Sylvia and I are in the process of building a new custom home in SW Austin. This will be our second custom (and new) home. All other homes we’ve owned have been resales. On the first one we built in 2003, we went $50K+ over budget by adding too many upgrades and making too many additions to the home, including an expanded second story. It was our first time building a home and we somewhat lost control over ourselves.
This time we’ve sworn to be more disciplined and to stay within budget, or to go over ONLY on things that are important to us or that add value to the home. We actually have a pre-established “over budget” amount that we’ve put into place mentally.
One of the items that remained undecided up until now, was whether to have tankless water heaters in the home instead of the traditional water heaters. After a lot of research, we decided against the tankless water heaters.
The reasons are:
1) The $3,000 cost of this upgrade will add little or nothing to the reslae value of the home.
2) We probably won’t live in the home long enough (we expect 4 years max) to recoup the cost in energy savings.
3) There were enough spotty reviews about these systems online to give us pause.
4) If we’re going to spend that amount on an upgrade, we’d rather have it be something more tangible that can be seen and/or used daily, like better appliances or upgraded flooring, or better landscaping and trees.
Passing up on the upgrades when building a new home is tougher than one might think, at least for some people, us being those kind of people. I know of buyers leaving a builder’s showroom selection center after adding $20K to $70K onto the cost of their home in one afternoon.
In the case of the tankless water heaters, we may have made a different decision if we were planning to live in the home for the next 20 years. Our builder is in fact putting them in the spec homes he’s building across the street from us, and I suppose they will become more common in coming years. But budget discipline wins the day on this particular decision, at least this time.