Value of a fireplace in Michigan?

Question

I am searching for investment properties in SW Michigan and am doing comp analysis and wondering how much $ value a fireplace adds? To be specific, my subject property has a brick fireplace but none of my comps have a fireplace so how much should I adjust my comp values based on this?

Thanks for your insight!!

Cheryl Schlehuber · Answer

Moved that territory to northern Michigan And it's a whole new conversation because we love our fireplaces.

Scott M. · Answer

I chatted with an appraiser friend of mine and she said that fireplaces are tricky when it comes to value because they very dependent on a lot of factors.  You said in your question that none of the comps in your area have a fireplace…now, we don’t know if that means 2 comps or 200.  If the norm is that homes do not have fireplaces in your area then they would be considered less value…like Cheryl said, move that up north and it becomes a different story.  Move that house to FL and it is a different one.  So location, utility/use is a factor.  So is the style, gas or wood burning.  Is it a simple fireplace or is it a main feature of the home or of a room.  She said that where fireplaces are hit and miss…meaning some homes have them some don’t they will generally be overlooked by most appraisers meaning the value won’t increase just because you have one.  So not only does it depend on the fireplace/location norms it will depend a lot on the appraiser.

In terms of hard numbers, she said 1-2% of value max.  In terms of hard dollars she said 0-2,000 unless it is an amazing architectural feature of the property.

As an investor, I would count on precisely $0.  I would be conservative in your numbers on such a small potential.  Kind of like if a home has a 2.5 car garage and all other garages are 2.  Would I get a bump on the extra .5, maybe, maybe not?  As this is in the hands of an appraiser I will probably never meet and who is chosen randomly. I would prefer to not count anything and be surprised if he/she/they do VS be disappointed if they don’t.  If your financials are dependent on you getting credit for the fireplace I would say the deal it too tight and move on.  If you get an extra 1K because of it, great, but don’t count on it.  Be conservative…and this is a great place to pull back.

On the flip side, if you are renting it, or going to fix it, rent it and sell it as a rental it may be a liability as the landlord should seal that off and not allow tenants to use it.  So, as with everything, it depends : )

Rodolfo Goncalves · Answer

In my experience, I don't think this feature will add any value to the house. I prefer buying houses without fireplaces due to liability. I have 3 rentals in the region and none of them have fireplaces.  All of them appraised higher than the comps. Maybe you can consult a local appraiser to receive some insight.

Seth Williams · Answer

Are we talking about a gas fireplace or wood fireplace?

And more importantly, is this a fireplace that only serves an ornamental feature (like in my house, 90% of the heat goes straight up the chimney and doesn't do hardly anything compared to the forced air heat) or is it a serious wood-burning furnace that can largely replace a gas furnace in some or all of the house?

I don't have any data to offer from an appraisal perspective, but just practically speaking, it seems like an actual gas furnace alternative would be a bigger selling point than a fireplace that just sits in the corner and looks nice.

Isa G. · Answer

@Rodolfo Goncalves, @Scott M. That makes sense that it depends regarding whether it's a sale or rental. I'm thinking about renting most likely so that's helpful to know. Also, thanks for all of the intel from your appraiser, Scott! I've only looked at three comps so it would be good for me to research this a bit further. My sense is that fireplaces aren't a must-have in Kalamazoo where I'm looking but I guess it is neighborhood/property specific. I'm sure I'll learn more as I continue analyzing properties in the area.

@Cheryl Schlehuber I am not surprised to learn that about Northern MI. I'll keep that in mind for any future investing I do there!

Rodolfo Goncalves · Answer

Don't get me wrong, I love my fireplaces too; I have one insert and one free standing in my house and go through 5 cords of wood every winter.

Value of a fireplace in Michigan?

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