So you’re thinking about upgrading your home entertainment experience. You’ve thought about getting a breathtaking 4K projector and projector screen and building yourself a home cinema.
But you're not sure if you should make the move. You know you’ll be blown away by the stunning visuals of a 120 inch projection screen right in your home. With our guide how to design a home theater your friends won't want to watch movies anywhere else.
But, how will it impact your home's value? Is a home cinema a good investment? How much value does a home theater add? Are home theaters worth it?
We spoke with an assortment of realtors, home buyers and real estate developers to get their expert insight to answer these questions.
Alex Bracke - Valor Group of Pearson Smith Realty
Does a dedicated home theater increase resale value?
It can absolutely add to a home's resale value, particularly in a COVID world where buyers are looking for more stay-at-home activities than ever. Conversely in the higher-end luxury neighborhoods we serve, the lack of a home theater can certainly detract from the buyer's perception of a home's value if many other comparable homes they're seeing DO include a home theater.
Is it a good investment for a home?
This is an upgrade to a home that I wouldn't recommend purely for purposes of selling a home, particularly in the short term uber-seller market that we find ourselves in. But as an upgrade to use while you live in the home, it can make for an intelligent hedge against a slower buyer's market where luxury items like a home theater will definitely help your home to sell faster and for more money than it would otherwise.
What is the return on investment?
ROI is going to greatly vary depending on the area (is a home theater the norm or the exception?), housing supply (currently, homes are maxing out appraised value and even going above it, with or without a home theater), the level of upgrades an individual does to their theater room, etc.
Does it make a difference where the home is being sold? How do you market that a home has a dedicated home theater?
Definitely. As a real estate marketer, I like to focus my marketing on things that set that particular home apart from the rest of the homes available. In more affluent neighborhoods where home theaters are more common or even expected, we may focus less on the home theater because it doesn't make that home unique. But for the majority of properties, a home theater is often a huge selling point that we'd focus a lot of time properly showcasing to tell the story of the improved lifestyle the prospective buyer can expect.
Karen Condor - ExpertInsuranceReviews.com
Will adding a home theater increase resale value?
Yes, but not as much as other home improvements and remodels, such as renovating a kitchen or a bathroom, or adding a bedroom, a garage, or a deck.
Is it a good investment for a home?
It’s a good investment if your property has the area to accommodate a room addition, or, if you’re remodeling an existing room, you still have a room that is a den or rec room. It’s also a good investment if a home theater is a feature in many of the homes in your neighborhood.
Also be aware that if you’re adding a room, your costs will also include an increase in your homeowners insurance. You need to update your insurance company when you renovate, and your rate will increase in accordance with the new square footage of your addition.
If you’re not adding a room but you’re adding a lot of equipment, also contact your home insurance agent: You may need to increase your personal property coverage.
What is the return on investment?
The return on investment is usually 65 percent.
Does it make a difference where the home is being sold?
Yes, the higher-end or luxury neighborhood in which the house resides, the more attractive a home theater will be to potential homebuyers. A dedicated home theater is not on the priority list for starter homes and would only be a nice-to-have feature in mid-range homes.
How do you market that a home has a dedicated home theater?
Find out if the seller plans to include all of the audio and video components, seating, and other elements in the home purchase. If so, then market the home theater as one of the additional amenities. And if the home theater was recently installed and features the latest entertainment tech, note that as well.
And during showings, home staging should include having the home theater in action, playing a movie so that potential buyers can sample the experience.
Ashley Romiti - Home Life Digest
A home theater is not a great addition if you are looking to increase your home's value. Dedicating a space as a home theater is similar to adding an aquarium, installing a pool, etc. – It will draw a limited number of buyers when it comes time to sell. This fact is true for every market; you will only entice individuals who have dreamt of having a home theater in their home, and they will be selective in the technology you have installed, making it more challenging to sell the house.
If you already have a home theater, how you market it will depend on the setup. If you have a custom theater with lighting control and leveled seating, you will need to market the room as a home theatre. Be sure to include the details regarding what technology is installed – This will be very important to any potential buyer. However, it is recommended that your home theater conversion remain limited.
Your best option would be to convert a room with external features and then convert it back to normal once it comes time to sell. This will improve your buyer pool and increase your chance of a higher selling price.
Josh Eberly - 717 Home Buyers
Gone are the days when home theaters were one of the largest selling points of a home, where the whole tour of the home led up to the reveal of the massive screen with comfy chairs and a mini bar for easy access to drinks and snacks for the family.
For a very specific demographic, home theaters remain a must have in their dream home, but for most Americans looking to step up in the housing market, these spaces usually go unused. Home theaters will continue to increase the resale value of the home, but home builders and investors should strongly consider changing the functionality of the room.
For most young people, they would rather have more open, social spaces in their home where discourse becomes possible. To market a home with a home theater, potential demographics range from a family with young children, whose parents think the theatre will provide necessary entertainment, to home buyers of an older generation who enjoy the cinema and aren’t able to get out as much as they used to.
John Romito - Heart & Home Real Estate
The idea of a home theater as a good investment really depends on who we ask and the value they assign to the space, the tech, and the configuration of the theater itself. This is where the ambiguity enters the equation, because all these particular yardsticks can be quite subjective, and vary wildly among appraisers. If the technology involved is exceptional, or bleeding edge new, this may translate to a price boost, but not necessarily. Seats that are raised, or that recline will likely factor more heavily, if they factor at all. Like swimming pools, it is a feature that varies in value from agent to agent and appraiser to appraiser. Conventional wisdom suggests investing in a home theater for the enjoyment of the homeowner, not for its potential resale value.
Henry Angeli III, MBA - Henry Buys Homes LLC
Does a dedicated home theater increase resale value?
In my experience, for appraisal purposes, a home theater isn't going to increase resale value much at all and if it does, it's a negligible amount in comparison to the home's base price. What it does increase is the appeal value and someone that especially wants this in a home may be willing to pay a little more for the home.
Is it a good investment for a home?
It would only be a good investment if you plan to stay long term and love watching movies and having a theater is your dream. It would not make a good investment if it's for a property you plan to flip short term. It would not be a good one either for a rental but however, may be a nice investment for short term vacation rentals.
What is the return on investment?
There typically isn't any other than appeal value for potential buyers or vacationers in short term rentals.
Does it make a difference where the home is being sold?
This wouldn't really make a difference but lower income neighborhoods are less likely to have homes with one. Those who are moving into higher end areas typically have the capital to afford installing one so not finding a home with one won't really be a deal breaker for the more wealthy buyers.
How do you market that a home has a dedicated home theater?
This is simply added as an extra feature of the home and is typically bragged about in the long description on the MLS listing for the home. Most people, however, are mainly considering size, beds, baths, location, and layout when buying a home.
Bill Samuel - Blue Ladder Development
Yes, adding a home theatre room will absolutely add value to your home. How much value it adds to your is impossible to answer as it will be unique to each specific situation. Generally speaking you don't get back all of the money you spent on an upgrade like this but it will certainly make your home standout above the competition and make your home more marketable.
Taking several high resolution photographs of the home theatre space is the best way to market this specific feature of your home. Be sure to pick out the best images from the bunch and include them within your online listing.
Guy Nizri - The Local Home Buyers
There are very few things you can add to your home that would please every person that views it, but adding a home theater would be up there.
Most people would be thrilled to have a home theater in their new home and would even pay more for a home with a theater, especially in the period we are currently in where people are looking for unique experiences without leaving home.
Personally, I think it’s a good investment for a home that should set it apart when it goes up for sale. As long as you don’t put too much money into the home theatre, I estimate that clients should be able to get about 50% more of the amount they initially put into it when selling.
Peter Gray - Pyramid Real Estate Group
I have seen home theatres add enormous value, especially in ultra premium high-end homes. It can solve a problem. It can define a room!
I have seen an unfinished attic reconstructed into a fabulous home theatre and it transformed the look and feel of the entire house. Instead of dead space, this became the home's heart and soul. It defined the house and in a way few could have imagined. This home theatre, effectively, staged the home and we all know how that staged homes sell faster and at a higher price, based on industry surveys and analysis.
Shea Adair - w/eXp Realty
As a Full-Time Real Estate Investor, I can answer this question easily! Absolutely not! With that been said, houses in the $1,000,000 and up typically have a Media Room, so some type of Media Screen that is large will be expected. It's definitely not a good investment. If the question is to add it for resale reasons, then I definitely would NOT do so. Buyers of that price range will add their own of preference, if it isn't already included.
In my opinion, it doesn't matter where the home is being sold; it really depends on the price range of the house; that will determine the type of buyer you're dealing with and what their expectations are. No special marketing needs to be done, regarding the house having a Movie Theatre. As long as it is noted, nothing else is needed. Movie theatres aren't used that much; as people want to be outside; not cooped up in a house or theatre
Tyler Forte - Felix Homes
Turning a bonus room or spare bedroom into a home theater is a great way to increase your home's value. A dedicated home theater typically costs $10,000 - $30,000 to install and the return on investment when it comes time to sell is roughly 65% of the cost. For example, if you spend $10,000 to install a home theater, you will likely increase your home's value by $6,500.
Not only will a home theater increase your home's value but it will also make it easier to market. Home theaters are a unique feature that are typically found in luxury homes. It's quickly becoming one of the top luxury home features as movie theaters remain closed due to Covid.
When selling a home with a theater make sure your real estate agent calls attention to this unique feature in the listing's description. Also, in preparation for the listing photos, consider buying some home theater accessories like a popcorn machine or baskets of candy to increase nostalgia.
Matt Rostosky - Cashofferky.com
In a way, it does boost a home's value by about a few percent because converted spaces that transformed into home theaters make up a luxury section of the house. That's because some buyers value their entertainment time at home and would like to have a ready space for it. But be ready to make the space flexible as some buyers want to have rooms converted according to their needs.
Get everything you need to build your home theater from ProjectorScreen.com
If you’re looking to learn more about getting a cinema screen for your home theater you can check out our guide to buying a projector screen.