Converting Oil Boiler to Gas?

Question

Has anyone converted an Oil furnace to Gas? I know you can swap out the pieces I see this in properties from time to time but do people still do this? If so what was your experience with it and do you have general idea on what the pricing would be?

A little background. We're working on a flip in Methuen MA, north of Boston, and we found out that the oil tank was leaking when we went to fill it. They wanted $4k to replace the oil tank. So we thought great we'll install 2 gas boiler systems and separate the heating, I'd done that before and it wasn't too expense. However every plumber seems crazy busy and the only quote we got that I trust, with permits, is $19,300. Since the only real issue with the furnace is the oil tank I'm think just convert it to gas and be done with it.

Thank you in advance for any responses or advice.

Best,

Jon

Tammy Mason · Answer

@Jonathan Bombaci a big portion could be what it takes to gas line to the house, if you already have a gas meter at your house, then the inside piping size may need to be increased to handle a furnace.

Dan K. · Answer

Look at Mass Saves. I currently have a 0% ten year loan for upgraded heat.

If you have gas on the street, you should be able to get the utility company to bring a line to your house for free if you use enough BTUs. We recently had a new line brought to a property for free.

Some Mass Saves discounts and grants are for off season upgrades. If you can limp through this winter you might do well.

Avery Heilbron · Answer

@Jonathan Bombaci I know @Lior Rozhansky has done this as well as seen some of the rebates come back from Mass Save which can be pretty sizeable. Maybe he can help

Matt M. · Answer

@Jonathan Bombaci

I did it at my old house in 2015. My HVaC guy swapped out the Beckett burner for a gas fired. Cost was around $3k

Alexander Szikla · Answer

Jonathan Bombaci If the $19.3k price includes the materials - that is actually quite a good price. I am dealing with this at one of my properties as well and it is a headache. But if you do this properly, it should pay off in dividends.

Quick math, if you were paying ~$400 per month in oil and now the tenants will just pay direct for natural gas via the utility company, that is $4,800 per year. The difference between the oil tank replacement and the natural gas conversion and separation is $15,300. That means you are deploying incremental capital at a 31.3% yield. Would you not buy a property with that sort of cap rate?

Moreover, this cash flow and the lack of an oil tank (potential future spills / remediation) takes out a significant risk factor. This should give you a significant boost on future refinances or sales.

Jonathan Bombaci · Answer

@Mark H. Porter yes removing the oil tank was about $500 the main cost of the $4k was bringing in the new oil tank and hooking it up.

@Tammy Mason Yes there is gas in the house already for water heaters, dryers, and stoves. I'm waiting for an invoice with a breakdown of the cost to see how much extra he's doing besides just the furnaces but the guy seems to think the plumbing inspector is going to make him change a lot of stuff at the property.

Converting Oil Boiler to Gas?

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