Landlording & Rental Properties

4 Things to Consider When Buying a New Central Air Unit for a Rental

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Personal Finance, Real Estate News & Commentary, Business Management, Real Estate Deal Analysis & Advice, Real Estate Marketing, Mortgages & Creative Financing
103 Articles Written
man on ladder installing air conditioning unit in ceiling opening

Central air conditioning is something you take for granted until it stops working. As a landlord, one of the worst maintenance requests you can get from a tenant—perhaps other than flooding—is a call about broken HVAC. And when it's time to replace the unit, the money can add up. What's the smartest and most cost-effective solution?

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4 Things to Consider When Buying a New Central Air Unit for a Rental

In most climates in this country, AC is an expectation for tenants. And even in areas where AC isn’t a requirement, having a system in place can greatly improve your ability to attract tenants. But what happens when the AC goes out in one of your rentals? At the very least, it can be frustrating. In most cases, it's downright uncomfortable and aggravating.

When it comes to replacing an AC unit, you don’t want to take the decision lightly. It can be expensive, and it’s imperative that you do your research and carefully weigh all of the options.

closeup of thermostat and hand

1. Type of System

The first thing you'll need to do is figure out what kind of system you want. (In all likelihood, the decisions will be made for you.) In most regions of the country, forced air systems are common. These systems typically operate on natural gas, though some do run on electricity.

Additionally, you’ll want to find out what size you need. Depending on the square footage of your home and some other factors—such as the types of windows you have, the ceiling height, and the climate—you could need anything from a 2- to 4-ton unit.

Related: 4 Home Improvement Jobs You Should ALWAYS Hire Out

2. Brand Name

There are some industries where brand name is nothing more than a superfluous detail, but AC units aren’t one of them. Brand names carry significant weight here.

“As you’re considering which brand to go with, it’s best to take a deeper look into the unique characteristics of each brand to determine which option is optimal based on your unique needs,” FilterBuy explains. “From there, you can break down the pros and cons of each to figure out which brand offers the best value.”

3. Warranties and Service Agreements

Warranties and service agreements can be quite important when it comes to installing and maintaining an expensive AC unit. Most AC manufacturers will offer warranties on parts ranging from 5 to 10 years, while a good HVAC service company will offer a labor warranty for a few years. In most cases, you'll have to agree to have them come out and service the system once or twice a year, but you should be doing this regardless.

Woman relaxing on a couch with copy space above

4. Passing Costs Along to Tenants

Because a new AC unit and all of the work that goes along with it can cost thousands of dollars, many landlords with tight cash flow look for ways to pass some of the cost along to tenants.

Related: 5 Tips for Assessing an HVAC System When Buying a Home

If your rent is already at the bottom of the market—or you’re in a hot market where you can easily find new tenants—you might consider a small increase in rent next time that option becomes available. A 5 to 7 percent increase is small enough that it probably won’t make a tenant move, but big enough that it’ll allow you to recoup some of the cost over the next couple of years.

Make the Right Choice

If you make the wrong choice when buying an AC unit for a rental property, you’ll suffer through the negative ramifications for years to come. The breakdowns, repairs, and inefficiency of the system will keep you awake at night and burn a hole in your pocket. Make a sound decision on the front-end—even if it means spending a little more—and you and your tenants will be much happier and more comfortable over the long haul.

What has your experience replacing AC units been? Any questions?

Leave your comments below!

Larry is an independent, full-time writer and consultant. His writing covers a broad range of topics including business, investment and technology. His contributions include
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    Stephen S. Wholesaler from Holiday, Florida
    Replied almost 3 years ago
    You left out The Most important consideration. Which is the quality and integrity of the installing contractor. The name of the equipment means essentially nothing and by comparison to the quality of the contractor; means nothing. The HVAC industry is quite homogenized – with manufacturers almost entirely sourcing materials and then simply assembling equipment. Motors, compressors, controls, etc. – almost all off-the-shelf items from standard parts manufacturers. The brand name is not at all indicative of the quality of the end result installation And you left out the second most important consideration: which is that an accurate heat / loss gain measurement and calculation be properly done by someone who knows how. Without this everyone involved is just assuming – and we all probably know the dissection of That word. Almost all installed equipment is oversized. Why? Because the customer never knows and the contractor never gets blamed if he guesses wrong too-big. The too-large system beats itself to death, doesn’t heat or cool well, costs more to operate and maintain, and often costs more initially. Whereas if he guesses too small – the first hot or cold day comes and the customer is screaming. The least expensive equipment installed by a qualified and caring contractor will Always be better than even the very best equipment installed by the stupid and worse; the uncaring. Forget the price – find the contractor who can do the job properly first. There is no more important link in this chain. Buying an installed HVAC system is nothing like buying a car or an appliance – where everyone is selling you essentially the exact same thing. This new system’s quality and performance is Being Custom Built for you – by the installing contractor. stephen ————–
    Freddy Guillemi Investor from Port Saint Lucie, Florida
    Replied almost 3 years ago
    Great Stephen. As contractor I’m totally agree w you.
    Marc Well from Tampa, Florida
    Replied over 2 years ago
    Excellent article, thanks LARRY. A brand with significant weight is Goodman.