Does a Fireplace Add Value to a Home?

Homeowners preparing to sell often look at all sources of value to determine the ideal listing price for their properties. While their real estate agents can conduct a comparative market analysis (CMA), homeowners often estimate their own property values before meeting with them. One common question sellers have is, “Does a fireplace add value to a home?” 

It’s hard to isolate the specific value a fireplace provides compared to other aspects of a home, but studies show that a fireplace can boost home values compared to similar properties without one. 

This guide will cover the key considerations you need to know when evaluating your fireplace or considering the installation process. Learn about different fireplace types, changing buyer demands, and the regional influences on these assets. 

How Much Value Does a Fireplace Add?

Fireplaces can add value to a home. As of 2021, the average house with a fireplace sold for 13% more than similar homes without one. Additionally, 77% of buyers said they would pay more for a home with a fireplace. 

While these insights are promising, this doesn’t mean that you should run out and add a fireplace to your home or expect your house to sell faster because of an existing one. There are a few factors that contribute to the value your fireplace can add.  

• Regional Influence: Fireplaces are more desirable in colder climates where they provide functional heating. You might not notice as much of a value increase in warmer regions. 
• Buyer Demand: Many buyers see fireplaces as a premium feature, not necessarily an essential one. Some buyers might also have preferences for wood-burning vs. gas fireplace options. 
• Impact on Resale: Homes with fireplaces may sell faster, particularly in high-end or traditional markets. Even if it doesn’t add to your home values, it could increase interest in your home. 
• Selling Timeline: It may be harder to excite buyers about your fireplace if you are selling your home in the summer, when the focus is on cooling features. 

A fireplace is a great way to add cozy ambiance to your home, but not every house is right for this staging feel. Your fireplace may have a more neutral impact than you expect in your region or the current market. 

Factors That Influence Fireplace Value

There’s no guarantee that having a fireplace will improve your resale value. In fact, aging or poorly-maintained fireplaces can actively hurt your home values by giving buyers reasons to negotiate the sale price because of necessary repairs. Here are a few factors that determine whether your existing fireplace will contribute to your home values.  

• Home Style and Age: Fireplaces complement traditional homes but may be less essential in modern builds. A classic wood burning fireplace might look out of place. 
• Location: Fireplaces are in higher demand in colder regions and are less impactful in warm climates.
• Energy Efficiency: High-efficiency gas or electric fireplace options may add more value than traditional wood-burning ones.
• Installation and Maintenance Costs: Fireplaces require upkeep, and high maintenance costs could deter buyers.

The current state of the fireplace is one of the biggest factors to consider. If the fireplace is dirty, needs repairs, or even has chimney issues that affect the structure of the house, it could be more of a risk to buyers than an asset. 

Does Installing a Fireplace Make Financial Sense?

There are multiple considerations to keep in mind if you are considering installing a fireplace. You want to evaluate the upfront cost of installation, types of fireplaces available, and the longevity you expect to use it. Installing a fireplace just for resale value might not be worth the effort compared to adding one because you want to use it for several years. Here are a few options and their price points.  

Fireplace Installation Costs

On average, homeowners can expect to pay around $2,400 to install a fireplace. On the low end, you will pay between $1,600 to $2,200 for an electric model and up to $5,000 for a gas or wood burning fireplace. Wood burning fireplaces are the most expensive options and can cost more than $10,000 to add to a home.  

Knowing your installation costs can help you calculate your return on Investment (ROI). If you live in an area where fireplaces are in high demand, then adding a new one can help your resale value. If you live in a warmer climate or don’t plan to use the fireplace before you sell, then the project might not be worth it.  

Also, consider whether you are adding a fireplace to heat your home or to create ambiance during the wintertime. While a crackling fireplace is a cozy way to heat up and creates a welcoming environment, it isn’t the most efficient way to heat a home. You might benefit from other upgrades like heated floors, a new HVAC system, or smart thermostats to improve your heating elements. These could be less risky while appealing to buyers. 

Wood-Burning Fireplace

Wood burning fireplaces are considered the most traditional and charming option. Buyers who are interested in older homes or old-school amenities might be drawn to wood fireplaces compared to more modern and efficient options. 

However, wood burning fireplaces require maintenance. The National Fire Protection Association says chimneys should be cleaned and inspected annually, typically before they are used in the cold months. On average, a cleaning and inspection costs around $400. 

Homeowners with indoor or outdoor fireplace models that use wood also need to chop, store, and replenish this fuel source. When you run out of wood, you also run out of fire. While burning wood can feel charming, it takes a lot of work. When the fire is burned out, homeowners also need to scoop the ashes and clean the fireplace ahead of the offseason.  

Finally, wood burning fireplaces are the most expansive to install. You may need to add an entire chimney to the house to create proper ventilation. That said, buyers looking for authenticity will love this feature and actively seek out wood burning options. This could give them a higher ROI than you expect. 

Gas Fireplace

A gas fireplace is considered easier to maintain than wood-burning fireplaces. You don’t have to worry about securing more fuel as long as you have a gas connection in your home. These fireplaces are also incredibly useful during power outages because you can continue to heat your home. 

Gas fireplaces are considered modern, clean, and low maintenance. This is why they are found in a lot of newer homes or updated properties. Installing one of these fireplaces can add value because it won’t require buyers to invest in as much upkeep. There are even gas fireplaces with remote-start features for added convenience.

However, there are some drawbacks to investing in gas fireplace models. Inefficient fireplaces can use more gas than you expect, driving up your utility costs. You might spend more on gas than you would on wood. These fireplaces also come with their own hazards. Gas fireplaces can add carbon monoxide to your home and still present similar fire safety threats as wood burning models. Never leave a fireplace unattended, no matter the fuel source. 

Electric Fireplace

Consider an electric fireplace if you are looking for the most affordable and lowest maintenance option. In most cases, you can plug in an electric fireplace and immediately enjoy the warmth that comes with it. You can save thousands of dollars by not installing a chimney or ventilation system for your investment. This could be a good option if you want to install a fireplace as a home upgrade but don’t plan to use it before selling your property. 

The fuel source for this option is the electricity used to power your home, so there’s little risk of running out unless there is a power outage. This also means the cost of using the fireplace is lower than with gas or wood.   

However, there are some drawbacks to choosing an electric fireplace. This option is primarily for ambiance rather than heating. You can create the feel of a cozy fireplace, but won’t necessarily be able to warm up next to it. While these fireplaces will appeal to some buyers, they might put off other ones. In many ways, these fireplaces are just for aesthetics, not practical use. 

That said, this could be an excellent choice if you live in a warm climate. Buyers can enjoy the gentle light from the fireplace but won’t overheat themselves or their guests during temperate months. 

Ethanol Fireplace

Rounding out the fireplace options is an ethanol model, which uses renewable fuel made with various plant materials. An ethanol fireplace is cleaner burning than wood and doesn’t create soot and ash that you need to clean out. It is also better for the environment than a gas fireplace. This could be a modern option if you want an eco-friendly fireplace that still puts out heat. 

Ethanol fireplaces do not require you to have a chimney. It is a ventless option that can still warm a space. That said, ethanol fireplaces are not meant to be a primary heat source. While they can generate a little warmth (more so than electric models), they are not as powerful as wood and gas options. 

Ethanol fireplaces can also be expensive. They might have a higher installation cost and the cost of the fuel could be higher than if you had a traditional gas model. 

Buyers also might be confused by the ethanol design. These fireplaces aren’t as common as wood, gas, or electric options. You might not see as much value added to your home if you choose ethanol. However, this could be the right fit for you as long as you currently live in your property. 

Consider the Value Indoor Fireplaces Provide

Every real estate market is different, which means fireplaces might be more appropriate in some areas than others. The same fireplace that adds value to your home might have a negligible impact in the next state over. If you have an existing fireplace, make sure it’s in the best condition possible when you sell your home. This way buyers won’t try to negotiate a lower sale price because of any necessary repairs. If you are considering adding a fireplace, make sure you will enjoy its use as well. This can lower the threshold to hit a positive ROI on the investment. 

Talk to a real estate agent if you aren’t sure a fireplace will add value to your home. Look for additional ways to boost your property values and make people interested in your house. There might be easier and more affordable options at your disposal. 

Turn to FastExpert to find an agent in your area. You can interview multiple candidates to sell your house and get their perspective on fireplace additions. This can help you make informed decisions that will make you more confident when selling your house. Try FastExpert today and take the first steps to move properties.