Do Tankless Water Heaters Add Value To A Home? Closer Look at 5 Reasons

How often have you found yourself standing under the shower, waiting impatiently for the water to heat up? Or perhaps, has the hot water supply ever abruptly stopped, leaving you in a chilling dilemma? The idea of never running out of hot water in the middle of a soothing shower sounds like a distant dream, doesn’t it? But, this dream might be closer to reality than you think, thanks to tankless water heaters.

According to a study by the U.S. Department of Energy, water heating accounts for about 18% of a home’s energy use. Moreover, conventional tank-based heaters can waste anywhere from 15 to 20% of energy due to standby heat loss. In contrast, tankless heaters, often known as “on-demand” units, heat water only when required, slashing energy costs by nearly 27% to 50%.

So, what if you could not only solve these common household dilemmas but also boost your home’s value in the process? Intriguing, isn’t it? This post will delve into the compelling reasons why a tankless water heater could be a game-changing upgrade for your home.

Keynote: Do Tankless Water Heaters Add Value To A Home?

Yes, tankless water heaters can add value to a home. They are energy-efficient, save space, and offer an endless hot water supply. Potential buyers often appreciate these benefits, leading to increased property value. However, the impact may vary based on local market preferences.

The Impact of Tankless Water Heaters on Home Value

Real Estate Perspective on Home Improvements and Value

In the real estate world, home improvements are often viewed as strategic investments. These enhancements, however, do not always guarantee a proportional increase in property value. Their impact varies depending on the nature of the improvement and its relevance to potential buyers.

As a rule of thumb, improvements that increase a home’s functionality, efficiency, or sustainability often offer a more substantial value addition. This is where tankless water heaters shine. By providing an efficient, reliable, and eco-friendly solution for a fundamental need—hot water—they capture the interest of savvy homebuyers.

Studies Showing the Value Addition of Tankless Water Heaters

According to the National Association of Home Builders (NAHB), energy efficiency tops the list of features most sought after by new home buyers. In fact, 90% of buyers prefer an energy-efficient home with lower utility bills over a less expensive home without energy-efficient features.

“The appeal of energy efficiency is clear,” notes real estate expert and author Sheri Koones. “Not only does it reduce energy costs for homeowners, but it also makes the house more comfortable and can significantly boost resale value.”

Comparing Other Home Improvements vs. Installing Tankless Water Heaters

When it comes to home improvements, it’s essential to compare the potential value-add of different projects. For example:

  • A midrange minor kitchen remodel can recoup about 77.6% of its cost at resale, according to the 2023 Cost vs. Value report from Remodeling magazine.
  • A high-efficiency air conditioner and furnace upgrade can recover approximately 71% of its costs.
  • On the other hand, tankless water heaters, apart from the energy savings they offer, can recoup up to 80% of their costs, making them one of the most valuable green upgrades you can make in your home.

Five Reasons Tankless Water Heaters Add Value to a Home

1. Energy Efficiency

Explanation of Energy Efficiency in Tankless Water Heaters

Tankless water heaters are the paragons of energy efficiency in the world of water heating. Unlike traditional heaters, they don’t continuously heat and reheat water in a storage tank. Instead, they heat water on demand, which results in significantly reduced energy consumption.

According to the U.S. Department of Energy, for homes that use 41 gallons or less of hot water daily, tankless water heaters can be 24%–34% more energy efficient for conventional storage tank water daily. And for homes that use a lot more hot water—around 86 gallons per day—you can still achieve energy savings of 8%–14%.

How Energy Efficiency Can Increase Home Value

The energy savings provided by tankless water heaters can translate into increased home value. The National Association of Realtors’ “2019 Remodeling Impact Report” reveals that energy-efficient upgrades, including tankless water heaters, can not only recover their cost but also add a premium at the time of resale. The report estimates that a homeowner can recover 106% of the project’s cost upon selling the home, thus reflecting a significant return on investment.

Benefits for the Environment

Beyond monetary value, energy efficiency has a positive impact on the environment. By using less energy, tankless water heaters help reduce the carbon footprint associated with power production. This green technology aligns with an increasing trend towards sustainable living, thus making homes equipped with these systems more appealing to environmentally-conscious buyers. In a world where sustainability is gaining significant traction, the eco-friendly aspects of tankless water heaters are an additional value-add for your home.

2. Lifespan and Durability

Comparing Lifespan of Traditional and Tankless Water Heaters

When it comes to longevity, tankless water heaters have a clear edge over their traditional counterparts. While traditional water heaters have an average lifespan of 10 to 15 years, tankless models can last up to 20 years or more, given they are maintained properly. This significantly longer lifespan can be attributed to their on-demand operation, which prevents the constant wear and tear experienced by tank-style heaters.

Maintenance Requirements

Proper maintenance is crucial to ensure the long-lasting performance of a tankless water heater. Here are some tips for maintaining your tankless water heater:

  • Annual Inspection: Have your system checked by a professional annually to ensure optimal operation and longevity.
  • Regular Flushing: Flush your tankless heater at least once a year to prevent scale and mineral build-up.
  • Filter Cleaning: Clean the unit’s filter every six months to maintain water flow and prevent overheating.
  • Check for Leaks: Regularly inspect for any leaks or drips that might indicate a need for repairs.

How Durability Affects Home Value

Durability is a key factor in home value estimation. A home appliance that lasts longer and requires less frequent replacement presents an appealing proposition to potential buyers. Therefore, tankless water heaters’ superior lifespan and durability, coupled with lower maintenance needs, make them an attractive home improvement option that adds tangible value to your home.

3. Space Saving Design

Size Comparison: Tankless vs. Traditional Water Heaters

A distinct advantage of tankless water heaters is their compact, space-saving design. Traditional water heaters require a sizeable chunk of space due to their large storage tanks, typically around 60 inches tall and 24 inches wide. In contrast, tankless units are much smaller, approximately the size of a carry-on suitcase, and can be installed on a wall, freeing up valuable floor space.

Implications for Home Space Utilization

With the smaller footprint of tankless water heaters, homeowners can effectively utilize their space for other purposes. This is particularly advantageous in smaller homes or condos where every square foot counts. The saved space could be used for storage, adding a new appliance, or simply enhancing the home’s aesthetic appeal.

Impact on Home Value

Space utilization plays a critical role in enhancing home value. Especially in urban areas, where living spaces are often compact, an appliance that saves space is a boon. By installing a tankless water heater, homeowners not only gain a more efficient hot water system but also free up useful space, a factor that’s likely to be appreciated by potential buyers. This can lead to an increased perceived value of the home, thereby potentially influencing the final sale price.

4. Endless Supply of Hot Water

Explanation of How Tankless Heaters Supply Constant Hot Water

One of the standout features of tankless water heaters is their ability to provide an endless supply of hot water. Unlike traditional tank-style heaters, which store a limited amount of hot water, tankless heaters heat water directly without the use of a storage tank.

When a hot water tap is turned on, cold water travels through a pipe into the unit, where a gas burner or an electric element heats the water. As a result, tankless water heaters deliver a constant supply of hot water, eliminating the wait for a storage tank to fill up with enough hot water.

Importance for Homeowners and Potential Buyers

The convenience of having an unlimited supply of hot water is a significant advantage for homeowners. No more compromising on hot water usage or scheduling water-dependent tasks! This feature is especially beneficial for larger households with high hot water demand. For potential buyers, this benefit can be a major selling point, ensuring they’ll never run out of hot water even during peak usage times.

Effect on Property Value

The combination of convenience, efficiency, and high functionality offered by an endless hot water supply can positively impact your home’s value. Prospective buyers often seek homes that offer comfort and convenience, making tankless water heaters an excellent investment to enhance the attractiveness and overall value of your property.

5. Government Incentives and Rebates

Overview of Government Policies

Governments worldwide are promoting energy-efficient appliances, including tankless water heaters, through various incentives and rebate programs. The objective is to encourage consumers to shift towards more sustainable and energy-efficient alternatives. Here are a few examples:

United StatesFederal Tax Credits for Energy EfficiencyUp to $300
California, U.S.California Energy Commission RebatesVaries by location and product
CanadaCanada Greener Homes GrantUp to CAD 5,000
United KingdomEnergy Company Obligation (ECO)Covered costs of energy-efficient improvements

Impact of Incentives on Installation Cost

These government incentives and rebates can significantly offset the initial cost of installing a tankless water heater, making it a more affordable option for homeowners. This cost-effectiveness is especially appealing considering the long-term energy savings and durability that tankless water heaters offer.

Influence on Home Resale Value

Having an energy-efficient home improvement like a tankless water heater, complemented by government incentives, not only reduces your out-of-pocket expenses but also improves the home’s marketability. Prospective buyers are likely to be attracted to a home featuring green technology, which, apart from its inherent benefits, also signifies reduced future expenditures on energy bills. Therefore, these incentives indirectly enhance the property’s resale value, making your investment in a tankless water heater even more worthwhile.

Potential Drawbacks of Tankless Water Heaters

Like any home improvement, the decision to install a tankless water heater should also consider potential drawbacks, ensuring a balanced view. Here are a few factors to consider:

Initial Installation Cost

While tankless water heaters save on energy costs in the long run, they have a higher initial cost compared to traditional tank heaters. This cost includes the price of the unit itself and the installation charges, which might be higher due to the complexity of the installation process. However, as mentioned earlier, various government incentives and rebates can help offset these initial costs.

Need for Retrofitting in Some Homes

Depending on your current water heating setup, transitioning to a tankless system might require retrofitting, which could increase the overall installation cost. Factors like the location of the heater, the existing electrical system, or gas lines may need adjustments to accommodate a tankless unit.

Limited Simultaneous Usage

While tankless water heaters provide a continuous stream of hot water, they might struggle to supply multiple outlets simultaneously. For instance, taking a shower and running the dishwasher at the same time might stretch the unit’s capacity. However, this limitation can be mitigated by correctly sizing the tankless water heater for your specific usage needs or installing multiple units in larger homes.

Final Thought

As we’ve explored, tankless water heaters offer numerous benefits—from energy efficiency and durability to space-saving design and endless hot water. These features not only make daily life more comfortable and sustainable but also add significant value to a home. They represent an investment in a greener, more efficient lifestyle, and the market reflects this sentiment.

However, every home and homeowner is unique. As such, the value addition of a tankless water heater will depend on individual circumstances—your home’s existing setup, your local real estate market, the importance you place on sustainability, and your potential buyer’s priorities.

Ultimately, tankless water heaters embody a shift towards homes that are not just places to live, but spaces that enhance our life quality, respect our environment, and anticipate our needs. Whether for your comfort or with a future sale in mind, investing in a tankless water heater could be a step towards a future where homes work smarter, not harder.

Tankless Water Heaters Increase Home Value (FAQs)

Are tankless hot water heaters worth the investment?

Indeed, tankless hot water heaters are a sound investment due to their energy efficiency, long lifespan, and compact size. They only heat water on demand, reducing energy costs in the long term. They also typically last about 5-10 years longer than traditional water heaters, providing long-term value.

Why do tankless water heaters increase a home’s resale value?

Tankless water heaters enhance a home’s resale value because they offer significant energy savings and are viewed as an upgraded appliance. Their compact size is attractive to buyers as it frees up space in the home. In addition, potential homebuyers appreciate the convenience of instant hot water that a tankless system provides.

Can a tankless water heater be installed in any type of home?

Yes, tankless water heaters can be installed in various types of homes, from apartments to large houses. However, certain considerations, such as the home’s existing plumbing and electrical system, the size of the home, and the hot water demand, may influence the installation process and system choice.

What are the most reputable brands or models of tankless water heaters on the market?

Several respected brands manufacture tankless water heaters. Rinnai, Rheem, and Noritz are recognized for their superior quality and performance. The Rinnai RL Series, Rheem Performance Platinum, and Noritz NRC661 are particularly well-regarded models in the market.

Can a tankless water heater be integrated with renewable energy systems like solar panels?

Yes, certain tankless water heaters can be integrated with renewable energy systems, like solar panels. A solar water heating system can preheat the water before it reaches the tankless heater, reducing energy use even further. However, such integration would require careful planning and potentially additional equipment.

How does a traditional tank water heater impact the value of your home in the current housing market?

While traditional tank water heaters are standard, opting for a more energy-efficient system like a tankless model may increase the value of your home. With the housing market’s growing focus on sustainable products, such upgrades can give you an edge.

How can renovations involving the replacement of a storage water heater enhance a home’s value?

Renovations replacing a storage water heater with a tankless model can improve your home’s value. Besides offering continuous hot water, tankless models are compact, freeing up storage space. This is often seen as a significant upgrade by potential buyers.

Is the initial investment on a tankless hot water heater worth it considering the impact on the electric bill?

Yes, despite the higher initial investment, a tankless hot water heater can lead to significant savings on your electric bill, particularly if you opt for a model powered by natural gas. The energy efficiency of these models can offset the initial cost over time.

How does the installation of a tankless model affect the value of a house according to Zillow?

According to Zillow, the installation of a tankless water heater can positively impact a home’s resale value. The modern and energy-efficient nature of these devices is attractive to potential buyers, essentially leveling the playing field against homes with traditional water heaters.

Does a tankless model with a heat exchanger deliver hot water faster to the faucet or fixture?

Yes, a tankless model with a heat exchanger can deliver hot water faster to your faucet or fixture. This is because they heat water on demand, meaning hot water is readily available as soon as you turn on the tap. This immediate availability can contribute to the perceived value of your home, often measured in dollars saved over time.

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