Medium-priced homes often include some remodeling. It is common to find a home with an upgraded kitchen or bath or both, but a trip to the basement might reveal a different picture.
My goal is to bring to your attention upgrades that at first glance may not be as exciting as a new kitchen or bath, but cost much less and will have a positive effect on quality of life, add value to your home, and save money over the long term.
As the price of housing in San Francisco has continued to rise, buyers are forced to choose smaller homes. Everyone is challenged to stretch their imaginations to make every square inch of space count. Often I tell my new buyers that any place that sells home-organizer systems is worth a visit to warm up their minds to city living, where space is at a premium.
It is common knowledge that a coat of paint is the most economical way to make a positive change in the look and feel of a home. Next in line, there is the kitchen and bath remodel. Often in no time at all, the idea of knocking down a wall to make an open floor plan becomes a “must have.” What started out to be a $25,000–100,000 remodel can double or triple in cost if you don’t keep a tight grip on your budget.
Basements normally do not get buyers excited, but I hope my column will give you food for thought. To get an idea of the cost to replace a gravity furnace and a water heater, I checked in with a client who recently bought a single-family home and had made the switch to a new furnace and tankless water heater. He told me It cost $17,500 for both, including labor. This was a high-end furnace (97 percent efficiency modulating 3.5 ton 80,000 BTU) with a HEPA filter and humidifier attached. The cost included removal of old furnace and asbestos. I found at the low end a new furnace could cost as little as $3,500 (not including removal of old furnace and ducting).
The interesting thing with this particular buyer is that he passed up many homes that had nice remodels because they had an old gravity furnace with asbestos-covered ducts. He was afraid of the health hazards related to asbestos and asbestos removal. Eventually he found a beautiful home that had everything his family needed. It also had the original gravity furnace complete with asbestos-covered ducts. My client found that asbestos removal is closely controlled by the government and can be done safely. This old furnace, heating ducts, and water heater were something that could not only be replaced, but liberated space to use for another purpose.
A 60-year-old gravity furnace and an old water heater will take up considerably more floor space than a new energy-efficient furnace and tankless water heater. Also, an old furnace will more likely than not have large asbestos-wrapped ducts taking up headroom in the basement. Considering that the average price per square foot of a home is running at more than $1,000, every inch of floor space liberated is money in the bank and provides new opportunity.
When I asked my buyer how much space he gained when he upgraded the furnace and water heater, he said “Probably around 100 square feet actual space, but really more than that because the old furnace was taking up a lot of space in the middle of the basement, while the new (much smaller) one is against a wall. Also, the new ducting is recessed in the ceiling. The old ducting was chewing up ceiling height.”
The end result was a large open basement ready to develop into a garden apartment, making $17,500 seem like a small price to pay for the positive upgrade with benefits of enjoying a warm home and instant hot water at a reduced cost.
The moral to this story is quite simple: Check out the basement closely when you are considering making an offer on a home. Do not let an old furnace or ancient water heater scare you off. I know buyers today like to do their own research. I found many websites that had detailed calculators to compare the energy savings and cost of a new furnace and instant hot water heater to old energy hogs. This does not include added value to your home by liberating space or the benefit of being warm and cozy in the winter in your home.
If you have personal experiences on how to add value to a home that you
would like to share, please e-mail me at [email protected].