It's natural to want to achieve the best possible resale price when it's time to sell your home. Therefore, you may be wondering if home electrical upgrades could be a good investment for boosting your home's value.

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Upgrading your electrical system can be expensive. For example, Forbes says rewiring a house costs an average of $8,500 (CAD 11,394), but it could set you back as much as $30,000 (CAD 40,213) for a large home. Therefore, understanding when electrical upgrades add value — and when they don't — can help you avoid a potentially costly and disruptive mistake.

Do Home Electrical Upgrades Increase Your House's Value?

Whether home electrical upgrades increase your home's value depends on the upgrade. Basic upgrades may simply maintain your house's value. However, certain projects, such as installing structured wiring (heavy-duty wiring designed to meet the demands of modern appliances), could be attractive to potential buyers and make your home more valuable.

Regardless of the impact on your home's selling price, upgrading electrical wiring could be a smart move if your electrical system is over 40 years old or isn't functioning as it should. New wiring can reduce the risk of electrical fires and help your system cope with the increased electrical load of modern living.

Which Home Electrical Upgrades Have the Highest ROI?

Calculating the ROI you'll achieve if you upgrade house wiring can be challenging because the returns depend on various factors, including your home's size and the condition of your old system.

Investing in renewable energy could increase your home's resale value while saving you money on the cost of energy. Therefore, projects such as adding solar panels often yield the best ROI, but how much you'll make on your investment depends on your system's capacity and where you live. A 2019 Zillow report concluded that installing a solar energy system increases your home's value by around 4.1% — that's an ROI of about $9,274 (CAD 12,431) for a typical family home.

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Is It Worth Upgrading Your Electrical System Before Selling Your Home?

Upgrading your electrical system isn't generally worth it if your existing system is safe, is relatively new and meets your household electrical needs. Upgrading a modern electrical system that works well won't usually increase your home's value significantly, and you'll likely spend more on the upgrades than you make back when it comes to selling your home.

In this situation, you may be better off investing in other home upgrades delivering a higher ROI. According to the National Association of Realtors and National Association of the Remodeling Industry’s 2022 Remodeling Impact Report, the following home upgrades yield the highest average returns:

• Hardwood floor refinishing: 147% ROI
• Wood floor installation: 118% ROI
• Insulation upgrade: 100% ROI

On the other hand, rewiring or repairing your electrical system could be a sound investment if you notice signs of old or faulty electrical components. Old or worn-out systems often cause issues such as flickering lights, tripped switches or discolored electrical outlets. These issues can signify a fire hazard, so you should call a certified electrician as soon as possible. However, problems with your electrical system aren't always immediately apparent.

You could consider scheduling an electrical inspection to diagnose electrical issues that could make your house harder to sell. According to HomeGuide, an electrical inspection typically costs $100 to $200 (CAD 134 to CAD 268) and checks the safety and functionality of your system. If your inspector detects an electrical hazard or components that don't meet current electrical codes, upgrading electrical outlets or wiring could increase your home's value and make it more attractive to buyers.

If you're not planning to sell your home in the near future, certain electrical upgrades could be worth it if they make your home setup more convenient. For example, upgrading your electrical outlets or installing new ones could make your kitchen or living areas more practical if you're constantly hunting for a free outlet to charge your phone.

All CAD conversions are based on the exchange rate on the date of publication.