The value of a fireplace to the price of a house is substantial. A fireplace is one of the top six features an appraiser looks for when establishing the market value of a house and one of the most requested features of home buyers. A fireplace can potentially return thousands of dollars on your investment. In addition, the home heat savings and environmentally friendly aspects of fireplaces can make a house more attractive to buyers, adding more value beyond dollars.
The value a fireplace adds to the price of a house can be seen in a formula developed by the National Association of Home Builders. The NAHB developed its Home Price Model in 2004 to show how certain features affect the price of a home. The standard "southern suburban" home used in this formula included a fireplace and was priced at $176,415. When the home price was figured without the fireplace the value dropped to $156,332, according to NAHB.
Value in Remodeling
The value of a fireplace to the price of a house can be achieved through remodeling, as well. According to the website RemodelorMove.com, the addition of a new fireplace can add between $1,800 and $7,200 to the selling price of your house. A fireplace update or upgrade can earn a 50 percent to 80 percent return on investment, adding $1,500 to $6,400 to your home's value.
The value of a fireplace to the price of a house extends beyond resale value. Buyers like the homey atmosphere created by a fireplace. They also like the savings they would likely experience on their heating bills. Fireplace inserts can save between 20 percent and 40 percent off annual heating costs when used to supplement an average central furnace system, according to the Hearth, Patio and Barbecue Association. One retailer, Alaska Fireplace and Accessories, claims a 100 percent payback on its products between two and four years.
While it doesn't add value to a home's sale price, tax credits for fireplaces increase the value of the investment for the builder. New fireplaces or fireplace inserts are eligible for a federal consumer tax credit intended to spur investment in energy-efficient equipment. The Federal Tax Credit for Consumer Energy Efficiency covers up to 30 percent of the cost of qualified fireplace inserts (with a cap at $1,500), according to the U.S. government's Energy Star group. The credit runs through 2010.
If you are trying to sell your home in winter months, a fireplace is a huge advantage. It evokes an immediate feeling of warmth, both physical and psychological, to interested buyers and open house visitors. This could provide a distinct selling advantage over other houses on the market.
- Photo Credit finnish fireplace image by Adrian Hillman from Fotolia.com
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