Last week I wrote something crazy: Your home is not your greatest asset.

I’ll define my term…I mean…asset noun 1. something used to create future economic value.

Your home can be an asset like “My moustache is my greatest asset,” but not an asset like “Look at all the assets in my portfolio.”

When evaluating a stock, or bond, or even piece of investment property, there is really only one important question: “What is my return on investment considering the risk?” That’s it. There may be lots of factors, but a good investor always comes back to that question.

This is the big question homeowners usually ask of their personal residence as well. However, as Mr. Miyagi says, “You will only find right answer by asking right question.” (I don’t know if Mr. Miyagi would actually say that, but anything sounds smarter if you have an old kung fu master say it).

So, let me present three questions that I think are righter (yes, that is a word, starting now) than “What is my return on investment?” when you are buying, improving or living in your home.

• Will this improve our daily lives? A home can absolutely do this. You should know by now that is my soapbox. We are changed by the spaces we inhabit. If you have ever lived in the wrong house, you know what I’m talking about. Home buyers are often criticized for their emotional approach, but I don’t think it should be glossed over. Check the comps, have the checklist of wants and needs for sure, but at the end of the day, you will have a relationship in and with your house that is intimate. If you don’t, something is wrong.
• How will this affect my lifetime costs? This seems similar to the ROI question, but I want to make a critical distinction. Just like big companies that sometimes make poor long-term decisions in order to make their shareholders happy today, we homeowners frequently don’t look past the next 5 years in our equations. I think this might be a mistake. For example, the 2 percent rule (experts suggest a homeowner should plan on spending an average of 2 percent of the value of their home in annual maintenance, which may be spending nothing this year, but then painting the exterior next year, but averaging 2 percent over time) is frequently not factored into a family budget. This can lead to decisions that will actually increase home expenses over time, which doesn’t help anyone but me–your friendly neighborhood contractor.
• Does this line up with our values? I think the owners of both homes we are featuring in the NARI Remodeled Homes Tour next weekend did a great job answering this question. They decided that they didn’t want to move out of their neighborhoods, but wanted to love their houses. The two homes were both extensively remodeled/expanded, but they look and function very differently than each other–in ways that line up with the values of the owners. Questions like: who do we want to “do life” with? what do we enjoy doing? when and where do we relax? how do we engage with others? If you look, you can actually see the answers to those questions play out in the homes.

Viewing your home as a cost of living doesn’t mean you don’t buy a house. I would be a hypocrite if I said that. It doesn’t mean you should spend less on your house (or more for that matter.) Only that you should spend differently. And ask different questions?