First Home- Electric heat in Northeast?

2 Replies

I am making an offer on my first home that I plan to use as an owner occupied rental.

It is a 3 unit building in downtown Albany, NY. The three units are as follows: 

-Basement studio leased for 550

-1 bedroom appt leased for 650

-2 bedroom appt leased for 950 (I intend to live in this unit)

So total rent coming in would be $1200 plus $400 or so more if I rent one of the bedrooms to a friend.

I am offering $130k and financing through an FHA with seller concessions, making the monthly payment $1,256.

I think this is a good investment, as I will cover the mortgage while there and can fully rent it down the road and net ~$900/month.

My main concern is that there is electric baseboard heat in all units (separately metered). Some people have advised me that in cold upstate NY winters this is a deal breaker, as renting will be difficult with huge utility bills. Gas is not run to the building, so converting would be cost prohibitive.

I would plan on ordering an energy audit and insulating any problem areas to help control costs, but not sure how much this would really help. Does anyone have experience working with electric heat in cold climates? Is this really a deal breaker?

Any advice is greatly appreciated!


  Winters do get cold here -20 to -30F can hold for a couple weeks, this is rather extreme example, however you should be ready for it anyhow.

  You should find out what kind of electric heaters are those, people told me that newer versions are a lot more energy efficient.  Do some research.  Call Niagara Mohawk and ask them what the tenants have been paying past winters.  That should give you a decent idea.

  I myself stay away from houses heated by electricity, it doesn't sound very appealing to renters.  Connecting gas to house is ~3K I think ...

  Anyhow hope this helps at least a little bit.




Electric can get very expensive, and will absolutely scare a portion of of tenants. But i dont think it will leave you Vacant, You will likely get a lot of turn around however. There are very few places in Albany where gas is not available, its just a matter of installing it in the building and the demo along the way (usually the worst part).

Energy audit may help identify some improvements but they will still be additional investments into the building to fix what they find (not always smart since the tenants are reaping the rewards) and it just comes out of your cash flow which is already very lean. Not to mention older building can come with some extra constraints making some thing not even possible based on whats existing.

I would also consider waiting to make any investments in energy improvements, And get some low income tenants then using state money to get the repairs done for free. (YES they go by your tenants income not yours)

Let me know if i can help,


(disclosure I am Full time Energy Auditor & Part time investor)

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