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Value: What’s your project worth?


A concept that is both prevalent and relevant, especially due to the current economic conditions, is the idea of value. The concept of value is applicable to how we spend our money, and the perceived worth of what we receive in return. It is especially important when it comes time to decide on whether to pursue a design project. Design is very subjective, so it makes it quite difficult to determine the value of a design project. Even if a project is deemed necessary and makes good economic sense, how does one make a value judgement concerning the most detailed decisions? Something as (seemingly) insignificant as choosing between a fluorescent light bulb and an LED bulb can all be traced back to the initial value proposition: is this product, service, event, decision, etc. valuable?

We all want to get the most bang for our buck, and stretch our money as far as it will go. Recently, Todd Vendituoli wrote a post concerning the way houses have often been treated solely as financial assets instead of homes for nurturing our lives. This often leads to an over-simplification of how we evaluate a design project’s value. In order to properly analyze a decision to build, remodel, hire a designer or spend the extra money for granite instead of laminate, one must fully understand the concept of value.

Value has many facets, but two important concepts are Return on Investment (ROI) and Utility. To explain these concepts, I’ve asked my husband, David, to detail them in layman’s terms. David received his bachelors degrees in economics and finance and his masters of science in finance. He currently works as a portfolio manager assistant. I thought he’d be better qualified than me to explain these concepts.

Return on Investment (ROI) is a simple concept that can be used to gauge an investment.  If I was to spend $20,000 renovating my kitchen, and an appraiser valued the work at $40,000, my ROI would be 100%.  This is pretty simple; however, concepts begin to get muddy when you introduce “utility”.  At the risk of oversimplifying, utility is economic jargon for the value of happiness.  ROI fails to capture this aspect of economic value that can be critical when it comes to something as personal and every day as your home.

Let us analyze two situations.  In both of these scenarios you will be renovating your home.  The goal is to realize some ROI on the eventual sale of your house.  The operative word is “eventual” since you will be living with these updates for some time.  For these renovations, let us say that you will spend $20,000.  Scenario A, your goal is to maximize your ROI at 100% ($40,000 of end value).  To do this, you’ll need to create the most appealing renovation to the general populous: granite counters, builder beige walls, white trim, hardwood floors, etc.  Scenario B, your goal is to balance ROI and your tastes with ROI at 80% ($36,000 of end value): Quartz countertops, plush carpets, modern finishes.  At first glance, one may choose Scenario A.  But, we have failed to capture the utility generated by the renovations from the homeowner’s perspective, i.e. the enjoyment you will get out of selecting finishes you love compared to finishes you ‘settle for’ for the sake of broad resale appeal. Let us say that scenario A creates utility equivalent of $5,000, while scenario B – which better suites your tastes – generates $15,000 in utility. Essentially, scenario B makes you three times happier than scenario A.  At this point, it makes more sense economically to go with the personalized renovation using finishes you love. It creates a total value of $51,000 (Compared to the $45,000 alternative).  Value is still being generated, even though it isn’t money in your pocket.

These concepts may seem intuitive and even overly simplistic.  It makes sense that one would want to be happy with a renovation that they must live in.  However, it’s far too easy to bypass the value of one’s enjoyment since it’s not “hard cash”.  You must ask yourself though, what’s the point of the hard cash?  Most likely, the end goal is to spend it on something that makes you happy (vacations, dream home, philanthropy).  Few people have the goal to die with a lot of cash and never spend it.  By maximizing our utility AND ROI, we maximize our utility and overall quality of life.

Now that we see the difference between ROI and Utility, we can read between the lines and understand that everyone simply wants value added to their projects. Whether they are building an office tower, designing a master-planned community, or remodeling an outdated kitchen, everyone wants their project to have value – from the overall form to the last nut and bolt. There are many ways to add value to a project that may not always be apparent.

Hire a Design Professional
Hiring an architect or residential designer can add value to your home in multiple ways. Not only are architects trained to evaluate multiple value propositions simultaneously throughout the design process, but the end result can be appraised at a higher dollar amount and often sell faster than comparable structures. In addition to monetary gain and a shorter sales timeline, a custom designed home will bring a higher utility since it will be exactly what you need and want. Imagine that all of the frustrating aspects of your current home were adjusted to your tastes – isn’t that something that is valuable? Hiring a design professional adds many facets of value to your project. To find out how to choose the right designer, read this recent article.

Add a Unique Feature
Another way to add value is by incorporating a unique feature in a standard design. Green features and systems, special design elements, unusual finishes, or amazing vistas can all add value to a project. All homes will have the basics: gathering space, cooking and eating space, and sleeping space; however, adding unique spaces to a home through renovation can be a way to add value. Spaces like sun rooms, landscaped outdoor areas, or flexible multi-purpose spaces can be the feature that sets your home apart from the rest. Whatever you add, be sure that it is appropriate and that it maintains the integrity of the overall design.

Strive for Quality
By using only the best materials, products, and professionals for your job, you can ensure a higher value for your project. Everyone knows cheap materials won’t bring a premium when it comes time to sell, and may even cost more money in the long run due to maintenance or poor installation issues. It is always important to balance high quality with monetary cost while being mindful of whether the selections contribute to the project’s integrity. For example, while hardwood floors may be a premium product, adding them to a renovation in a neighborhood where linoleum and carpet are more common could result in less value added than if an engineered or laminate floor was selected.

Create Multi-Purpose Spaces
Another way to create value in a project is to designate multiple activities for a single space. By adding an element of flexibility, you can create a wider market appeal. Think of it as diversifying an asset by exposing it to multiple purposes. If you provide a space that can double as both an office and guest room, future buyers will have options as to how they use the space. A dual functioning room can also save you future time, effort and money when your own needs and desires change. By allowing a design to serve multiple purposes, you are embedding flexibility into your future, and that can equate to savings. Another cost saving measure can be found by decorating with furnishings rather than semi-permanent finishes. Decorating your home with colorful paintings, textiles and objects is much easier and cheaper to change than floors, cabinets or walls. Avoiding costly renovations in the future definitely adds value to a project.

Remember that while any one of these suggestions can add value, they should not be considered in isolation. The best materials can be poorly installed, or used in an illogical design that detracts from a project’s value. It is always important to consider each of these elements and how they relate to one another. For this reason, your project will get the most value from hiring a design professional who will be able to recognize and address these factors from start to finish. Consider bringing on a design professional for consultation on your next project to see how they can add value to your design.


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Choosing the Right Design Professional


Choosing a design professional for your project can be a daunting task. There are plenty of articles which detail the practical steps of choosing a designer: review their portfolio, interview them, and ask for references to verify their skills. These are all great places to start, but these practical steps alone can’t help you decide between multiple well qualified prospects. By using the criteria below, you can evaluate each designer more thoroughly and choose the best match for your job.

Knowledge is essential to every job. Knowing the practical steps to carry a project from inception to completion is the key to success. To distinguish between several design professionals, first determine what type of knowledge is needed for your job:
  • Specialist knowledge: extremely technical or unusual projects will require a designer that has specialized knowledge and skill sets. If you have an obscure or unconventional project, discuss the specific skills and experience that each designer can offer to navigate through your complex job.
  • Book knowledge: an average project may just need the very basic ‘book knowledge’ to get the job done. If you care more about the project getting completed in a standardized way than having a unique or unusual solution, then you can opt for a designer who knows their basics well. There is no need to tap a designer that caters to eccentricity and opulence if all you require is something simple.
  • Experience knowledge: some clients are willing to give young designers a chance to prove themselves, while others prefer to stick with a designer who has encountered their situation many times over. If you tend to be risk averse, look for a designer who has many years of experience to ease your concerns. If, on the other hand, you enjoy the idea of working with the latest up and coming designer, then don’t be afraid to work with a relatively new professional. A potential perk of using a lesser known designer is that they are often willing to negotiate on prices while they establish a name for themselves. In the end, you as the client need to be comfortable with the designer’s level of experience.

Creative vision is a quality that some designers have, and others may lack. Once you have determined the type of knowledge necessary for your project, it will help guide you towards the professional you need: a highly creative individual or someone who is very familiar with the basics. For standard, typical projects, a designer with basic skills is perfect. If you desire a unique solution to a challenging design problem, be sure to invest in a professional that demonstrates a high level of creativity. Review the portfolio of each designer and ask them how they approach challenging obstacles during design and implementation. Learning about their design process will give insight to their creativity. Notice whether the designer arrives at a unique conclusion for each project challenge, or if many projects look alike in their design results.

Communication is essential in good relationships. Remember that when you hire a design professional, you are paying them for their services – not just a final product. You will likely form a long term relationship with this professional, so be sure that their communication skills won’t leave you frustrated during the course of the job. Frequency, availability and clarity are all necessities for good communication. A good designer will understand your needs and desires and be able to articulate them verbally or visually in a concise way. The best designer will understand not only your project, but you as a person, allowing them to anticipate unspoken needs. Remember, communication should be both efficient and effective.

Flexibility and firmness may seem contradictory, but they can actually work in synergy with one another. A certain level of trust is needed between a client and design professional, so that the designer is allowed to make decisions with the client’s best interest in mind. A good designer will be firm in their recommendations for products, methods and concepts. They are well equipped with the knowledge and creative vision to make informed and educated decisions on your behalf. Look for a designer that you can trust: one that is confident and firm in their convictions. While firmness is an admirable quality necessary to getting a job done, be sure that your prospective designer can balance their intuitions with client values. A good designer will listen respectfully to a client’s needs and wishes, and will carefully incorporate them into their solutions. The best designer will be able to maintain their concept and convictions while accommodating your requests. They’ll be flexible in allowing your vision to shine through their expertise. Look for a designer who can make your vision a reality with both firmness and flexibility.

As you decide which design professional to hire for your upcoming project, keep in mind that personality is only one part of the equation. While sharing a few jokes with the designer can be fun, your primary concern should be whether this person is capable of seeing your project through from beginning to end; you’re paying for a service and end result, not a friendship. Another possibility is hiring a team of professionals to implement your vision. Selecting two or three design professionals that each cater to specific project goals can be a way to utilize the best talents of each person simultaneously. Talk to your prospects about the idea of working within a larger team to accomplish your goals. At the end of the day, the designer you choose should be the person you are most confident in and comfortable with.

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