Does replacing electrical/rewiring improve home value?
Realtor · Schertz, TX · Member since 2015 · 226 posts · 53 votes
Any thoughts?
My electrician is recommending that we rewire the entire house bc the existing wiring is copper but does not have a ground (built in 1968). We plan to BRRRR this one. He says it would improve home resale value and we could use 3-prong outlets (that actually serve a purpose) so things like PC's and other devices that require that plug could have grounding.
Has anyone done this or have any insights? The numbers work "OK" if i have to spend the extra money, but i need to determine if i NEED to.
I think long-term, I'm more concerned with liability than sort term gains/savings. Since it'll be rented safety and liability are chief concerns for me.
Thanks
@Miles Stanley, yes, it will increase the value. But the question you should always ask is does it increase the value ENOUGH to justify the expense?
If you go onto just about any free website that estimates the cost vs. value-add to a SFH for improvements, you will find, without fail, that the repair/upgrade that benefits the most is paint. Paint is cheap but improves the value by a significant amount. Other remodels like bathrooms and kitchens only add about 65 cents per dollar spent on the improvement.
Plus, who cares about resale value? You are BRRRRing this property, right, so you intend to keep it. All you care about is the appraisal. In my town, appraisal is mostly invluenced by the following factors, in no particular order:
1) finished, livable square footage
2) number of beds
3) number of baths
4) central HVAC vs. other type of heat/cooling source
5) garage space
6) yard fencing
Beyond that, pretty much everything is going to suck more money out of your pocket than it returns.
Maybe appraisers in your market work differently, but in my town I would expect to pay around $5,000-$7,000 for a complete rewire, up to code, by a licensed professional, that would replace every foot of active wire. I doubt it would boost the re-sale by by much more than $2,000, and it may have $0 impact on an appraisal. A clear loss, from a BRRRR view point because the appraisal value and the re-sale value are not the same. I know this because I have recently had 2 properties with fuse boxes appraised for re-finance, and when making adjustment for comparison to comp sales I have never seen the appraiser adjust even $1 of value for upgraded electrical. A home buyer might pay a little more, but not the full $5,000-$7,000. Renters won't pay a dime more in rent either. If it works, they'll pay.
You assume that a person seeing a three-prong outlet knows what being "grounded" means lol other than that, everything you've said makes complete sense.
@Miles Stanley. I purchased a house built in mid seventies that was all ungrounded two prong wiring. Had 12 gauge wire with 20 amp breakers and 15 amp two prong outlets everywhere. Most rooms had at least one burnt and busted outlet. Your electrician is correct about being able to install a GFCI at the beginning of the daisy chain of outlets to protect the outlets in the room. I did this and installed three prong 20 amp receptacles with my 20 amp GFCI. In code for my area it stated that each receptacle was required to have statement on it about being ungrounded but protected by GFCI. We lived there for two years afterward before selling with no issues. I also installed GFCI breakers for major appliances and kitchen and bath areas. Spent less than $700 to do it myself.
Brrrr deal so you're keeping this as a rental.
Let's just say the upper end of the tenant pool isn't stocked with people willing to go without grounded electricity.
I know I wouldn't even consider living at a place that was two-prong.
@Joe Splitrock standard outlets in a house are not gfci. Please give us an example of a real situation that would be dangerous using a tamper resistant outlet on a circuit that doesn’t have a ground. Again, it is just the same as having a 2 prong outlet, just the user might assume there is grounding. Would it be dangerous vacuuming or plugging in a tv or a light. Of course gfci’s are required on bathrooms and kitchens anyways. I’m just trying to hear a real example of the danger you are warning about. Not saying it’s not there, just not sure what you are envisioning being a big danger. Just don’t say a hairdryer etc in the bathroom because we all know there must be gfci in the bathrooms and kitchens and I’m talking about the rest of the house. Also, I did not advocate against starting your circuit with gfci to branch outlets, it just can be hard to work an old system like that when the start of your circuit could be found in a light box or have some weird combos of wiring using white neutrals as hots etc etc. his options are to work with what he’s got or overhaul the whole system. Again, my point is, if an outlet exists, it’s safer for children to have a tamper resistant outlet that’s 3 prong on a groundless wire, than a 2 prong that’s not tamper resistant. Children won’t be able to read whether the outlet is groundless or not. Most people won’t understand this and might be scared of the unknown. So what is a real scenario where this becomes a real dangerous threat, more so than having the outlet function as a 2 prong? If you can convince me, I could change all the outlets back to 2 prong on one of my flips but my concern is children and I think tamper resistant 3 prong is safer. Liability is another question, I’m just searching for the safest solution if you’re not going to rewire.
@Joe Splitrock standard outlets in a house are not gfci. Please give us an example of a real situation that would be dangerous using a tamper resistant outlet on a circuit that doesn’t have a ground. Again, it is just the same as having a 2 prong outlet, just the user might assume there is grounding. Would it be dangerous vacuuming or plugging in a tv or a light. Of course gfci’s are required on bathrooms and kitchens anyways. I’m just trying to hear a real example of the danger you are warning about. Not saying it’s not there, just not sure what you are envisioning being a big danger. Just don’t say a hairdryer etc in the bathroom because we all know there must be gfci in the bathrooms and kitchens and I’m talking about the rest of the house. Also, I did not advocate against starting your circuit with gfci to branch outlets, it just can be hard to work an old system like that when the start of your circuit could be found in a light box or have some weird combos of wiring using white neutrals as hots etc etc. his options are to work with what he’s got or overhaul the whole system. Again, my point is, if an outlet exists, it’s safer for children to have a tamper resistant outlet that’s 3 prong on a groundless wire, than a 2 prong that’s not tamper resistant. Children won’t be able to read whether the outlet is groundless or not. Most people won’t understand this and might be scared of the unknown. So what is a real scenario where this becomes a real dangerous threat, more so than having the outlet function as a 2 prong? If you can convince me, I could change all the outlets back to 2 prong on one of my flips but my concern is children and I think tamper resistant 3 prong is safer. Liability is another question, I’m just searching for the safest solution if you’re not going to rewire.
I am just telling you what electrical code requires and why. Tamper resistant outlets are good, but if you are putting them on an ungrounded circuit, then you need to use GFCI and label them "Not Grounded". You can buy GFCI circuit breakers which is probably easier in a retrofit. That gives you your tamper proof outlet, meets code and reduces shock hazard. Or use two wire outlets. Either way, you want to rehab within code.
Some devices like lamps and vacuum cleaners are only two-prong with no ground. In that case, you are correct that ground doesn't matter. The risk is three prong devices with ground. That is found on power tools, appliances and an increasing number of devices. The ground is there for short circuit protection. If an internal fault occurs, the case and power cord is grounded, to provide a safe ground path. If you have no ground, the short circuit finds another path to ground. That is usually through the person touching the equipment. Not to sound morbid, but your body resistance is high enough that you can get electrocuted before a standard circuit breaker trips. Many people get electrocuted this way every year. GFCI monitors the current on the hot and neutral wires and trips when it senses imbalance. So in a case where ground is absent, it is able to detect the current going through the person and interrupts the circuit. GFCI makes an ungrounded circuit safer. It even makes a grounded circuit safer.
The NEC standards committee would love to see GFCI required on all outlets, but it has been blocked due to contractors arguing too much cost burden. Every release of National Electrical Code since 1971 has added more locations as required for GFCI. It looks like 2020 code changes are going to require GFCI on dryers after three electrocution deaths by children touching faulty dryers in 2018. They are also planning to push the requirement to finished basement spaces in addition to unfinished spaces.
Here is a story of a girl electrocuted by a faulty dryer without proper grounding:
https://www.click2houston.com/news/2018/07/11/child-electrocuted-in-texas-rental-home-that-mother-says-had-electrical-issues-before/
Here is a good link to explain grounding and GFCI better:
https://www.thespruce.com/what-is-grounding-1152859
I am predict within 20 years that code will require dual GFCI / AFCI detection breakers on all circuits. That would give all circuits shock and fire protection. The technology is improving and cost is coming down for these better circuit protection devices. Of course people will fight this due to cost so who knows.
@Miles Stanley - please consult with a trustworthy electrician. Some of the comments above are not acceptable solutions and will certainly open you up to liability (i.e. "grounding" to a metal junction box). Using GFCIs is an acceptable route. You don't need a GFCI for every plug, only one per run. The rest are standard 3-prong outlets. I wouldn't re-wire the whole house.
@Miles Stanley - please consult with a trustworthy electrician. Some of the comments above are not acceptable solutions and will certainly open you up to liability (i.e. "grounding" to a metal junction box). Using GFCIs is an acceptable route. You don't need a GFCI for every plug, only one per run. The rest are standard 3-prong outlets. I wouldn't re-wire the whole house.
Using a metal junction box would be allowable if the conduit is metal and provides a continuous path to ground. An electrician needs to review the system and see if this is an option. I have seen homes built in the late 1950's that were wired this way, where the ground is the metal junction box and conduit continuous to earth ground.
A 3-pin ungrounded outlet is the functional equivalent of a 2-pin outlet except a 3-pin plug obviously doesn't fit in a 2-pin outlet. You can label the 3-pin as ungrounded or "downgrade" to 2-pin to protect yourself from the liability risk of a tenant accidentally getting shocked due to there being no ground. A tenant who installs a 3-to-2 converter to plug in the 3-pin plug takes on that risk. That is probably the cheapest way to address the concern, but it doesn't make your property any safer.
I am doing the wiring upgrade in a property I am renovating now, but that was an add-on to the renovation. It is a great opportunity more me to fix a lot of lurking electrical issues I didn't know I had when we traced the wires. I learned my property had massively overloaded circuits that just by luck didn't trip. We are adding more breakers to limit the scope of circuits. We are also adding more outlets. I think better load distribution by design and upgraded safety are the main benefits of the rewiring. You won't see it in rent or property value though. Tenants and buyers just pay for the lights to turn on with the switch.