When you’re a homeowner, one of the questions you might have is “does a new roof increase home value”? The answer is crucial if you want to sell, tap into your home’s equity, or remove private mortgage insurance from your loan. Unfortunately, there isn’t a clear-cut answer to whether a new roof will increase your home’s value and how much.
Several factors tied to local real estate market conditions and buyers’ preferences will determine how much of an ROI you’ll get. Some of those factors include typical weather conditions and neighborhood trends. Still, you don’t want to put your home on the market if it needs a new roof. Let’s examine how a new roof can be tied to your home’s value.
Does a New Roof Increase Home Value?
The average cost for a homeowner to replace a roof is around $8,000. However, the range begins at $5,500 and goes up to $11,000. This likely represents an owner’s insurance deductible, not the total cost of materials and labor. Deductibles for roof claims can vary because of insurance providers, local roofing companies, and supply conditions.
Other factors include the materials, including the shingles, that homeowners choose. While the average ROI on a roof replacement is 60%, some homeowners may see a return as high as 109%. For instance, Class-4 impact shingles can be a real selling point in hail-prone areas. They can give buyers peace of mind and reduce their property insurance rates.
In areas where Class-4 impact shingles are desirable, replacing a roof with these materials may increase the home’s value more. But generally speaking, buyers want to know they’re not going to have to make major repairs after moving in. A roof that’s near the end of its typical 20 to 25-year lifespan is a liability.
Buyers may not make offers, or you may have to bring down your asking price. Visible signs of roof damage and age, such as buckling shingles, may also turn off eagle-eyed buyers. Home inspections that uncover older and poor roof conditions (or damage) can also lead to seller concessions or buyers backing out.
How Much Does a New Roof Increase Home Value?
So, how much does a new roof increase home value?
Let’s say the total cost of a new asphalt shingle roof is $30,000. That comes out to a resale value of $18,000 with a 60% return. In other words, you’ve added $18k in resale value to your home by replacing your roof. However, you can get a better idea of how much a new roof will increase your home’s value by asking a local real estate agent.
Agents will be familiar with home sale trends and what homes with new roofs have been selling for. For instance, a home in New York with a new roof may gain more resale value than an Illinois property with a recent roof replacement. Likewise, buyers in your market may prefer metal or tile roofs versus asphalt shingles.
If you replace a damaged tile roof with asphalt shingles, you probably won’t increase your home’s resale value as much. In addition, choosing to reroof over existing tiles does not hold as much weight as a complete tear-off. It’s less expensive for homeowners to make partial repairs or have a contractor do a complete or partial reroof.
However, this may cause problems for buyers in the future. That’s because a contractor can only reroof so many times before the slope gets too skewed. Furthermore, it’s a challenge to match materials with a partial repair or reroof. Mismatched tiles, even if it’s subtle, can make a home lose some of its curb appeal and resale value.
Should Homeowners Install a New Roof Before Selling?
The correct answer to this question is it depends. Nonetheless, there are some tell-tale signs your home needs a new roof. They are:
- Evidence of suspected or actual leaks
- Asphalt shingle granules coming down your gutters and downspouts
- Ice dams during colder months
- Cracked and buckling shingles
- Torn shingles or pieces of shingles falling off
- Roofs with a sagging appearance
- Strong hail and wind storms that caused damage
If you’re not sure if you need a new roof, it’s best to hire a licensed roof inspector. Stay away from hiring companies that chase storms. They tend to prey on neighborhoods where recent severe storms have come through.
While they offer free roof inspections, these companies may not use ethical or honorable business practices. Hire a reputable local company instead. Insurance may even cover some damage if your roof has been damaged in a storm.
Trying to sell a home in need of a new roof is simply a bad idea. At the very least, you’re going to have to put your home on the market at a reduced asking price. At the very worst, you’ll get sued by the buyer after they discover the extent of the problem or incur damages. Better to bite the bullet and ensure your home’s roof is in tip-top shape.
Nonetheless, you may not need to install a new roof if an inspector determines minor repairs will suffice. It doesn’t make sense to pay your deductible for a new roof if all you need are a few shingle or gutter replacements. Be sure to get a second opinion if an inspector or real estate agent’s recommendations make you uneasy or suspicious.
So, does a new roof increase home value? It depends on where the home is located and local buyer preferences. However, a new roof will generally increase a property’s value because it makes a better impression. A new roof increases a home’s curb appeal and reassures buyers that sellers have maintained the home. No one wants to buy a house that needs major repairs.
Nonetheless, it’s not always necessary to replace a roof before selling a home. You need to weigh the extent of necessary repairs against your potential ROI. It won’t make sense to replace a five-year-old roof that needs a few shingles. But it will if the roof’s been in place for 23 years and recently sustained hail damage.
Always evaluate your options by contacting the experts at Perfect Exteriors today.