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Does Replacing Your HVAC Add Value to Your Home?

by Carrie / January 17, 2023

If you plan to sell your home within the next five years, you need to consider which renovations will increase your home’s value. Besides enhanced curb appeal and increased square footage, HVAC replacement is at the top of the list of home improvements that can appeal to potential buyers. 

Of course, there are factors to consider before making an HVAC investment. Do you need to replace your system? Will repairs and upgrades increase your home value, and by how much? How do you know which HVAC system is best for your home? Not all heating and cooling systems need to be replaced. There are some scenarios where the expense of this particular home improvement could outweigh the potential benefits. So, compare the condition of your HVAC system to the points below to determine if replacement makes sense for your home’s long-term value.

How Do You Know if You Should Replace Your Heating and Cooling System?

Your Heating and Cooling System Is Over Ten Years Old

Like any machine, heating and cooling systems experience wear and tear over time. This can lead to reduced efficiency and effectiveness. Eventually, the system may break down or stop working altogether. In addition, older furnaces or heat pumps may not be as energy efficient as newer models, which can lead to higher energy bills.  

The type of system, regular maintenance, and the local climate can affect heating system performance for better or worse. As your appliance ages, it may be more prone to malfunction or failure, which can be a safety hazard. In general, it is a good idea to consider replacing a heating and cooling system after about ten years, particularly if it is experiencing problems or if it is not as energy efficient as it could be.

On most units, a metal nameplate is attached in a visible location on the back side of the unit cabinet. This is where you should be able to find the date that your unit was manufactured. If your system is ten years old or more, it’s an appropriate time to replace it as it’s nearing the end of its useful life.

Your Heater, Air Conditioner, or Furnace Is Noisy

Irregular noises are another clear sign that your home could benefit from an HVAC upgrade. If you hear loud humming, squealing, or banging sounds when you turn on your heater or air conditioner, this is a sign of a problem that needs to be addressed. However, the noise could be caused by something simple like a loose belt or a build-up of debris, which only involves an easy repair. 

On the other hand, if the noise comes from a vital system component malfunction, such as the blower motor or the burners, replacing the entire HVAC system may be more cost-effective than trying to repair it. It is always a good idea to have an HVAC professional assess any problems with your heating and cooling system to determine the best course of action. Contact our NATE-certified technicians to diagnose the problem and recommend the most appropriate repair or replacement option.

Your System Does Not Achieve 80% or Higher Efficiency

You might think that it’s difficult to determine your heating and cooling system’s efficiency level, but that data point should be printed on your unit. Look for the letters “AFUE” with a number and a % symbol. AFUE stands for annual fuel utilization efficiency and tells you how efficient your system is designed to be. 

Today, standard furnace performance is 80% AFUE and up. So, if your unit shows a number lower than this, you could definitely benefit by upgrading your heating and cooling system to one that will save you (and any future homebuyer) energy usage and cost. 

Do HVAC Repairs or Upgrades Increase the Value of Your Home?

Now, if there’s no need to replace your entire system, then cleaning, repairs, and component upgrades can also add value to your home. Most systems should be cleaned annually at the very least. While you can clean out the system yourself, this is best done by a professional. Regular maintenance ensures that your HVAC system doesn’t experience major breakdowns and is more enticing to potential home buyers since maintenance is up to date.

How Much Does a New HVAC System Add to a Home's Value?

On average, an HVAC system replacement has an ROI of 35-50%. The average HVAC replacement costs between $5k to $10k and, according to Angi, can increase your home’s sale value by 5-7%. Note that both HVAC replacement costs and home values correlate with a property’s square footage.

Moreover, according to the US Department of Energy, “even if your air conditioner is only 10 years old, you may save 20% to 40% of your cooling energy costs by replacing it with a newer, more efficient model.” So, even if you’re not selling right away, the investment can pay for itself over time. 

Do Potential Home Buyers Care About HVAC?

Especially in areas like Denver, where the weather fluctuates throughout the year, it is crucial for people to have heat during snowy months and AC on 100-degree summer days. So, yes, home buyers absolutely care about HVAC, and they definitely notice if the home’s heating and cooling aren’t working properly. 

Keep in mind that even if you don’t project that you’ll recoup every penny of your HVAC replacement expenses, homes with newer heating and cooling systems are desirable and likely to sell faster. For one, they’re more comfortable. Plus, they lower energy bills, which is an incentive for many home buyers.

How Do I Know What Heating and Cooling System to Buy?

First and foremost, your system needs to be efficient. We’ve already stated that you want your AFUE at 80% or higher, so buying new is a must. Next, the system must be properly fitted to prevent energy waste. 

Fitting a heating and cooling system consists of “Manual J” (load calculation), “Manual S” (equipment selection), and “Manual D” (duct design), which is referred to as JSD. Because the process is pretty complex, the best way to determine the right system for your home is to consult an HVAC professional. At Ultimate Heating & Cooling, we have an in-house engineer who performs the manual JSD process, which ensures that our customers have the most suitable and efficient system every time. Always consult an expert that operates under the standards and protocol developed by Air Conditioning Contractors of America (ACCA). 

Prepare for Replacement

If your heating and cooling system is over ten years old, it’s noisy, or your energy efficiency is low, it could be time for an HVAC replacement. Even a cleaning, repair, or component upgrade can increase value for potential homebuyers since temperature control is an essential feature for residential purchases. A professional HVAC consultation can help you ensure that you’re getting the right system for your needs.     

Learn more about getting an HVAC home inspection or contact us for a customized recommendation!

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Download this calendar so you know how to keep your HVAC system running optimally year-round.