Harvard’s Joint Center for Housing Studies recently found through their research data that Americans are increasingly spending large amounts of money on remodeling their homes and seeing less and less in returns. They claim that over the course of the year nationwide on average homeowners will spend a total of $340 billion on their home renovations but on average only see a mere 7.5% increase in their home’s price from the previous year. If that’s not worrisome enough, Remodeling Magazine also recently put out a survey showing that the average 12% return on investment (ROI) had decreased to less than 6% on average.
Why is this happening? Part of it is due to the vast economic changes that occurred in 2020 from the pandemic, but the other part is due to the actual home renovations being made. As appealing as new countertops or a fresh kitchen backsplash might be, if a home has an older HVAC unit or isn’t properly heated and cooled, then it will simply not sell. If you want to increase your home’s value and get a guaranteed ROI, updating your HVAC systems is one of the most surefire ways to do it. So, we thought we would show why it is important to invest in your home’s HVAC system. And we’ve posed four questions below about your home’s heating and cooling system that you should consider answering before spending thousands of dollars on another renovation which may not give you the ROI you were hoping.
Why You Should Invest in Your Home’s HVAC System
Let’s say that you are out on the hunt for a new home. Your real estate agent takes you to a place that looks perfect for you. They tell you it’s been recently updated, the neighborhood is safe and quiet, and it’s even right down the road from where you work. Then you go inside. It’s unbearably hot. That’s when you figure out that your potential new home has an old HVAC system that is prone to breaking down occasionally. You want to stay and look around at all the updates that have been made to the home but instead you rush through and leave as soon as you can to go cool down in your car. Those home sellers just lost a perfect potential buyer even though all their renovations have added a great deal of value to their home.
The truth of the matter is this: it’s hard to spot a new HVAC system, but it’s clear when the unit is old or broken down. Not to mention, no one is going to look at a home that lacks basic heating and cooling abilities—no matter how nice those new appliances are—and we’re not the only ones who think so. In one of their more recent reports, The National Association of Realtors states that HVAC remodels have a higher range of ROI than most other types of remodeling, yielding a return of up to 71% of the original investment.
Now that we’ve looked at why updating your HVAC unit is so important and the potential ROI you could make from it, it’s time to consider these four questions before you go about updating your HVAC systems so that you can make the most bang for your buck.
Question 1: Is Your HVAC System Still Working Well?
This may seem obvious, but there are still a lot of people out there who will try to upgrade their HVAC units even if there is nothing wrong with their current heating and cooling system. If your unit is 1 to 10 years old and functioning properly, then it’s not worth upgrading and will only be another faulty remodeling–no better than the new counter tops or appliances in the previous scenario. However, if your unit is 15 years or older, then you may want to look into updating your unit. HVAC systems this old tend to have dated technology and leave potential home buyers worried about having to replace the system soon after move in.
Some other important things to consider when deciding how you want to update your HVAC unit are knowing which upgrades are the best for the kind of house that you have and the kind of people you are intending to sell the house to, according to the National Association of Home Builders.
You should also consider the geographic region, age, and size of your home as well as your budget and the layout of your property.
Question 2: Can You Make an HVAC Repair Rather Than a Replacement?
Most units that are 10 years and younger usually just require a few simple repairs. However, there are some instances where even younger HVAC systems might need some costly updates.
To figure out if the upgrades are worth it, multiply the age of your existing unit by the cost of the repair you’re looking to make. If the total is more than $5,000, then replacing the HVAC system is more cost-effective at this point than just repairing it.
Question 3: Is Your Home Located in a Climate that Requires Heating and Cooling?
Remember earlier when we said you should also consider the geographic region, age, and size of your home when deciding what updates to make on your HVAC unit? This is why! Upgrading your HVAC system in a geographical location that doesn’t need air conditioning or heating will not add value to your home if the climate is temperate. For example, if you lived in somewhere like San Diego, California, where the highs are usually in the 70s, then you wouldn’t necessarily need to add a new air conditioning unit to the house.
However, there are still some updates that you can make that will add value to your home, depending on the geographic location. For instance, if you live somewhere warmer and sunny like Florida, then adding a solar heating system to your house might not be a bad idea since you will likely have a constant source of energy to power it. Or if you live in a desert climate like Arizona or New Mexico, then investing in a geothermal heat pump works well for a similar reason: it’s always warm and arid in these regions.
You see, the trick is finding the right upgrade for your home’s geographic climate and using it to your advantage to add value to your home and help you save your money. This idea segues perfectly into our next question.
Question 4: Do You Currently Have Energy-Efficient HVAC Units?
According to energy.gov, energy-efficient homes see a 5%-8% higher selling value compared to other homes without energy-efficient HVAC systems and appliances. As you can see, efficiency labeled homes are increasing in preference and popularity among new home buyers now and for good reason. Not only are they better for the environment since the HVAC systems will use exactly how much energy they will need, but they are also kinder on your utility bills, too, since you are not paying for anything extra that you don’t use. Therefore, upgrading to energy-efficient HVAC appliances is one of the smartest moves you can make to stand out in today’s competitive housing market. This is an especially useful feature for homes that are bigger, smaller, or older since these types of houses tend to have the hardest time with minimizing their energy use.
Let City Heating & Air Help You Upgrade Your HVAC Systems
City Heating & Air Conditioning has been offering reliable home HVAC repair and installation services for over 50 years around the East Tennessee area. Our staff works with honesty and integrity at the core of everything they do, so you can trust that we will be able to give you an honest quote and help you take care of all your HVAC needs with our monthly inspections and emergency services. So, if you are looking to update your heating and cooling systems and raise the ROI on your home repairs, call City Heating & Air Conditioning to get a consultation and help you get the job done. Visit our website for a quote today or call us at 865-938-1005.