 2 years ago when did the re-fi to 3.5%, and just by coincidence for this poll I'm doing another re-fi for 2.75%, and the appraisal will be next week.
I'll share those real world SE Michigan results, including HT value.
There was a similiar thread here about same time 2 years ago, I wonder if a search is done what was said then???

I just refinanced my home for 2.50. Who would have thunk it...

You beat me by 0.25% , good for you, my inspection is Tues 9:30am, too late for me to switch for your broker.

Did your HT add value to your appraisal?
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post #23 of 29
12/14/12 at 5:55pm
Quote:
Originally Posted by mtbdudex View Post

You beat me by 0.25% , good for you, my inspection is Tues 9:30am, too late for me to switch for your broker.
Did your HT add value to your appraisal?

My son let the appraiser in because my wife and I were at work. My son said he was very impressed, but honestly I'm not sure.
I'd guess the theater helped the appraisal.
Funny thing is, we were getting ready to lock in at 2.75 and when we were in the bank office, I overheard a bank employee tell someone rates were currently at 2.50. I asked about it and without any issue, we were able to get the lower rate. smile.gif
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post #24 of 29
1/15/13 at 1:09pm
I think so...for some people. i never had a theater before and would not have built one my self (this room would have been a play room). but since the former owner had the ceiling mount for the pj, floating walls to hide the movies and equipment, risers for the 2nd row seating, dark colored walls (black on the screen wall) and windows that have insulated panels to block light and heat - we decided that this was great - i bought new gear and was all set! hopefully when we sell that someone would feel the same, though it will be a long time before that happens.
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post #25 of 29
1/17/13 at 6:16am
Thread Starter 
Nice to hear from someone who bought an existing theater, Jason. Thanks.
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post #26 of 29
1/18/13 at 4:46pm
If the space was previously unfinished, then yes it adds value, but you likely won't regain what you spent unless it was just basic finishing, no sound proofing and wasn't a dedicated HT, because you're adding useable SF.
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post #27 of 29
1/26/13 at 3:22pm
me and my wife are looking for our first home. She's agreed that when we purchase I can build a HT. The current home we are looking at is only 1800 sq ft and doesn't really have a great space for a HT, but it does have a second garage in back that is 400 sq ft.

I'm wondering if it would be smarter to finish out that 400 sq ft garage into a dedicated HT that is detached from the house or to build an addition to the house that will be used as a dedicated HT.

One of the big parts of this equation has been the discussion of potential ROI and which would be the better route. I'm not a real estate expert but I would think that adding to the house sq footage would be a better investment than finishing a garage that is detached from the house. Thoughts?
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post #28 of 29
1/26/13 at 4:17pm
Quote:
Originally Posted by tlogan6797 View Post

Exactly. But if you are adding a bathroom, as I and many others have, you should DEFINITELY see some value added. The same if you are finishing an unfinished space. Personally, I just re-fied again and it appears as though I got a $50K boost from the now mostly finished full bathroom (everything works, just needs a little lipstick and mascara) and mostly finished room (all drywall up and theater 95% complete) over the last time I refied, which was about 18 months ago.

Tom:

You've got to actually FINISH the space first!
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post #29 of 29
1/28/13 at 6:26am
Quote:
Tom:

You've got to actually FINISH the space first!
Come on down! Any weekend. I'm sure I can find SOMETHING for you to do.
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