Should I buy the elevator option for my new home?  It would cost about
$60K, and I need to know whether that money could be better used to
maximize the resale value of the house.

Here's the background:
I want to maximize the resale value of a home that is being built in
Baltimore,MD.  The townhouse is waterfront, and will cost roughly
$1.2M.

I have always heard that bathroom and kitchen upgrades really help
boost the resale value of a house, but I have not heard anything about
elevators.  The main reason I am considering the elevator is because
of the baby-boomers retiring.  This could be a good retirement home
for some couple, so maybe an elevator would make sense for that
demographic.  But at $60K, would the money be better spent (again, to
increase resale) on kitchen and bath upgrades?  Or are there other
upgrades to consider as well?

The question should be answered on two fronts:
1.  Will baby-boomers retiring make an elevator more desirable, thus
increasing resale and making it easier to sell in the $1.2M range AND
2.  If we don't choose the elevator, what upgrades would best maximize
resale for a $1.2M house?

In general, it appears that upgrades rarely increase a house's resale
value sufficiently to cover their cost.

"When buying a new home, what upgrades should we go for?  What holds
the most value?  Do we upgrade the lot?  Pick more square footage in
the house?  Add an extra bedroom?, etc.
 
A lot depends on why you are buying the house.  Are you buying it
mostly as a home or mostly as an investment?  There is a difference.
For the most part, upgrades are high-profit items for builders.  They
aren't designed to enhance the value of the house, but make you
happier with the house you do buy.

If you are looking at your home as an investment, then you buy from
the smaller to medium size in the tract and spend only a minimal
amount on upgrades.  If you are looking at your purchase as a home,
then you select upgrades that will enhance your quality of living.

One rule of thumb is to always upgrade the carpet and padding."

"Choosing a Property" RealEstate ABC (July 20, 2005)
http://www.realestateabc.com/answers/property.htm.  This site also has
a variety of information about maximizing resale value available at:
http://realestateabc.com/homebuying/house.htm.

Another way to approach the problem is to look at the return on
investment for remodeling different aspects of an existing home. 
According to HomeTech Information Systems, only deck additions fully
recover their cost.  Although neither fully recover their costs,
bathroom remodels and additions did better than major kitchen
remodels.

"2003 Cost vs. Value Report" By Sal Alfano, REMODELING Magazine
(November 1, 2003) http://www.remodeling.hw.net/industry-news.asp?articleID=23126&sectionID=173

With the population of elderly persons increasing, there will be
demand for more accessible homes.  However, peak demand is likely to
be 10 to 15 or more years away.  At least one design expert recommends
stacking closets "on both floors to allow for an elevator in the
future."

"New Homes for Aging Boomers" Design Basics (2005)
http://www.designbasics.com/homebuyers/designtrends-10.asp?FormUse=homebuyers

Of course, the elevator companies present residential elevators as
enhancing resale value.  For example:

"The Otis Residential Elevator is practical as well as functional. It
can enhance the prestige and resale value of your home, as well as
provide welcome assistance for elderly or handicapped individuals."

"Otis Residential Elevator" Otis Elevator Co.
http://www.otis.com/products/detail/0,1355,CLI1_PRD8108_PRT30_PST72_RES1,00.html

"Elevate Your Equity? with a custom home elevator. Once considered
commercial equipment and chosen strictly for mobility, an elevator now
provides a convenient, sophisticated, and affordable design solution.
Giving you flexibility in your floor plans while making the most of
the area's terrain. Lifting the status, prestige and market value of
your home ? in impressive style."

"Home Elevators" ACME Home Elevator Inc. (2005)
http://www.acmehomeelevator.com/prod_home.html

Personally, I would want to look at the other homes in the
neighborhood and see what upgrades they have.  To maximize your resale
value, you want to fit in your neighborhood, but not be above average.
 You probably do not want to be the only home in your neighborhood
with an elevator because you will have a very hard time getting
someone to pay more for it.  The peak demand for elevators is likely
to be 15 or more years away, so I would not consider one unless I was
confident I was going to be staying in the home at least that long. 
If your family will not materially benefit from the elevator, I would
use the money to either purchase upgrades that enhance the livability
of the home or just save the money.  There was certainly be no harm in
having the home built so that an elevator could easily be installed so
that an elderly person who might need one could be confident of doing
so.

I hope you enjoy your new home.

Sincerely,

Wonko
 
Search Terms: elevator resale value home; upgrade resale value home;
remodel resale value home