Many property owners view game rooms as an investment. Spending tens of thousands of dollars on an entertainment space feels justified when you can recoup your initial expense over time and eventually turn a profit when you rent out or sell your house.
Is a game room truly the asset you think it is? Learn more about this amenity’s return potential.
Homebuyers Put a Premium on Escapism
Retreat spaces — a category under which game rooms fall — are becoming more popular. More people want every day to feel like a getaway. They’re willing to pay extra to enjoy features commonly associated with vacation properties where they primarily reside.
Listed homes with amenities allowing owners to disconnect and unwind sell for 1.7% to 2.2% more and spend less time on the market. This range of price premiums isn’t significant, but the perceived value of retreat spaces may skyrocket once more millennial and Gen Z homebuyers enter the housing market.
Gaming is generational. The younger the generation, the higher the number of gamers. About three-quarters of Gen Z individuals will become digital gamers by 2027. This generation has a strong affinity for vintage items, so many of them may value classic arcade games even if these machines heavily rely on analog components.
This trend suggests that game rooms will be a big draw for future homebuyers. These spaces can entertain families that love to socialize and individuals who yearn for quality time alone. Notably, not just any room will suffice for a proper game room. They need ample space for storage, movable gaming equipment and furniture, as well as enough clearance for comfortable maneuverability and creative play.
Livable Spaces Boost Appraised Value
Appraisers put more weight on livable square footage when valuing properties for resale or mortgage refinance. Converting your unfinished basement or attic into a fully furnished game room will raise your home’s appraised value.
In other words, turning an underutilized room into an entertainment area is a surefire way to build equity in your home. It’s the representation of your property’s worth that lenders care about.
Borrowing against your property lets you cash out on some of this equity immediately. However, this deal is net positive only if you negotiate for more favorable terms and use the funds to acquire more income-generating assets.
Airbnb Hosts Use Entertainment to Charge More
Entertainment is one of the amenities that significantly contributes to the guest experience, allowing Airbnb hosts to justify higher nightly rates.
Many choose Airbnb homes over hotels for transient renting to save money, especially for large groups. Booking an Airbnb that can fit two adults at most is costlier than a hotel room with the same capacity in the same city.
Larger Airbnbs offer more value for money because more guests can split the nightly rate. The median price per head of an Airbnb that can sleep up to six adults is $60 per night, whereas a nearby hotel room for two costs each guest $89 per night.
If you want to invest in a game room to fetch higher Airbnb rates, this strategy will be more feasible when you can host a large number of people per night.
The Resale Values of Collectibles Are Unpredictable
Game room essentials — such as pool tables, trading cards and vintage arcades — can appreciate over time. Collectibles can be stores of value and inflation hedges, selling for more than you bought them for.
However, outfitting your game room with collectibles may not boost your net worth. Predicting their future market values is tricky.
Authenticity, rarity and condition are evergreen factors in judging the worth of collectible goods. However, e-commerce has made them more accessible and less scarce. Discretionary incomes and generational interests influence the increase and decrease of collecting markets.
Owning collectibles involves various costs. Maintenance can be costly because few technicians have the skills to keep antique goods in good shape. Replacement components can be challenging to procure. If you can no longer source original parts for your broken items, they become less authentic and less valuable in the eyes of some collectors.
Insurance is another recurring expense to think about. While your homeowners insurance may financially protect you if something happens to your collectibles, you may need to buy a separate policy to sufficiently cover them.
Overcustomization Can Backfire
Overcustomization can make your game room less appealing to others. Your personal taste can be a deal-breaker since everyone has unique preferences.
Designing your game room to charm a broader range of potential buyers is a safer bet. Decorating your space with easy-to-modify features empowers others to alter its aesthetics with less disruption.
Invest in a Game Room Using the Right Strategy
A game room is a desirable feature, but its ability to boost your property’s value depends on various factors. Have realistic expectations and play your cards right to get an excellent return.
