Will a mini split increase home value

Question

I’m thinking should i add mini split to my properties but will it increase my home value

Marcus Auerbach · Answer

Okay, someone who does not know what a mini-split system is is giving you advice. That's just great. Can't tell you if it is going to reflect in a higher appraisal, but:
AC is a tenant feature and will increase your rent and your reliability.

I hate window units with passion. Nothing screams neglect more than window units. For a little more money you can buy a mobile AC, which looks like a dehumidifier. We usually cut a permanent dryer vent in the wall and use that to exhaust it to the outside (instead of hanging a hose out the window, yikes again).

If you don't have forced air in a property (meaning if you have hot water radiators) a mini-split system is one of the most cost-effective ways to cool a house. You get most of the benefits from a central AC without the insane talks of installing ductwork in an old house. They are not very popular in my market (Milwaukee) either, but for no obvious reasons. A couple hours north in rural Wisconsin they are the most popular system, especially for lake homes and cabins.

Appraisals are always +/- 10%. I know that from my rental properties, many of them are close to identical, we rehab to a uniform standard and it always amuses me to get appraisals back. The problem with a refi appraisal is there is no purchase price the appraiser can target, so they will always be more conservative and aim low.

Bottom line: I would absolutely invest in a mini-split systems. But not for the appraiser. if it saves you the next 2 turn overs you already break even and you probably get get a little higher rent.

Jonathan Greene · Answer

When you are asking about mini split instead of HVAC, you are really doing it for the benefit of the tenant or the owner, it's not about raising your property value.

Joe S. · Answer

(In Texas you need AC. ) We had a house we just redone for a rental and it was an older house with no pre-existing ductwork. We put a mini split per bedroom as well as a larger mini split in the living room area. The appraisal was done before we even added the mini split so guess the Appraiser never even noticed the fact that it didn’t have AC so it did not seem to have an effect on the appraisal. If I was buying a house and it did not have AC, I would  notice.  if I was a tenant, I surely would notice. Lol.

Mike Dmuchoski · Answer

@Damein White it will be market specific. In the Southwest where I am, central HVAC is expected. I recently purchased a home that didn’t have heating/cooling on the second floor so I was able to negotiate a discount. By adding a mini split, I increased the value for sure, not to mention increased the comfort of my STR guests.

Billy Daniel · Answer

It may not increase the value (much), but it will make the home marketable to many more home buyers.  Secondary loan programs require a permanently installed, thermostatically controlled heating source.  A mini-split will meet that requirement (as long as it's sized appropriately) whereas a window unit will not.

Bill B. · Answer

If it has no central air/heat I assume you’d probably get an extra $1,000 or $2,000 in value? But really the appraiser is making that call. They may ignore it or they may deduct less for no central hvac than having window units? See if you can reach out to a local appraiser. Maybe the one that appraised the unit when you bought it?

Peter W. · Answer

On average there are few upgrades you can do by themselves which get a positive return on investment on the selling price. In fact most things return less than 50 cents on the dollar. Positive ROI include siding and paint.

Cliff H. · Answer

@Damein White some great points by others concerning increases in rental rates and/or lowering of energy bills than a guaranteed increase in resale price.

That said if you’re paying the utility bills you’ll need to train your tenants/guests how to use a split. Too many people run them like they drive their cars: stomping on the gas, slamming on the brakes, then complaining about poor MPG. Once installed, best to have them on predefined schedules, as they’re only 3x as efficient as gas/oil when they’re working to maintain constant temps versus changing it up/down over time.

Fantastic options for STRs when you control the space (and costs).

Bob Stevens · Answer

My thoughts as well, but really nobody cares, they all put in window units.

Theresa Harris · Answer

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Will a mini split increase home value

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