ENTIRE AC unit needs to be replace. Wiped out ALL cash flow ??

76 Replies

I just found out the AC unit needs to be replaced. The unit is 30 years old prior to the tenant being evicted it seem to work good. I got a quote from the ONE HOUR ac contractor and he said it'll cost 6k-8k to replace the Air handler, heat pump and entire wiring. This Cap EX is completely wiping out 1 yr of CF. What can I do ? Any suggestions \.

Feel free to get some more quotes, but that doesn't sound too unreasonable.  I recently got two quotes (one at $8k and one at $8.6k) to replace my air handler, condenser unit, and all the ductwork on my central AC system in my home.

It's just something you have to factor into your expenses. Like how you may set aside $X amount every month for CapEx, some months you may not have any costs at all, other months you may run into a big one. The good news is the new unit should last you a couple of decades.

Hello @Isiah Ferguson .  That is a big hit.

An AC system is made up of parts - outside compressor, interior air handler/blower, etc.  I would find out what "part" broke and see if you can't limit the replacement to that part of the system (for now).

Bob

If the unit is 30 years old its doubtful you'd want to try to get it repaired unless its something really simple. 6-8k sounds about right, but get a couple more bids and try to get closer to 6k. 

Originally posted by @Tyler Brown :

Feel free to get some more quotes, but that doesn't sound too unreasonable.  I recently got two quotes (one at $8k and one at $8.6k) to replace my air handler, condenser unit, and all the ductwork on my central AC system in my home.

It's just something you have to factor into your expenses. Like how you may set aside $X amount every month for CapEx, some months you may not have any costs at all, other months you may run into a big one. The good news is the new unit should last you a couple of decades.

 Absolutely. Should I get a brand new unit or should I get something used. It is a rental. I'm thinking brand new because of the warranties etc

Originally posted by @Isiah Ferguson :
Originally posted by @Tyler Brown:

Feel free to get some more quotes, but that doesn't sound too unreasonable.  I recently got two quotes (one at $8k and one at $8.6k) to replace my air handler, condenser unit, and all the ductwork on my central AC system in my home.

It's just something you have to factor into your expenses. Like how you may set aside $X amount every month for CapEx, some months you may not have any costs at all, other months you may run into a big one. The good news is the new unit should last you a couple of decades.

 Absolutely. Should I get a brand new unit or should I get something used. It is a rental. I'm thinking brand new because of the warranties etc

 Hard to say without knowing some specific numbers.  If you can get a used one at a huge discount, maybe even with a warranty, it would be something to consider.

However if a used is only 10% less than a new, then I'd say just go with the new.  Depending on the unit, you may be eligible for tax credits rebate incentives.

Originally posted by @Matt K. :

now just imagine this problem with negative cash flow property haha...

 then add two months vacancy and repairs from a tenant who trashed it...

Originally posted by @Joe Splitrock :
Originally posted by @Matt Katsaris:

now just imagine this problem with negative cash flow property haha...

 then add two months vacancy and repairs from a tenant who trashed it...

 and then 75% to the prop mgmt company for getting you a new lease haha. 

@Isiah Ferguson , The house is only 900sf, you can go with a couple of window units until you can get a price you like. Also you should consider a mini-split ductless system. You can order them online from www.alpinehomeair.com or acwholesalers.com. They are under $1500 and you can install 95% of it yourself if you are handy. You only need a tech to do the final pressure check, but even that is something you can do yourself. 

Originally posted by @Shawn M. :

@Isiah Ferguson, The house is only 900sf, you can go with a couple of window units until you can get a price you like. Also you should consider a mini-split ductless system. You can order them online from www.alpinehomeair.com or acwholesalers.com. They are under $1500 and you can install 95% of it yourself if you are handy. You only need a tech to do the final pressure check, but even that is something you can do yourself. 

 I think ductless will be the way to go. The unit is 900sq 2b/1b. If I place the Ductless in the living room, would it reach both bedrooms or do you think I should buy maybe 2 ?

Originally posted by @Jason D. :
Ductless units might be an option for you. For 900 sqft two small units or one larger may be enough

 Would the ductless be able to cool and heat living room and both bedrooms ? or should I place 1 in each of the rooms ?

One Hour Air is a franchise. They have a marketing budget, franchise fees, and generally higher expenses. You want an independent, investor friendly HVAC tech. 

"Investor friendly" generally means a company that specializes in working for construction companies, remodelers, investors and such. They typically have little overhead, don't do much marketing, show up in old pickups instead of late-model vans, and the techs may have limited English. That stuff is important to homeowners paying retail, but a smart investor will only care if the work is done well.

General rule for AC is 1 ton per 500sf of living space. So you need a basic 2-ton system. I can get those installed for under $3K in my area using my regular HVAC tech. His English is a little rough - he mainly speaks redneck - but his prices are good and quality of work is excellent. Ask other investors in your local market for recommendations to someone like that.

@Isiah Ferguson I agree with you and the others that you should get more quotes. I'm doing work in NYC and Westchester County and I pay 6500 on the average. Thats 95% HE gas unit installed with compressor and airhandler, ductwork. 

I think in NC you should be able to do better than my in NYC