Would you pay more for a home with no maintenance cost?

Question

I'm wondering if you were to have a do over when you were about to buy the home that you currently live, would you have paid what you paid for the house in community that you live in or paid more for a similar house in a zero maintenance cost community and the house was a zero energy grid ready home (This means you will have little to no electric or water bills every month on top of NO HOA fees)?

If you would pay more, How much more? 20% more...30% more?

Greg Scott · Answer

Interesting thought experiment.....

First off, I'd be very skeptical such a thing exists.

Second, I would be skeptical of the fine print.  What if I don't like the kitchen and want to put in granite counter tops after it is built.  Would that be covered?  What if I tried to install it myself and screwed it up, who would pay?

Next I would be skeptical of the financials backing that claim.  What if all my neighbors asked for repairs before me.  Would the company providing that insurance go bust?

Then I would be worried about financing.  Would the bank provide me more leverage or would they base comps on the neighborhood across the street.  That is an issue both at time of purchase and at time of sale.

Assuming all those risk factors can be resolved with a high degree of confidence, I'd do the math and assume a 5 year payback.  If not, I'd want a 1 or 2 year payback.

Just my 2 cents.

Tanya F. · Answer

I like this kind of brainstorming! There should be more of it~

I'd really want to scrutinize the engineering. I'd want to see performance data, understand backups that should be built in. I haven't looked up Mandalay, but have the bugs been worked out of theses neighborhoods? How big of a community are you thinking?

Daniel Okorie · Answer

Very nice. I plan on going to the sustainable city towards the end of this year or next year during the dubai winter. Why do you say it's a PR stunt?

There are bunch of developers and builders going this route or already doing this where it is necessary like arizona, california, and hawaii.

No large spec builder that I know of in houston is really implementing alot of this "green" tech on a large scale.

In terms of the zero maintenance, I meant in regards to your HOA maintenance fees. For instance in a mix use development, if a portion of the commercial space could subsidize or partially offset the HOA fees, would that be a perk that would sway you to buy in that neighborhood or community along with all the other green amenities in the home such as solar and greywater that would offset some or all of your utility bills? How much more would you pay for such amenities in the same home that you live in if it was available at the time of purchase? Would you care if those were options?

Looking at it from a consumer standpoint, I personally would pay more....as much as I can afford. If I were to spend $250k and up on a new home, i'd want something that would somewhat future proof my home. I'm not just looking at the pay back but the overall impact of my purchase decision socially, economically, and environmentally.

To me it is easier to add granite, new cabinets, and latest lighting than to add solar with battery storage, greywater, spray foam insualtion...etc.

What do you think?

Morgan Nilsen · Answer

I live right next to sustainable city in Arabian ranches. Hit me up if you want a BP contact when you get here. I run the BP meetups in Dubai and I’m happy to show you around!

Greg Scott · Answer

I’ve actually stood in the sustainable city. In my opinion it is mostly a PR stunt  and not a viable model of the future.

I was not familiar with Mandalay. From what I read it talked about reduced energy costs but I didn’t see anything on zero maintenance.  Reduced energy costs that can be proven should translate to a higher purchase price.

Daniel Okorie · Answer

Thanks a lot for the feedback. Please share with anyone you think would be interested in contributing.

All of these homes will be built to EPA LEED standard. In terms of bugs, Building is very binary. Once you've built a floor plan or developed land for residential, commercial or industrial buildings, it's basically tweak, rinse, and repeat based on the project. Mandalay has a 2000 home subdivision that they are building but other builders have smaller and larger projects. There's builder in tyler texas that builds 3 homes at a time, waits for them to sell, and repeats but he has enough land to build for 100 years that he purchased super cheap.

Daniel Okorie · Answer

Thanks for the feedback. But my question is based of communities and ideas that already exist or are being built as we speak. You can oogle Mandalay homes in arizona or the sustainable city in dubai (http://www.thesustainablecity.ae/). Let me know what you think.

Would you pay more for a home with no maintenance cost?

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