What’s Your Home’s IQ? [Q&A]

New technologies make your house “smarter” and may increase its value.

Whether you plan on living in your home long into retirement or selling it and moving on, you may want to consider investing in some tech enhancers now to make your home safer, greener and more efficient.

Carol Meyer is a financial advisor with Merrill Lynch. She says making simple upgrades can help better protect your investment and may even increase your home’s value.

When it comes to increasing the value of our home asset, what upgrades give us the best return on our investment?

For those fortunate enough to have found their “forever home,” it’s important to remember that homes age along with their occupants. A house that falls into disrepair may be more difficult to live in or could even become downright unsafe.

First and foremost, keep up the home. A backlog of repairs and maintenance can affect the value of a home asset. Second, you may want to consider upgrading your home with newer technologies that can help you age safely while you live there or help make your home more attractive to buyers when you’re ready to sell.

A recent Merrill Lynch/Age Wave survey shows six in 10 retirees are interested in technologies such as cleaning robots, heated driveways and innovations that could even allow them to monitor their health at home. This demonstrates that these technologies are in demand.

If you’re interested in seeing a return on your investment because you plan on selling your home, you may want to consider technologies such as the latest in home entertainment. “Multi-room wireless audio” systems allow you to play different sounds in different rooms, using just a touchscreen controller or an app on your smartphone that’s connected to your digital music collection. Systems generally run between $200 and $400.

A connected kitchen may also be a good investment. In this case, your smartphone or computer allows you to control your oven’s temperatures remotely, or to use the builtin computer in your refrigerator to keep an inventory of what’s on your shelves. Expect to pay upward of $3,500 for a smart fridge, $1,400 or so for an electric range.

Given the impressive technology available for homes, where should we focus our technology investment when it comes to protecting our home asset?

When it comes to making your home safer and more secure, you can now use your smartphone, tablet or personal computer to operate a standalone security system or to augment one provided by a home security company.

You’ll need a camera ($150 to $200) that streams video to your phone or tablet via an associated app. For those who like to travel or those who have multiple homes, the ability to see what is going on inside or outside of their home at any given time is not only attractive to potential buyers, but it can also give you, the homeowner, peace of mind.

If we’re interested in reducing our carbon footprint, what green home technology options are available?

Most of us know to turn off the lights and water when you’re not using them, but now there are some new “green” technologies that can help you be a better steward of the environment.

An example of this is low-emissivity (low-e) windows. They capture the sun’s warmth and then emit low levels of radiant thermal energy—helping heat your home. You’ll pay about $15 per square foot more for low-e glass, but will recover the cost (and then some) over time through energy savings.

Just like monitoring your home’s security, a wireless lighting system controlled by an app on your phone, tablet or PC lets you manage your home’s energy usage from anywhere. The app allows you to turn your lights on or off and set your thermostat. You can get a pretty sophisticated setup for $200 to $300.

Additionally, solar has been around for a while, but many tax advantages are still in place. New in the last decade and something to possibly ask your contractor to install are photovoltaic roof shingles. According to one manufacturer, a cluster of 350 shingles could cut your electric bill by 40 to 60 percent.¹

When it comes to saving water, here’s an interesting fact to consider: According to the U.S. Environmental Protection Agency, Americans use as much as 1.2 trillion gallons of water for showering. Much of that goes down the drain each year as we wait for the water to heat up and about $2.5 billion is wasted in heating water.² A recirculation system, usually costing less than $400, can deliver hot water instantly, potentially lowering your water usage instantly and potentially lowering your water and energy bills in the process.

Beyond this technology, you may want to ask your contractor to install a leak detection system using a solenoid valve (approximately $200 to $500) which signals when your pipes malfunction—or, in some cases, if a tap is left running, it then shuts off the water, potentially preventing a flood and saving thousands of dollars in home repairs.

Is it possible to increase the value of our home by investing in technology enhancers?

Before asking your contractor to get started on any upgrades we’ve mentioned, I recommend you talk to your advisor as part of a team of professionals like a local realtor about whether or not it makes sense for you to make these improvements on your particular home or homes. Some questions you might ask include:

  1. Given what I want in a house, should I sell or renovate?
  2. How should I fund my renovation?
  3. If I’m considering selling, is it worth it to renovate?

If you do decide to renovate and install some of these technologies, there are ways to cover the costs by bolstering your income from investments that generate steady income, such as bonds and dividend-paying stocks. Depending on your situation, another option to consider is setting up a line of credit, backed by your home or your investments.



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