Would you buy a duplex with no central air system?

Greenwood, IN · Member since 2018 · 13 posts · 3 votes

I'm interested in a duplex in my area, but there is no central air system installed in the home, and the heat is baseboard electric. My initial reaction is to be concerned that window A/C units may not be satisfactory for the long term holding of this property, but I have no idea how much money it would cost to install a new system down the road. Right now the tenants in the home pay their own electric, which covers the costs of running the window units. The numbers work well for this property, but I'm wondering if anyone has any experience with properties that have similar air conditioning and heating systems, and if any issues have come out of it.

I appreciate everyone's help!

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Danny Allegra

Rental Property Investor · Santa Clarita · Member since 2018 · 22 posts · 17 votes

You may want to look into mini-split systems

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Danny Allegra
Rental Property Investor · Santa Clarita · Member since 2018 · 22 posts · 17 votes
8y
You may want to look into mini-split systems
6 Reply
Gabe Hall
Woodinville, WA · Member since 2018 · 37 posts · 18 votes
8y
Yes that's what my duplex has. Like you say, it's great because it all feeds into the electric which is separately metered.
Depending on your BTU needs, you can get a new wall AC unit for $300. They can easily last 15 years if they are operated well.
FWIW, having baseboards and wall units is great, but it clearly puts you into C class territory.
1 Reply
Amy Beth
Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
8y
I think it depends on your market. If there are a lot of rentals whom use window AC units it should not be an issue in finding tenants. However, If in your area you are one of a few rentals without ductless or central AC you will have a problem long term attracting desirable tenants. I would look online to see how common this is in your area with rentals.
2 Reply
Chris Kelch
Rental Property Investor · St. Joseph, MI · Member since 2016 · 23 posts · 21 votes
8y
I've rented in a few markets where window AC units are the standard. However, even if this is the case, central AC may give your property an edge over the others.
Pricing can very widely depending on your area, layout of your duplex, size, etc. If you decide it's worth it considering your market / predicted rent / renters then I would do some research to cost it out and/or get quotes and factor that in as either an immediate repair cost or a future capital expenditure.
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Mike McCarthy
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
8y
I completely agree with @Amy Beth. Depends on your market.
I looked into installing central AC into one of my SFH properties, and despite the $5-15K cost, it could only increase monthly rents $50, maybe $100/mo. People would like it better of course, but it wouldn't bring in the next-level rent. Not worthwhile.
4 Reply
Brad Carrier
Lexington, MI · Member since 2014 · 92 posts · 29 votes
8y
Central AC is always more appealing but depending on the market you might sneak by with providing some used window units. I'm in Michigan and everyone loves central but lots of houses have window units. They're cheap to buy used in the winter. Two 10,000btu units would cool a 1000sqf unit acceptably.
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Kurt PhillipsPro Member
Realtor · Lancaster, OH · Member since 2017 · 163 posts · 120 votes
8y
Bids are free. Start calling around the HVAC companies or gather some numbers of guys that run a solo business. Get 3 or 4 quotes for a job and that will help you make the decision. Obviously go with what several post have suggested that it depends on your area. But if its going to kill your return then hold off at the beginning.
In my area not have central air is no big deal. We only use AC about 4 months of the year anyway.
2 Reply
Paul B.
Rental Property Investor · Dallas, TX · Member since 2015 · 501 posts · 504 votes
8y
Here in Texas you absolutely need it....but that’s Texas. I grew up in Boston without any AC, not even a window unit, and my folks to this day still don’t have one. A central AC unit is one of the more expensive items to replace and repair....if the climate in your area, plus the demographics renting your property, allow you to get away with it, then there are advantages to putting the responsibility on your tenant to buy and install a window unit, and you already said they pay for electricity. It really depends on the expectations of your target demographic, and what your competition is offering. I bet the time of year would make a difference too. If you are walking prospects though in July, and it’s hot in there, and then they tour a place that’s nice and cool, you’ll lose out. If your place goes vacant in winter it may not be a factor at all.
2 Reply
Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
8y
We dont have central AC in any unit or home in the northeast. We will store thier window AC but we dont provide them. More important in your case is the electric basebord. What is common in your area? Tenants dont like the electric baseboard cost here. Minisplits are more cost effective from what I understand and might improve heat costs as well as provide Ac. Dont forget to include the cost of any electric upgrades.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
8y
How necessary is A/C for Indiana?
I live in a "high-desert" area where the humidity is low and the evenings cool off nicely. Air conditioning is nice but over half the homes don't have it and get by just fine. Having A/C makes the home more rentable but it doesn't bring in enough extra rent to justify the expense.
Split A/C may be a great alternative but I would recommend focusing on proper insulation, good doors and windows, and then letting the tenants use their own window units.
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Christian Hutchinson
Investor · Detroit, MI · Member since 2014 · 360 posts · 354 votes
8y
buy some windows units to start, after 3-5 years upgrade to central air.
go up on each unit $50/mo too
1 Reply
Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
8y
Central ac is $6K each provided you have the air ducts. So window AC is a cheaper choice.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
8y
I've lived in Illinois, and AC was a must for me. I wouldn't even look at a house that didn't have it. Unless the house is a smoking hot deal where you can add AC in later, you're looking at difficulty finding tenants at every turnover, and you'll have turnover every year.
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Karl Hadley
Investor · New York City, NY · Member since 2017 · 65 posts · 32 votes
8y
Like most have said, it depends on your market & how often they're really needed... I have window units installed in 3 or my 4 properties in the Cleveland area, I've had one or two folks walk away when renting because there wasn't central AC but in the end, I've not had any issues renting out the units to qualified tenants.
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Matt Vezina
Rental Property Investor · Bennington, VT · Member since 2017 · 79 posts · 60 votes
8y
What is the precedent in your market, when you browse rental listings do many of them advertise central air? Around here I wouldn't even consider it. Very few houses have central air and hydronic baseboards tend to be the common heat source so often there isn't even existing duct work to add it to.
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Alex Young
Flipper/Rehabber · O'fallon, IL · Member since 2018 · 67 posts · 28 votes
8y
had the same question, thank you for asking and thanks to those with good answers
0 Reply
Vaughn Smith
Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
8y
@Sean MurphyI wouldn't pass on the deal if the numbers work well and meet your financial obligations. You can purchase the units and factor the HVAC upgrade into your rehab costs (especially helpful with a rehab loan where you can amortize the expense into your monthly mortgage payment) or you can wait until you have enough money saved from the cashflow on the property and upgrade the systems then. Just my $.02
0 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
This reallt depends on the area. I’ve got one rental that doesn’t have AC. It’s in the Midwest and it’s a C class rental. It’s not uncommon to not have AC. I’m buying another one right now that doesn’t have central AC. This one is in the south and has window units. I’ll probably add central AC at the next turnover. The cost I’ve been quoted for this is 2-3500, which seems much lower then what others are expecting
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Kenneth Soles
Investor · Hunker, PA · Member since 2015 · 40 posts · 17 votes
8y
Definitely depends on your market. I own a (two) one bedroom unit duplex for the last 12 years with the same setup. I have had previous tenants move out and just leave their window units so I offer them as a convenience to the new tenant with the understanding that if they break I won't replace it. I have never had a problem finding quality tenants. One thing nice about the baseboards is they are virtually trouble free since there are no moving parts. I have only replaced one since I've owned it.
1 Reply
Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
8y
of course if the price is right . If not you through a. couple wall units in not a big deal. If you want to put central air in it should only cost between seven and 9000. And this will increase the value was well. Good luckl.
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Jeremy Simpson
Seal Beach, CA · Member since 2018 · 9 posts · 2 votes
8y
It depends on what's common for the market. We have properties in some of the south eastern states and central HVAC is a must in those markets. We also have property in southern CA and for markets closer to the ocean there it is more common to not have HVAC systems.
Consider adding the cost of doing the improvement to your evaluation. Central HVAC units will cost between 7k-10k. Overall the addition should increase your property value. A good unit will last 15-20 years if properly maintained. Evaluate what it would cost in your market and whats common in the market and decide if its still a great deal for you.
It sounds like the current tenants seem fine with the current systems. Always awesome to have flexibility and options. Best of luck.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
8y
Having central air is always a bonus but it whether or not it's a deal breaker for you to invest in or not will depend on your market competition. For example C-class duplexes without central A/C are the norm here in the Cleveland market so it would never deter me from buying one of them. However in the same market B-class Single Family Homes need to have central air to command rents above $1,000 and keep tenants in them long term.
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Tyler Mullen
Investor · Kirkland, WA · Member since 2017 · 310 posts · 271 votes
8y
Not only would I buy a duplex without central air, I did. One unit has a wall mounted gas heater like nothing I've ever seen and the other unit has a free standing gas fireplace. As others have said, it's totally deal specific.
I will either sell or tear down and rebuild so my heating/cooling is just a temporary issue and didn't even register on my list of concerns because the location and the price was just too good. If you're holding for long enough though it might be worth it to look at the mini split systems, I have family members in Yakima and in India that love them.
1 Reply
Jim C.
Investor · IN · Member since 2012 · 263 posts · 168 votes
8y
It all depends on the rents. If rents are < $1000, window unit are the norm for my area. If $1000, then I would consider split-units or central air if you can get the duct work to fit into your units.
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Stacey Paulin
Investor · Atlanta, GA · Member since 2015 · 139 posts · 98 votes
8y
I'm working on a deal like this now. It's a duplex with no central air. I'm going to install mini split ductless systems. Here in the south you have to have AC. The deal is good so it's worth it. As usual, the answer is it depends. Market, rents, location, budget, demographic demands will all play a role. Good luck.
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