5 ms·

Doing something for pure status signalling is considered crass. Expensive hobbies are not. I think they should be, but they're not.

by blagie 4y ago

steveBK123 4y ago
Exactly. To me, a $500k unnecessary renovation throws more money away than a $70k vs $40k car. At least with the car you are likely getting safety features and extensive sensor suites for driver assist for the money, that have tangible impact on your driving experience. Or Spending 5-10x on a $10k appliance where a $1-2k one would do. These people tend to get the whole set, so it's a good $30-40k worth of kitchen appliances that could easily be replicated for $5k total otherwise. Does a better fridge/freezer really help you cook better? Do even most experienced cooks get noticeable benefit of a $10k range or oven?
- prpl 4y ago
  One slight different is that spending on your home will generally add value to it. It may not be necessary, and you may not get a dollar-for-dollar out of it, but it’s added value nonetheless. I cook a lot, I personally would like a higher quality stove - I’ve killed one before because I (an)use the broiler a lot (it wasn’t terribly old), but I probably would do an NXR or something. maybe in the $2k. Or a used Wolf/viking from one of the people you mention I’d rather buy a nice oven than a bunch of shit appliances though. People love their air fryers, over the stove microwave, countertop oven, instant pot, etc…
  - steveBK123 4y ago
    I think most people delude themselves that their big renovations added any incremental value to their home. Usually the cost was financed and thus even higher than the sticker price, all-in. Further, the holding periods are measured in a decade +/- often, so the general market moves contribute more to the sales price than whatever you'd done to the kitchen/bath. On the margin, having a move-in ready home that's been renovated well enough recently enough, generically enough, ensures reasonable liquidity of being able to sell the home for a reasonable price reasonably quickly. For many this means replacing some dated appliances, repainting, and strategic spending on a few items that may be out of style or more aged, like bathroom vanity or replacing a linoleum top. Extravagant, expensive, specific renovations may actually detract because the general markets taste are not your taste and so you've either reduced the number of likely buyers, or half the universe of buyers are going to actually deduct value of your renovation because they may want to undo whatever you've done. Spending $2k replacing a worn appliance or buying a $200 air fryer are two orders of magnitude off from the expenditure levels I am referring to.
    - neon_electro 4y ago
      >On the margin, having a move-in ready home that's been renovated well enough recently enough, generically enough, ensures reasonable liquidity of being able to sell the home for a reasonable price reasonably quickly. This is the motivation I have to invest further in what already feels like a generally "move-in ready" home; my "move-in ready" is not others' "move-in ready", so my goal is to find all the objections and invest in making them less objectionable :)
    - dsfyu404ed 4y ago
      Renovations basically never add value unless you check more checkboxes or add on-paper features. Cramming a shower stall into a half bath, adding a dishwasher where there wasn't one, finishing an attic/basement, that kind of stuff.
  - blagie 4y ago
    In my area, if I were to spend $50k renovating my home, the value would increase by approximately $0. If I were to spend $300k renovating my home, the value would increase by approximately $100k. The only real increase in home value comes from additions which add bedrooms. If I were to spend money converting an attic, a basement, or adding an add-on, I'd probably come out even at the sale. And renovations are quickly depreciating assets. I'm much better off doing that right before a sale. A new dishwasher will be an old dishwasher before too long.
    - fbdab103 4y ago
      >I'm much better off doing that right before a sale. I would love to see industry averages on if pre-sale renovations make any sense at all. Considering the outright financial expenses, possible financing, potentially weeks/months of organizing contractors, dealing with overages, delaying the house sale, yada yada. If the work takes more than a week (so not just appliances, painting, etc) is there generally a positive expected return?
      - BirdieNZ 4y ago
        > I would love to see industry averages on if pre-sale renovations make any sense at all. Considering the outright financial expenses, possible financing, potentially weeks/months of organizing contractors, dealing with overages, delaying the house sale, yada yada. They must surely make sense, given that there are people who "flip" houses (buy a house, do a quick paint/bathrooms/kitchen renovation on it and sell it for a nice markup).
        fbdab103 4y ago
        I was considering that, but flippers are likely better prepared to purchase a house, do the N activities which make time/financial sense, and get out of the market as quickly as possible. They likely possess the skills to do some of the work themselves, have existing relationships with plumbers/electricians to perform specialized work, know how to handle required permitting, have a realtor on the ready, and a dozen of other things which I am ignorant. The average homeowner is unlikely to have any of those relationships or knowledge, so there are a lot more things that could go wrong that delay the project or cause costs to balloon. Maybe a lot of people mistakenly believe that renovating the kitchen for $20k will add $40k value to the house, but in practice, the project will cost $34k, take five weeks, and ultimately only raises the final sale price to $35k.
- ipaddr 4y ago
  500k or 500m in renovations will increase the value of the property. A car is worth 20% less the day you drive it off of the lot and keeps losing value. Having freezer space can save you thousands of dollars in food.
  - ejb999 4y ago
    of course it will, but spending 500K in remodeling, doesn't mean the house is necessarily going to be worth 500K more - it might, it might not.
  - steveBK123 4y ago
    Cars are absolutely depreciating assets. However a $70k car generally has a much better set of class leading accident avoidance & safety features than a $25k car which will generally be minimum legally required for compliance. A new car has a much different safety profile than a 10 or 20 year old car. Watching crash videos on YouTube is very illuminating as to how far we've come even versus a car from 2000. Modern advanced cars will warn you about rear & front cross traffic, actively keep you from driving off the road if you fall asleep, emergency brake for obstacles, keep you from changing lanes into a car in your blind spot, and many other things that were pretty unheard of 10-20 years ago. My car even flashes lights and beeps at me if I am opening the door and it detects oncoming cars or bikes. A $500k renovation of a home is usually financed and adds less than the $500k of value to the resale price to the homes (lets say, $400k to be generous), while costing north of $750k by the time all the payments are made. So $100-350k of waste, conservatively.
    - kens 4y ago
      The crash videos of old vs new cars are very interesting (and scary). Especially 1959 Bel Air vs 2009 Malibu. In the older car, you smash into the dashboard and then the passenger compartment collapses and crushes you. In the new car, you hit the airbag. Of course you don't expect much from 1959, but even 1992 Nissan vs 2016 Nissan is a huge difference in survivability. I highly recommend the video: https://www.youtube.com/watch?v=TikJC0x65X0 https://www.youtube.com/watch?v=TikJC0x65X0
- hindsightbias 4y ago
  That renovation probably paid for a lot of renovators Raptors.
  - steveBK123 4y ago
    exactly, which closes the circle explaining how average car prices have gone up so much.. largely driven by expensive pickups hahaha!
- xyzelement 4y ago
  I dunno. We recently bought a house where the kitchen had been recently renovated. I don't know if our appliances are super high end but they are definitely on that side, and it makes the kitchen feel great. We probably wouldn't spend as much time in it otherwise. So let's say that kitchen cost 40k (I have no idea)...but lasts us 20 years. That's 2k a year for a very enjoyable part of our house, probably the most used space by far. On the contrary, if we had spent an additional 40k on our car, how much of a game changer would that have been and how long would it have lasted?
  - steveBK123 4y ago
    Again you are talking a $40k renovation, I am talking $500k renovation. $40k for a kitchen is on the order of magnitude of getting all your appliances reasonably up to date, plumbing/fixtures, electrical and cabinetry/countertop refreshed, without anything being exotic or luxury. The bare bones one could probably refresh everything in the kitchen has to be easily $20k, so the incremental "above bare minimum spend" here is only $20k and therefore very reasonable. That is a reasonable level of taking something outdated which is hard to market and making it up to date move-in ready and therefore quicker to sell. To contrast for example in my experience, a Miele dishwasher for $800 washes dishes vastly better than a $400 GE. To the point it is significantly labor reducing. On the other hand, does a $10k subzero freezer/fridge keep my vegetables better than a $2k Samsung? Most people underestimated how much of their homes value appreciating over the 5-20 years of ownership is purely the land value increases over the long term due to real estate inflation and the relative performance of their local markets. Ie - if all the condos in NYC went up 2x from 2004-2007, mine going up similarly isn't because I put fancy tiles in my toilet.
ejb999 4y ago
when I had my last kitchen remodel done (a modest one,but very nice), the builder that did it said with all his clients there is an inverse relationship between how much people spend on their kitchen and appliances, and how much cooking they do - i.e. the people who spend the most, actually do the least cooking, and vice-versa. In my own limited experience, I tend to agree. I'll take an awesome cook (my spouse in this case) and a modest kitchen, over a modest cook and an awesome kitchen any day.
- nostrademons 4y ago
  I was appliance shopping recently and it seems like the most expensive appliances are often not the best. If you just want to cook, you're usually better off with a good LG or GE oven than with a Viking, which test notoriously poorly. Same with many consumer products - a Honda or Toyota will be more reliable with more convenience features than a BMW or Rolls Royce; a Chicco or Britax carseat is often safer, more comfortable, and more convenient than a Peg Perego; a Samsung or Apple smartwatch has a lot more features than a Rolex. A good rule of thumb I've had for getting good consumer products is to buy the high end of the mass market; don't skimp on budget items, but also don't buy products that are priced so the average person can't afford them. Makes sense economically. Mass market manufacturers can amortize their R&D and quality control over many more units than luxury brands. The point of the luxury brand is explicitly countersignaling, showing that you can afford to spend more money on an inferior product.
  - rosnd 4y ago
    > - a Honda or Toyota will be more reliable with more convenience features than a BMW or Rolls Royce What convenience features? Is the Honda or Toyota really meaningfully more reliable during the first couple of years of ownership?
    - nostrademons 4y ago
      More cupholders, the ability to seat 3 carseats abreast, fabric rather than leather seats, better gas mileage, fits more easily in tight parking spots (and you care less if it gets dinged because you didn't pay $70K for it). Only thing the BMW really has on them is soundproofing (and probably acceleration & handling, but I don't care much about that). And I care more about how reliable it is at > 10 years of ownership, not < 3 years (when nearly everything is reliable). My Honda Fit is coming up on 14 years old and runs like new.

Doing something for pure status signalling is considered crass. Expensive hobbies are not. I think they should be, but they're not.

by blagie 4y ago

Doing something for pure status signalling is considered crass. Expensive hobbies are not. I think they should be, but they're not.

steveBK123 4y ago

Exactly. To me, a $500k unnecessary renovation throws more money away than a $70k vs $40k car. At least with the car you are likely getting safety features and extensive sensor suites for driver assist for the money, that have tangible impact on your driving experience. Or Spending 5-10x on a $10k appliance where a $1-2k one would do. These people tend to get the whole set, so it's a good $30-40k worth of kitchen appliances that could easily be replicated for $5k total otherwise. Does a better fridge/freezer really help you cook better? Do even most experienced cooks get noticeable benefit of a $10k range or oven?

prpl 4y ago
One slight different is that spending on your home will generally add value to it. It may not be necessary, and you may not get a dollar-for-dollar out of it, but it’s added value nonetheless. I cook a lot, I personally would like a higher quality stove - I’ve killed one before because I (an)use the broiler a lot (it wasn’t terribly old), but I probably would do an NXR or something. maybe in the $2k. Or a used Wolf/viking from one of the people you mention I’d rather buy a nice oven than a bunch of shit appliances though. People love their air fryers, over the stove microwave, countertop oven, instant pot, etc…
- steveBK123 4y ago
  I think most people delude themselves that their big renovations added any incremental value to their home. Usually the cost was financed and thus even higher than the sticker price, all-in. Further, the holding periods are measured in a decade +/- often, so the general market moves contribute more to the sales price than whatever you'd done to the kitchen/bath. On the margin, having a move-in ready home that's been renovated well enough recently enough, generically enough, ensures reasonable liquidity of being able to sell the home for a reasonable price reasonably quickly. For many this means replacing some dated appliances, repainting, and strategic spending on a few items that may be out of style or more aged, like bathroom vanity or replacing a linoleum top. Extravagant, expensive, specific renovations may actually detract because the general markets taste are not your taste and so you've either reduced the number of likely buyers, or half the universe of buyers are going to actually deduct value of your renovation because they may want to undo whatever you've done. Spending $2k replacing a worn appliance or buying a $200 air fryer are two orders of magnitude off from the expenditure levels I am referring to.
  - neon_electro 4y ago
    >On the margin, having a move-in ready home that's been renovated well enough recently enough, generically enough, ensures reasonable liquidity of being able to sell the home for a reasonable price reasonably quickly. This is the motivation I have to invest further in what already feels like a generally "move-in ready" home; my "move-in ready" is not others' "move-in ready", so my goal is to find all the objections and invest in making them less objectionable :)
  - dsfyu404ed 4y ago
    Renovations basically never add value unless you check more checkboxes or add on-paper features. Cramming a shower stall into a half bath, adding a dishwasher where there wasn't one, finishing an attic/basement, that kind of stuff.
- blagie 4y ago
  In my area, if I were to spend $50k renovating my home, the value would increase by approximately $0. If I were to spend $300k renovating my home, the value would increase by approximately $100k. The only real increase in home value comes from additions which add bedrooms. If I were to spend money converting an attic, a basement, or adding an add-on, I'd probably come out even at the sale. And renovations are quickly depreciating assets. I'm much better off doing that right before a sale. A new dishwasher will be an old dishwasher before too long.
  - fbdab103 4y ago
    >I'm much better off doing that right before a sale. I would love to see industry averages on if pre-sale renovations make any sense at all. Considering the outright financial expenses, possible financing, potentially weeks/months of organizing contractors, dealing with overages, delaying the house sale, yada yada. If the work takes more than a week (so not just appliances, painting, etc) is there generally a positive expected return?
    - BirdieNZ 4y ago
      > I would love to see industry averages on if pre-sale renovations make any sense at all. Considering the outright financial expenses, possible financing, potentially weeks/months of organizing contractors, dealing with overages, delaying the house sale, yada yada. They must surely make sense, given that there are people who "flip" houses (buy a house, do a quick paint/bathrooms/kitchen renovation on it and sell it for a nice markup).
      - fbdab103 4y ago
        I was considering that, but flippers are likely better prepared to purchase a house, do the N activities which make time/financial sense, and get out of the market as quickly as possible. They likely possess the skills to do some of the work themselves, have existing relationships with plumbers/electricians to perform specialized work, know how to handle required permitting, have a realtor on the ready, and a dozen of other things which I am ignorant. The average homeowner is unlikely to have any of those relationships or knowledge, so there are a lot more things that could go wrong that delay the project or cause costs to balloon. Maybe a lot of people mistakenly believe that renovating the kitchen for $20k will add $40k value to the house, but in practice, the project will cost $34k, take five weeks, and ultimately only raises the final sale price to $35k.
ipaddr 4y ago
500k or 500m in renovations will increase the value of the property. A car is worth 20% less the day you drive it off of the lot and keeps losing value. Having freezer space can save you thousands of dollars in food.
- ejb999 4y ago
  of course it will, but spending 500K in remodeling, doesn't mean the house is necessarily going to be worth 500K more - it might, it might not.
- steveBK123 4y ago
  Cars are absolutely depreciating assets. However a $70k car generally has a much better set of class leading accident avoidance & safety features than a $25k car which will generally be minimum legally required for compliance. A new car has a much different safety profile than a 10 or 20 year old car. Watching crash videos on YouTube is very illuminating as to how far we've come even versus a car from 2000. Modern advanced cars will warn you about rear & front cross traffic, actively keep you from driving off the road if you fall asleep, emergency brake for obstacles, keep you from changing lanes into a car in your blind spot, and many other things that were pretty unheard of 10-20 years ago. My car even flashes lights and beeps at me if I am opening the door and it detects oncoming cars or bikes. A $500k renovation of a home is usually financed and adds less than the $500k of value to the resale price to the homes (lets say, $400k to be generous), while costing north of $750k by the time all the payments are made. So $100-350k of waste, conservatively.
  - kens 4y ago
    The crash videos of old vs new cars are very interesting (and scary). Especially 1959 Bel Air vs 2009 Malibu. In the older car, you smash into the dashboard and then the passenger compartment collapses and crushes you. In the new car, you hit the airbag. Of course you don't expect much from 1959, but even 1992 Nissan vs 2016 Nissan is a huge difference in survivability. I highly recommend the video: https://www.youtube.com/watch?v=TikJC0x65X0 https://www.youtube.com/watch?v=TikJC0x65X0
hindsightbias 4y ago
That renovation probably paid for a lot of renovators Raptors.
- steveBK123 4y ago
  exactly, which closes the circle explaining how average car prices have gone up so much.. largely driven by expensive pickups hahaha!
xyzelement 4y ago
I dunno. We recently bought a house where the kitchen had been recently renovated. I don't know if our appliances are super high end but they are definitely on that side, and it makes the kitchen feel great. We probably wouldn't spend as much time in it otherwise. So let's say that kitchen cost 40k (I have no idea)...but lasts us 20 years. That's 2k a year for a very enjoyable part of our house, probably the most used space by far. On the contrary, if we had spent an additional 40k on our car, how much of a game changer would that have been and how long would it have lasted?
- steveBK123 4y ago
  Again you are talking a $40k renovation, I am talking $500k renovation. $40k for a kitchen is on the order of magnitude of getting all your appliances reasonably up to date, plumbing/fixtures, electrical and cabinetry/countertop refreshed, without anything being exotic or luxury. The bare bones one could probably refresh everything in the kitchen has to be easily $20k, so the incremental "above bare minimum spend" here is only $20k and therefore very reasonable. That is a reasonable level of taking something outdated which is hard to market and making it up to date move-in ready and therefore quicker to sell. To contrast for example in my experience, a Miele dishwasher for $800 washes dishes vastly better than a $400 GE. To the point it is significantly labor reducing. On the other hand, does a $10k subzero freezer/fridge keep my vegetables better than a $2k Samsung? Most people underestimated how much of their homes value appreciating over the 5-20 years of ownership is purely the land value increases over the long term due to real estate inflation and the relative performance of their local markets. Ie - if all the condos in NYC went up 2x from 2004-2007, mine going up similarly isn't because I put fancy tiles in my toilet.

ejb999 4y ago

when I had my last kitchen remodel done (a modest one,but very nice), the builder that did it said with all his clients there is an inverse relationship between how much people spend on their kitchen and appliances, and how much cooking they do - i.e. the people who spend the most, actually do the least cooking, and vice-versa. In my own limited experience, I tend to agree. I'll take an awesome cook (my spouse in this case) and a modest kitchen, over a modest cook and an awesome kitchen any day.

nostrademons 4y ago
I was appliance shopping recently and it seems like the most expensive appliances are often not the best. If you just want to cook, you're usually better off with a good LG or GE oven than with a Viking, which test notoriously poorly. Same with many consumer products - a Honda or Toyota will be more reliable with more convenience features than a BMW or Rolls Royce; a Chicco or Britax carseat is often safer, more comfortable, and more convenient than a Peg Perego; a Samsung or Apple smartwatch has a lot more features than a Rolex. A good rule of thumb I've had for getting good consumer products is to buy the high end of the mass market; don't skimp on budget items, but also don't buy products that are priced so the average person can't afford them. Makes sense economically. Mass market manufacturers can amortize their R&D and quality control over many more units than luxury brands. The point of the luxury brand is explicitly countersignaling, showing that you can afford to spend more money on an inferior product.
- rosnd 4y ago
  > - a Honda or Toyota will be more reliable with more convenience features than a BMW or Rolls Royce What convenience features? Is the Honda or Toyota really meaningfully more reliable during the first couple of years of ownership?
  - nostrademons 4y ago
    More cupholders, the ability to seat 3 carseats abreast, fabric rather than leather seats, better gas mileage, fits more easily in tight parking spots (and you care less if it gets dinged because you didn't pay $70K for it). Only thing the BMW really has on them is soundproofing (and probably acceleration & handling, but I don't care much about that). And I care more about how reliable it is at > 10 years of ownership, not < 3 years (when nearly everything is reliable). My Honda Fit is coming up on 14 years old and runs like new.