Does a New HVAC System Increase Your Home Value?
Make your home more attractive to potential buyers by replacing the HVAC system
Highlights
Buying a new HVAC system can increase your home’s value and make it more appealing to potential buyers.
A new HVAC can raise your home’s value by 5% to 7%.
Benefits of a new HVAC unit include energy efficiency, tax benefits, and a higher home appraisal.
A new HVAC unit costs anywhere from $5,000 to $10,000.
If you’re on the fence about replacing your home’s heating and cooling system, you’re likely wondering whether installing a new HVAC system will increase your home value. If you live in an older home or your current HVAC system is on the outs, a new system can help heat and cool your home more efficiently and boost your home’s value. Let’s review how a new HVAC system affects your home’s value, and when to hire an AC installer to get started.
Will Installing a New HVAC System Increase Home Value?
Yes, installing a new HVAC system can increase your home value by 5% to 7% with a return on investment (ROI) of about 30%. This projected increase is especially true if you replace your current setup with an energy-efficient system, providing additional benefits to future buyers in the long run. Potential home buyers will view a new system as a money saver on electricity bills and lower maintenance costs for at least 10 to 15 years. Consult a local AC installer about the best time to replace your HVAC system before selling your home.
How a New HVAC System Increases Home Value
A new HVAC system will boost your home’s appeal and value to potential buyers in a few important ways.
Energy Efficiency
New HVAC systems are more energy-efficient than older models, leading to major savings on your monthly energy bills. Reduced costs over time equal more money in your (or future homeowners’) pockets for other home improvements. Plus, potential home buyers may appreciate that your HVAC system has a lesser environmental impact than older, outdated models.
Tax Benefits
Investing in a new HVAC system means extra rebates, plus potential tax deductions of up to 10% of the installed costs. While potential home buyers won’t get to share in the rebate payments, you can appreciate the tax benefit that can offset the cost of installing a new HVAC system.
Higher Home Appraisal
When selling your house, a home appraisal by a professional determines what your home is worth and what potential buyers should pay for it. A professional home appraiser will likely consider your property worth more if its systems are updated with the newest appliances, such as a new HVAC unit. Since HVAC units are big-ticket investments, appraisers will highlight a recent installation in their appraisal.
What Kind of ROI Can I Get on My HVAC Investment When I Sell My Home?
The ROI on a HVAC system investment depends on how much value it adds and how much you paid for it. For example, if you spent $10,000 on HVAC upgrades before selling your home, and it adds about $2,500 to $3,000 to the sale price of your home, your ROI will be 25 to 30%. You are less likely to see a full return on your investment right away unless it’s a seller’s market, and demand for your home drives the price and value of a new HVAC up significantly.
How Much Does It Cost to Install a New HVAC System?
A new HVAC system costs anywhere from $5,000 to $12,500, depending on where you live, its size and age, and the brand. The type of HVAC system will also impact the cost, from duct-free to hybrid. The average price for a new system is $7,000 for materials and $1,500 for labor. There may be additional costs for additional tasks, including adding zones, installing a new thermostat, and including humidity controls.
Signs You Need a New HVAC System
Since most HVAC systems last about 10 to 30 years, older appliances will start to break down over time. Here are some signs to watch out for that may indicate you need a new HVAC system:
Heating:
Uneven heating
Decreased efficiency
Pilot light comes on
Evidence of rust, corrosion, or cracks
Higher levels of carbon monoxide
Cooling:
Refrigerant leaks
Inconsistent cooling
High humidity levels
Requires frequent repairs
Hissing sounds
Higher energy bills
One or more of the signs listed above could mean it’s time to look into purchasing a new HVAC system. If you’re unsure which type to buy, you can hire an air conditioner installer near you to inspect your current system and recommend a replacement.
Frequently Asked Questions
A new HVAC unit typically adds about $2,500 to $3,000 to the value of your home or about 5% to 7% of your home’s value. Since a new unit can cost up to or more than $10,000 to install, it’s up to you to decide if the upfront cost is worth the added value. Consult a local AC installer to determine next steps.
It depends on the individual policy of the HVAC contractor or company you hire for the quote. Some installers may negotiate the terms of your contract, such as how many years you want to pay off a loan or the percentage of your APR. You may also be able to provide comparing quotes to get the overall price down.