I am buying a home and the furnace is 20 years old. It still runs fine. I can probably replace it for about $1500 (cheap labor). Is it wise to replace the furnace since it is old? Does it add extra value to the home beyond just adding a sales point?
Depends.
Are you looking at replacing anything else?
Depends on the condition and if you have the money. In cold states like the Northeast, it’s probably worth it. What type of system is it? Anything old is probably going to have an AFUE rating of 60-70% whereas a new dual stage heating system can hit 93-95% efficiency. You’ll save money on the fuel and probably make the money back in about 5 years time. Also around here the gas company will kick in $500 in rebates to replace a furnance and this state just set up a $600 credit for this year only to replace a furnance so it may not end up costing that much to do it.
It will certainly make it a little easier to sell and you’ll enjoy the savings while you have it.
If the home is rated as “energy efficient” by an energy rater it can add value.
Example:
Average annual utility bill for a comparable home is the area is 1,900 and after improvements your subject property is determined to average to use 40% less than the comparable properties than your home would be valued approx 15k more because of the energy savings.
If it is a gas furnace, after 20 years there is a high likelihood of a broken/cracked heat exchange. make sure that if you decide not to replace it that you have it thoroughly examined by a qualified furnace inspector and have it checked for carbon monoxide emisssions.
Keith
I suppose I should add that I plan on flipping this house and hope to resell it within the next 6 months. This is in Iowa. I will be making a total of about $25K in other fixes too. The house appraises for $92K but it comps for around $140K.