How Your Air Conditioning System Affects Home Value

Posted On Monday, 08 August 2022 20:17

Air conditioners (AC) consume 6% of the total power generated in the United States (U.S.), reaching an estimated bill of USD$29 billion annually. In addition, 75% of U.S. homes have this cooling appliance in their living spaces, according to the Energy Department.

From these figures alone, one could surmise that an air conditioning system is essential in most homes. As a vital home appliance, ACs are subject to deterioration over time. Industry estimates reveal that an air conditioner lasts 10 to 15 years with proper maintenance and use. 

Because of the costs attached to AC services, property owners and buyers may use it as leverage when selling or buying a home, respectively. But how does an air conditioning system impact your property’s price? Read on for the discussion. 

How much does an AC installation cost? 

The cost of AC installation can vary wildly, depending on your location, your home’s size and layout, and the price of the unit you want to be installed. An estimated cost for complete replacement is between USD$5,000 to USD$12,000. Meanwhile, on average, new heating, ventilation, and air conditioning (HVAC) systems cost anywhere from USD$1,500 to USD$12,500. 

The relationship between your home and your AC system 

A well-functioning AC system provides comfort for you and your family. This appliance can help reduce humidity and, with its filters, may reduce the incidence of asthma attacks and other respiratory issues. Besides these advantages, your cooling system can impact your property price in different ways you’ve never thought of.    

  • A sound AC system can increase property value 

Air conditioning and HVAC installation require substantial expenditure. But how much return on investment can you expect? Installing an excellent cooling system can increase property value from 5% – 7%. That’s excluding the potential reductions from tax rebates and other deductions. 

Many factors influence the disparity in ROI. An air conditioning system is a must for buyers with children and in locations where the summer seasons can be scorching hot. These buyers are more willing to pay premium prices for properties with such amenities. Additionally, properties with energy-efficient AC or smart technology will command higher prices.    

  • Your AC can boost your home’s overall appeal

When listing your home, it’s crucial to make it move-in ready to hasten the selling process. To achieve this, a seller must focus on the outside living space and closely monitor the interior.  

While curb appeal can pull buyers in before they can set foot inside the house, it’s what’s inside that matters more. De-personalize your home and keep it clutter-free. This way, they can fully visualize themselves living on the property.  

If you want to sell your home at the highest price, ensure that home viewers feel cozy and comfortable while viewing. Besides staging a property, having a fully functioning AC is vital to evoke positive feelings from your prospects. They say that buying a home can sometimes be an emotional process for both the seller and the buyer. If your property is on the market, it’s vital to    

  • Good AC means your home is properly-maintained   

Besides providing comfort, a good AC system is a telltale sign that the home is adequately maintained. This belief holds as long as the entire property doesn’t have obvious signs of damage, such as broken tiles, fidgety doors and windows, leaking roof, to name a few.  

As a significant home fixture, any issues with AC should be taken care of as soon as possible. Whether you’re planning to list your home for sale or not. To ensure that your asset is adequately maintained, ask professionals to perform maintenance checks annually. Experts can spot minor issues and fix them accordingly, allowing you to reduce the risks of costly repairs down the road. And as maintenance checks aren’t for free, you can leverage these costs during a home sale.   

  • Your buyers are less likely to negotiate for a lower price

The home selling process involves not only home viewings but home inspections, too. Typically, a professional will examine the property in question and list the minor and major parts that need to be fixed or renovated. Buyers will use this inspection report to decide whether they want to buy your home at its current listing price or negotiate for a lower price.    

As an AC installation and replacement requires substantial spending, your buyer will likely use this as one of the primary reasons for asking for a lower price, driving your final cost lower than expected.  

Concluding thoughts

A home’s air conditioning system is an essential property fixture, providing comfort and reducing potential health issues. As such, any AC work requires a substantial investment. The good news is that these fees don’t only keep your cooling appliance in tiptop shape. Expect to reap the rewards when you’re ready to sell our property. 

References

  1. 1. Office of Energy Efficiency and Renewable energy. Undated. Air conditioning. www.energy.gov. https://www.energy.gov/energysaver/air-conditioning. Accessed 27 July 2022 
  2. 2. HomeAdvisor. 12 July 2021. How Much Does It Cost To Install Or Replace An HVAC System?. www.homeadvisor.com. https://www.homeadvisor.com/cost/heating-and-cooling/#average-hvac-replacement-cost. Accessed 27 July 2022
  3. 3. Kalfrin, V. and Haddad, R. 25 July 2022. How Much Value Does Central Air Add to Your Home?. www.homelight.com. https://www.homelight.com/blog/how-much-value-does-central-air-add-to-home/. Accessed 27 July 2022
  4. 4. Hannigan, L. 17 January 2022. What to Know Before Buying a New HVAC System for Your Home. www.angi.com. https://www.angi.com/articles/improve-home-value-new-air-conditioner.htm. Accessed 27 July 2022 
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