Are Specialty Rooms Good Real Estate Investments?
The star attraction of the house, tailored for what you and only people like you could ever truly appreciate. That’s commonly what people imagine when they think of specialty rooms. Great grand rooms of expression; physical displays of an individual’s personality, character, and values.
The value of a special room in the market depends on its ability to attract buyers who value it. Very niche specialty rooms have a smaller buyer pool but potentially a pool willing to pay highly for it. Broader specialty rooms are more likely to draw in more people but cannot leverage larger premiums.
The man-caves, home spars, playrooms, and home theatres; are specialty rooms but extravagance is not the requirement needed to be titled a specialty room.
What Is A Specialty Room?
Specialty rooms are any structures on a property that do not fit the general assumption of being necessary for the average living requirements of a family who owns a home.
The definition adds a bit of subjectivity to its application as the term “average” living requirements vary greatly from continent to continent, city to city, neighborhood to neighborhood.
Because of that, for the uniformity of this post, I will be regarding the following rooms as essential and non-specialty:
- Bedrooms (1 for each member of the family).
- Bathrooms (2 in the home)
- Lounge (1 in the house)
- Kitchen and dining room(1 main kitchen)
Anything over the above structures will be classified as a specialty room.
The 2 Types Of Specialty Rooms.
You will come to find that the vast majority of specialty rooms come in either 1 of 2 categories; Utility specialty rooms and Luxury specialty rooms.
The differences between the 2 are as follows:
Utility Specialty Rooms:
These specialty rooms are there to assist families with being more efficient at providing or executing basic home tasks. The following are common Utility Specialty Rooms:
- Laundry/mudrooms – Assist with cleaning
- Spare bedrooms – To accommodate additional guests
- Powder rooms – Extra basic bathroom (toilet, sink, mirrors)
- Sheds – Outdoor maintenance
- Spare indoor or outdoor lounge/playroom –
- Chef’s kitchen – Spare kitchen within a home
Luxury Specialty Rooms:
These are rooms that will usually satisfy specific pleasure/recreational needs. A rule of thumb means to identify a Luxury Specialty Room is too consider whether or not a typical family would need the structure and whether or not the service is normally provided by dedicated recreational businesses.
Common Luxury Specialty Rooms include the following:
- Home theatres
- Outdoor sporting facilities (basketball/tennis courts)
- Man caves/Game Rooms
- Indoor/outdoor office
What Makes A Specialty Room Valuable.
There are 3 core factors in evaluating how valuable a specialty room is. They are its desirability, adaptability and cost requirements.
In its current state, how many people value the specialty room enough to either pay a premium for it specifically or are there enough people who value the room enough to increase the rate of offers received.
In most cases, Utility specialty rooms are more valuable to individuals because in most cases, they offer a common use service that they can see themselves using more often than they would a luxury specialty room.
A spare bedroom and laundry room; in most cases will be used more than a home theatre or home bar. The luxury specialty rooms are easier to substitute with 3rd party services like going to the movies or a local bar.
How easy is it to convert the room into something else? There is a higher chance that individual prospects will want to tweak a room to their personal needs and tastes than they are to want to have it as fixed as possible.
A detached property such as a cottage can be converted into staff quarters, a guest bedroom or a rental/Airbnb property. Compare that to converting something as special as a sauna, basketball court or home theatre.
The more restricted the use of the specialty room is, the more it needs a dedicated buyer who specifically values that aspect of the room. Relying on a single type of buyer is normally a disadvantage in real estate.
For the normal individual, a specialty room that requires consistent maintenance and specialist requirements is more a detrimental burden than a valued aspect of a property.
A spare bedroom or cottage can remain untouched for months on end without the need for huge costs to return it to functional use after.
On the other hand, any outdoor sports facilities like a tennis court or outside lounge area will routinely require cleaning and maintenance do defend against the wear and tear damage of being exposed to the elements.
Unless an individual is a regular user of the offerings of the specialty room, the more running costs it has – the less desirable it is.
Examples Of Specialty Rooms.
The following are 15 examples of some common Specialty rooms. I will be going into detail on the characteristics of each room and evaluating them on the above factors of Desirability, Adaptability and Upkeep cost.
Below I will be Scoring each specialty room with the following key metrics
- Desirability –
$ – Niche desirability (for very specific individuals – people outside the niche may not want it).
$$ – Common desirability (most people don’t have strong negative or positive views on the room).
$$$ – Broad desirability (Highly sought after – adds value in most scenarios).
- Adaptability –
$ – low adaptability (costly to change the room).
$$ – mediocre adaptability (can be changed to cater to a few specific purposes).
$$$ – Highly Adaptable (very few restrictions to change to something else).
- Upkeep Costs –
$ – low upkeep (does not require continuous maintenance).
$$ – medium upkeep (requires routine inexpensive maintenance).
$$$ – high upkeep (requires routine to continuous costly maintenance).
Examples Of Specialty Rooms – Table
Utility Specialty Rooms
Luxury Specialty Rooms
|Spare bedrooms.||bars and cigar rooms.|
|Outdoor/spare living rooms/game rooms.||theatres.|
|Staff quarters and or Cottage||Outdoor sports facilities.|
Utility Specialty Rooms.
1. Spare bedrooms.
What is it?
Any room with the specific purpose of providing additional accommodation to anyone who is not a core member of the household. Friends, relatives, and acquaintances.
From a value perspective, spare bedrooms give the most bang for their buck in the real estate world. The majority of homeowners will have to, at some point, accommodate a guest for overnight stays and a spare bedroom is preferable to a couch.
Universally, a spare bedroom is the most desirable specialty room on a property.
Another reason as to why spare bedrooms are so coveted is their flexibility. There are no essential overheads for setting up a spare bedroom beside a bed, windows and possible wardrobe.
This allows new owners to easily convert the room into anything else they might want instead such as an office, playroom, closet space, etc.
There is generally no regular upkeep costs that need to be made to a spare bedroom, The room can essentially be made into hospitable accommodation in a few minutes to a few hours without the need of high costs
Who is this for?
The vast majority of individuals and families will benefit and see value in a spare bedroom.
What is it?
A room outfitted with the necessary utilities for completing cleaning tasks, primarily laundry. But this can extend to kitchen cleaning tasks as well.
Laundry rooms are typically more desirable the larger the family inhabiting the home is. Bachelors or Spinsters are less likely to value this type of specialty room as much.
A laundry room is far less adaptable than most rooms. The focus on cleaning will involve a design on intertwined plumbing, shelves, fewer power outlets, and comfortable flooring.
The room will be optimized to make cleaning as efficient as possible. Carpet or wooden flooring; common is other rooms would hinder this purpose.
Laundry rooms don’t have many if at all any continuous upkeep costs that would take effect without the individual having used the facility.
At most, some individuals may have deep freezers in the laundry room to freeze foods. The electricity needed to continually keep this function running can be considered an upkeep cost.
3. outdoor lounging area or spare indoor lounges.
What is it?
An outdoor lounge area structure such as a veranda, gazebo, porch, balcony, terrace, patio or playrooms. Usually used as areas of gathering and or relaxing with friends, relatives, and acquaintances.
Spare lounges are another specialty structure that is preferred amongst families who would typically split use of one area as a dedicated children’s room and the other for the whole family/adults.
Amongst individual homeowners, the extra space is often excessive or can be used for something else as these rooms are often large.
Due to these spaces often being large, they offer many opportunities to alter their use for something more preferable for the current and potential owner.
Partitioning the spare room to make way for another bedroom is often done for families who continuously experience guests.
Bachelors, Spinsters, and couples without children can often make this space into hobby rooms, gyms, art studios, music rooms or any other kind of preferred recreational room.
Bedrooms and lounges offer the most adaptability as they are hardly ever too specialized to restrict adaptability.
Like bedrooms, spare lounges can remain unused and unmaintained for long periods without the risk of large costs to keep them usable.
If left alone for a while, the most likely upkeep cost that will be incurred is cleaning.
4. home offices/Study.
What is it?
A room dedicated to the completion of work. Often outfitted with a desk, chairs, electrical ports for devices and shelves.
Home office spaces are becoming more desirable each year as individuals are moving closer to the “work from home” model due to the rise of the internet and simpler connectivity.
A home office fits the same adaptability criteria of a bedroom or lounge. A bedroom can be turned into an office with relative ease and an office into a bedroom.
This is the same case with and for most structure-based specialty rooms that only require a fixed space of moderate interchangeable size.
Structure-based specialty rooms don’t need the investment of special permanent designs or equipment.
As with most other structure dependant specialty rooms, offices only require basic maintenance that would at most be the equivalent of normal rooms; usually cleaning.
5. Staff quarters and or Cottage
What is it?
A separate usually smaller living structure detached from the home that is equipped with the minimum requirements for accommodation – bedroom, bathroom, kitchen area and occasionally an additional room.
Some of these can be far more extravagant than what I just described above but the general position of these specialty rooms is that they are an inferior living area to the main house.
In the age of Airbnb and renting out, these rooms are especially coveted for their opportunity to generate income.
Another avenue as to why these structures are desired is their practically; aside from potentially generating income. Some may opt to have these buildings as guest quarters for family, friends, staff, and acquaintances.
This type of property is usually kept (functionally) as is – a separate living area. It can be converted into other specialty rooms but more often than not if a property has this type of detached structure; it has enough space to accommodate most hobbies in the main property.
These structures are also often kept near the opposite side of the main home.
Depending on how the rooms of the structure are used, the structure may require more routine cleaning if it is used for business purposes such as for Airbnb.
Or it may be left alone or subject to independent maintenance from the current tenants – in the case of it acting as staff or tenant quarters.
Luxury Specialty Rooms
1. bar/wine cellar.
What is it?
A storage room for keeping wine bottles and barrels; the room is dependant on specific humidity and temperature controls to maintain the required environment for properly preserving and aging the wine.
You will come to find that most luxury specialty rooms learn far along the spectrum to being niche. A person who wants a wine cellar – knows they want a wine cellar.
Everyone else will be at best indifferent about its inclusion and at worst – not willing to pay a large premium for a room they can’t use easily for anything else.
What’s good for wine isn’t good for anything other than wine. Wine cellars are not the typical DIY rooms you can switch from being one thing to another.
From the ground up, the room would have been designed to operate optimally in providing the right conditions for the wine.
The temperature and humidity the room would naturally produce would make it unpleasant as any other room and would require a large investment to alter.
the largest running costs of the room once already built would be the electrical costs of running the required refrigeration and humidity systems. Large machines that (depending on how the structure was built) may have to be run day in and day out during specific seasons that shift the temperature from ideal levels.
2. safe/panic rooms.
What is it?
Specialist rooms to act as a safety bunker to protect the homeowner from harm in the case of natural disaster or home invasions.
A panic room accounts for one of the most luxurious specialty rooms for a home. This is not, by all means, a usual structure and is desired by a special niche.
Most people would not go out of their way to get a property with a panic room unless they have legitimate concerns regarding their safety in a case where the home itself does not provide adequate safety; consider high-value individuals such as celebrities or individuals living in a high crime or natural disaster area.
Panic rooms are on the low end of the spectrum when it comes to adaptability. These structures are made with the intent to keep someone in and everything else out.
An individual who purchases a property with a panic room would largely be forced to only see that room as a panic room or vault-like structure.
Panic rooms have ranging upkeep costs that are not common for most other rooms, these can include an independent power supply, food, communication equipment as well as contact to security service – to get the full potential out of the structure.
3. Home Theatres.
What is it?
This specialty room is dedicated to emulating the experience of being at a movie theatre from the comfort of your own home.
From seating to layout, to lighting, to projectors, etc; everything is done to emulate a movie house.
As with most luxury specialty rooms, home theatres are specifically for people who want home theatres. most people would be content to not have one and would not be eager to pay extra for a property that has one.
It would be difficult to adapt a home theatre into anything other than home theatre, the downward sloping design, padded walls, and projector setup would require expensive remodeling and renovations if the owner wanted something else out of the room
In terms of upkeep, home theatres are on the lower side of the cost spectrum. With the efficiency of most technology at the moment, it could even be argued to be a room that requires less energy than the average kitchen.
4. gyms/sports rooms.
What is it?
Areas dedicated to fitness through traditional workout equipment and or providing the dedicated pitch of a specific sport such as a basketball, tennis or squash court.
Home gyms are easier selling and value points for a property than dedicated sporting facilities. While gyms can offer a benefit to almost any type of individual, specialist sporting facilities will only be of long term value to the most dedicated athletes of that particular sport.
For other general individuals, the facility may be a nice activity to do here and there but the value for long term use may not justify the price.
Gyms can be seen as structure dependant specialty rooms and will often be easier to convert to something else. For average individuals, home gyms will often share space with other rooms such as a secondary lounge or the car garage.
On the other hand, specialty sporting facilities are near impossible to convert to anything else that isn’t a sporting facility of near-identical proportions.
Gyms depending on how focused they are on tech-based equipment such as rowing machines and treadmills or free weight equipment such as weights or bikes; will require minimum upkeep costs aside from electricity.
Sporting facilities will require some expensive periodic maintenance such as repainting and replacements as a result of wear and tear from the elements.
What is it?
These are heat rooms used for health and relaxation benefits through dry heat and relative humidity.
Though saunas can be admired by most people they are still largely only for people who will want a sauna and who wouldn’t mind all the upkeep costs of keeping the room in good condition.
A sauna is just a sauna and will only ever be a sauna. There is nothing else you can do to the room to tweak if for some other purpose without fundamentally remodeling the entire structure.
If the new owner doesn’t want the sauna, their only option is to completely remove it or leave it to wither away.
Saunas can come in many different forms. From wood burning to electrical, to steam and infrared saunas. Each will require a consistent source of fuel to use, such as wood, electricity and water and general maintenance.
Scoring Specialty Rooms (Table)
Utility Specialty room
Spare Lounge (out/indoor)
Luxury Specialty Rooms
By in large you can tell that utility specialty rooms have a value advantage.
In this scenario, “Value advantage” is focused on ability to drive the sale of a property – not necessarily to sell the property for more money.
On a whole; utility specialty room are almost necessities for a property and are more likely to give a home an edge over another.
By in large, individuals won’t by a property solely on the specialty rooms on offer but if a buyer is considering between 2 properties; the property with a more valuable offering of specialty rooms come out on top.