Adding a Fireplace: Return on Investment

October 29, 2010

While intangible benefits such as comfort and ambience may make a fireplace addition worth the cost for you, consumer attitudes toward fireplaces are changing.

Here are the facts:

Fireplaces no longer are preferred features

• In 2007, the National Association of REALTORS® survey of homebuyers’ preferences listed fireplaces as the most preferred home feature. Almost 46% of homebuyers said they would pay extra (a median of $1,220) for a house with at least one fireplace, the most popular “desired feature” in the survey. However, more recent surveys from the National Association of Homebuilders show that support is slipping, and REALTOR® Magazine recently put fireplaces No. 1 on the list of “Home Fads That Are Falling Out of Style.” That means chances of receiving price support for your fireplace addition when you sell your home are diminishing.

• According to the U.S. Census Bureau, 53% of new homes built in 2008 included at least one fireplace. That’s down from a peak of 66% in 1990, although the numbers may also reflect builders’ attempts to save costs for development houses.

• A fireplace isn’t calculated separately in a professional home appraisal, making it difficult to assign increased value from your investment.

Match your fireplace budget to your house

When you estimate how much a fireplace might add to the value of your house, consider your home’s overall value. A $10,000 fireplace holds its value in a $1 million house because buyers expect this feature in an upscale home. But a $10,000 fireplace might not be such a crucial component of a $100,000 house, especially if features that potential buyers consider more important are lacking.

Get value from your fireplace investment

• Put a new fireplace in a room other than the kitchen–usually the family room or great room.

• Locate a fireplace in a smaller, easy-to-heat room such as an office, guest bedroom, or master bedroom.

• Equip your fireplace with energy-efficient glass doors and an exterior venting system that prevents heated air from being pulled out of rooms.

Rich Binsacca is the author of 12 books on various home-related topics and is currently a contributing editor for Builder and EcoHome magazines. He has written articles for Remodeling, Home, and Architectural Record, among several others. He intermittently uses the wood-burning fireplace and the gas-fueled freestanding stove that came with his current home.