Increasing Your Property Value Through HVAC Upgrades

Whether you are getting ready to list your home soon or just expecting to sell sometime in the future, you may hope to raise your property’s value through renovations.

If your primary goal is to get more money when you sell, though, you may find yourself disappointed. Aesthetic renovations in particular risk turning off certain buyers even as they appeal to others.

That’s why your money may be better spent on improving the home’s core systems — improvements that will benefit any future owner.

Among the top projects with a high return on investment is hiring heating and cooling companies to determine if your HVAC (heating, ventilation and air conditioning) system needs repair or complete replacement. A brand-new air conditioner or a smoothly functioning furnace will make your home more valuable to any buyer.

1. Do property appraisers consider HVAC?

Property appraisers check various home features before concluding their appraisal reports. As for the HVAC, they will check the heating and cooling system and make sure it is functional. An improperly functioning heating and cooling system negatively affects the appraisal value.

While the appraiser won’t inspect the individual components — such as the furnace, ducts, vents and filters — in detail, the inspector will. And since the HVAC system is a major expense, would-be buyers might back out if they don’t like the results.

Before listing your property, then, you’ll need to decide if you’re better off replacing or repairing some or all of your HVAC system.

2. How much does a new HVAC system increase property value?

If you install a new heating and cooling system, some companies say you can expect to recoup between 35% and 50% of your investment in the form of increased value when you sell the home.

That means you shouldn’t replace a working HVAC system just to increase your sale price. On the other hand, if the HVAC system is broken, it will make it hard to attract potential buyers and better offers.

While potential buyers may not notice a new unit, they’ll easily pick a worn-out or improperly functioning furnace or air conditioner — at least once the inspection is complete.

One factor in deciding whether to install a new HVAC system is determining whether you will get some of your money back when you sell the home. Below are a few questions that can help you determine if the new installation will increase property value:

1. Does your property’s location require air conditioning? A new HVAC unit might not add much value if your house is in a place that doesn’t require conditioning, even during summer. At the same time, as temperatures increase worldwide, more buyers may consider air conditioning to be a requirement.
2. How old is the current HVAC unit? If the furnace and air conditioner are more than 15 years old, replacing individual parts such as ductwork won’t add much life to the system. Consult with an expert and consider installing a new system.
3. Does the existing HVAC work perfectly? If it does, you won’t see much return on investment if you upgrade it.

If you decide to install a new system, work with a trusted heating and cooling company to choose an HVAC unit that will function well and add property value. Here are some factors to consider in choosing a new unit:

1. Choose a model with high energy-efficiency ratings — look for the Energy Star designation. HVAC units that are energy-efficient are also cost-saving and reduce your carbon footprint, making them attractive to potential homebuyers.
2. Size the unit appropriately. A system that is too small won’t meet your property’s heating and cooling needs. The system may struggle to achieve the desired temperature. On the other hand, an extra-large unit will take up a lot of space and cost more than necessary.
3. Go green. There is an increasing demand for green homes, and installing an HVAC unit with eco-friendly components is attractive to buyers. Once such option is a heat pump. According to recent studies, installing heat pumps increases property value by 7%.

3. Should you replace the HVAC system before selling the house?

You should consider a couple of factors to determine whether you should replace HVAC components before listing your home.

1. Is the unit outdated? Old, outdated units are less efficient. A heating and cooling system older than 20 years is unattractive to potential buyers. Such systems can be costly to maintain. Even if the system still functions perfectly, potential buyers will anticipate the need to replace its components sooner rather than later.
2. Is the cost of repairing more than the cost of installing a new system? To figure this out, you’ll have to take into account the potential future costs of repairs. Here’s a quick shortcut: multiply the age of the unit by the approximate repair cost. If the result exceeds $5,000, consider replacing the unit.

4. Increasing Property Value Through HVAC Maintenance, Repairs and Upgrades

Installing a new system or replacing various components is expensive, but with proper maintenance and repairs you may not need to pay for replacement before you sell the home. Below are a few repair tips to increase property value without replacing the entire unit.

1. Ensure all HVAC components function property, and have parts replaced as necessary to make sure the unit is fully operational.
2. Check often-overlooked components. An expert can inspect your pipes, ductwork and vents to make sure they are functioning optimally.
3. Schedule professional maintenance before listing your home. Potential buyers will be reassured to know that you have maintained the systems that will be included in the home sale.
4. Add extra features, such as a smart thermostat, a zoning system, an upgraded air filtration system, an energy recovery ventilator or a central dehumidifier. These features not only improve functionality but increase your property value.
5. Upgrade just the heating component. If you live in a climate that rarely gets hot, buyers will likely give less consideration to an aging cooling system.
6. Add a cooling component if you don’t have one. You may be able to avoid installing a whole new system by adding a cooling function to your forced-air heating system. It can use the existing system’s ductwork, saving you money.

Conclusion

If your HVAC system is aging or malfunctioning and you plan to sell soon, you have options. Some repairs, basic maintenance or minor upgrades may be all you need to ensure that potential buyers feel comfortable with the home’s heating and cooling functions. On the other hand, a faulty HVAC system can be a major problem for buyers.

A professional can help you determine whether the system must be replaced. If you do need to install a new system, you can expect your property value to increase, helping you to recoup some of the costs you put into the replacement.