Replace roof and HVAC?
Investor · Cleveland · Member since 2022 · 13 posts · 8 votes
Replace roof and HVAC?
Most Popular Reply
Melanie P.Pro Member
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votesYes to the roof, yes to using one of the roofer insurance adjusters help you with the claim. We did 18 roofs this way before. Our premiums did go up but it was a half-million dollar claim. In our case we did have recent damage from severe weather but with PLENTY of wear and tear. As stated before do not sign a a contract with any of the roofers until the claim has been approved, you know what you're working with dollar wise and have some competing quotes. You can sign an agreement to use the roofer-adjuster provided their cost does not exceed your best price plus 10% of the claim payout (i.e. typical insurance adjuster rates). Once they get the claim paid a lot of these companies model is to fleece you on the roof.
I would not do the HVAC until it is totally dead. Totally dead to me means we've recharged it and it loses the recharge in the same season. Until that happens topping it up at the start of each year will add another 3-5 years life to it from when you first learn there's an issue.
40 Replies
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes2y
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
Materials are not 190 a sq closer to 100. Also when you're a big roofing co, they buy in bulk, (Just like we do with our furnace's, HW tanks and flooring). I bet there under 100 a sq. 30-year Architectual. On a 50 sq roof to have 450 gross. so 22k in two days, they are making much more than 4k. the 20% you mentioned. Either way we get it done for 250ish, MAX,
All the best
- Buckley Wa · Member since 2019 · 50 posts · 8 votes2y
Replace both. If anything the roof first. Think of it this way, if you have a roof leak, that could cost you tens of thousands later, vs a few thousand now (and it is at the end of its life anyway and in rough shape)
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes2y
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
Materials are not 190 a sq closer to 100. Also when you're a big roofing co, they buy in bulk, (Just like we do with our furnace's, HW tanks and flooring). I bet there under 100 a sq. 30-year Architectual. On a 50 sq roof to have 450 gross. so 22k in two days, they are making much more than 4k. the 20% you mentioned. Either way we get it done for 250ish, MAX,
All the best
I guess that laborers make minimum wage in your area , and the companies pay under the table and have no insurance . What do I know ? I must have been getting it wrong the last 40 years in construction . Sure the shingles run a bit over $100 a sq , but you need felt paper , drip edge , flashing , coil nails , misc supplies , delivery , disposal costs , labor , insurance , sales commissions , overhead , whats left is profit , and it it runs around 20% .
All the best to you .
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
Materials are not 190 a sq closer to 100. Also when you're a big roofing co, they buy in bulk, (Just like we do with our furnace's, HW tanks and flooring). I bet there under 100 a sq. 30-year Architectual. On a 50 sq roof to have 450 gross. so 22k in two days, they are making much more than 4k. the 20% you mentioned. Either way we get it done for 250ish, MAX,
All the best
I guess that laborers make minimum wage in your area , and the companies pay under the table and have no insurance . What do I know ? I must have been getting it wrong the last 40 years in construction . Sure the shingles run a bit over $100 a sq , but you need felt paper , drip edge , flashing , coil nails , misc supplies , delivery , disposal costs , labor , insurance , sales commissions , overhead , whats left is profit , and it it runs around 20% .
All the best to you .
SO, I had 3 guys for two days, let's say each are paid 200 per day, so 1200 bux. The GROSS was about 22k so how does that company only net 4kish ? Too many homeowners get ripped off daily.
3k for a furnace when the material is 800 and takes under 3 hours. We get them done for 1300.
All the best
- 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes2y
I definitely would
- 2yKristen HaynesBusiness MemberReal Estate Broker · Greater Charlotte NC and Charleston, SC areas · Member since 2017 · 109 posts · 60 votes
Definitely. Then, do an Engineering Based Cost Segregation study and get back some of that invested money back from the IRS (it's 100% free to see how much you could save). Here's more info:
It's very easy to have an 'Engineering Based Cost Segregation' study performed to see where you can get back some serious money, using your rentals, from the IRS (most CPA's don't have the education or experience to do this for you- you need to use Enginering CPA's). They're cheap to do, compared to the money that you would gt back. and these strategies can be used over and over again, with each property acquired or rental-renovated. Reach out to me if you would like more information, and we'll see how much cash we can get back for you to offset your losses and expenditures (100% free to do the study, then they give you the amount of the savings and cost to get that money back, and you then determine if you want to move forward).
There's also a FREE webinar discussing this tax strategy tomorrow, Wednesday May 15th, at 10 am PT / 1 pm EST that you may register for here (safe link): https://linda-b251e.gr8.com/
Best of luck to you! Kristen Haynes Realty Pros / Northstar Group
New Home Buyers Brokers / Realty Pros55 Reviews - 2yKristen HaynesBusiness MemberReal Estate Broker · Greater Charlotte NC and Charleston, SC areas · Member since 2017 · 109 posts · 60 votes
PS- ask a roofer to come out to see if, over the years, there is hail damage (with most older roofs, there are). You would then contact your Insurance company to make sure that you have coverage for a roof replacement, using just the cost of your deductible, not paying for the entire roof! They will send an Adjuster out, and, if hail damage is found, they will cover it for the cost of your homeowner's insurance deductible! And, yes also to the HVAC- worth doing if it is that old, depending on the size of the house, it may only be $5000 to $10,000, and the new ones that are energy-certified will give you a tax credit, as well- not to mention, these will also help you sell our property faster when it is time to sell, as these will already be 'done'- not to mention, the new HVAC system will save your renters money every month in energy efficiency!
New Home Buyers Brokers / Realty Pros55 Reviews - Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes2y
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
Materials are not 190 a sq closer to 100. Also when you're a big roofing co, they buy in bulk, (Just like we do with our furnace's, HW tanks and flooring). I bet there under 100 a sq. 30-year Architectual. On a 50 sq roof to have 450 gross. so 22k in two days, they are making much more than 4k. the 20% you mentioned. Either way we get it done for 250ish, MAX,
All the best
I guess that laborers make minimum wage in your area , and the companies pay under the table and have no insurance . What do I know ? I must have been getting it wrong the last 40 years in construction . Sure the shingles run a bit over $100 a sq , but you need felt paper , drip edge , flashing , coil nails , misc supplies , delivery , disposal costs , labor , insurance , sales commissions , overhead , whats left is profit , and it it runs around 20% .
All the best to you .
SO, I had 3 guys for two days, let's say each are paid 200 per day, so 1200 bux. The GROSS was about 22k so how does that company only net 4kish ? Too many homeowners get ripped off daily.
3k for a furnace when the material is 800 and takes under 3 hours. We get them done for 1300.
All the best
I dont see how homeowners get ripped off daily ? The homeowner is in charge of the price . A contractor submits their quote and the homeowner either accepts it or rejects it . Contracting is a business , the salesman is there to sell a roof to the customer for the most he can get . Thats called salesmanship . If that salesman can show the customer the benefit of hiring his company , then he is doing his job . there is no reason to leave money on the table . As long as the contractor completes the work according to the agreement , there is no rip off .
As a contractor I am there to provide a service and maximize profit to the company .
No different than me buying a house and flipping it for a profit . The goal is to make as much as you can .
- 2yAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
We normally change CapEx project when they are need to be changed, not sooner. It sounds like the roof needs to be changed but the HVAC doesn't. We normally run our AC's until they cannot run any more. Remember, that there is almost $0 ROI on rents when you change a roof or HVAC. Tenants normally don't care, they only want it to work, and will not pay extra for a new roof.
Bartomeo Property Management4.7150 Reviews - Member since 2024 · 1 post · 0 votes2y
Given the age and condition of the roof and HVAC system, it may be prudent to proactively replace them before renting out the property. While cosmetic fixes can improve the property's appearance, addressing major components like the roof and HVAC ensures the long-term sustainability of your investment.
By replacing these items now, you can potentially avoid future maintenance issues and tenant complaints, leading to smoother operations and increased tenant satisfaction.
Additionally, with access to cheap financing and the potential for a favorable appraisal after the upgrades, investing in these major expenses upfront could enhance the property's value and your overall return on investment. - Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2y
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Matthew Paul:
Quote from @Bob S.:
Quote from @Dan Frehmeyer:
I am currently rehabbing my primary at the moment with plans to rent out this fall. I am doing mostly cosmetic fixes to a SFH currently.
I am looking for thoughts on whether I should be proactive with replacing a 20yr+ old roof (missing shingles, multiple layers, looks terrible) and a 25yr+ old hvac. The water heater was replaced a few months ago.
I have access to very cheap money so my thought is to be proactive with those major expenses before I turn it into a rental. The property will still cash flow with the extra cost of these expenses. Additionally, the house will likely appraise very favorably after as well with a cash out refi a big possibility
Thoughts?
YES replace the roof, about 250- 275 a sq depending on pitch. YES replace the furnace, 1800ish, ASSUMING is about 1k- 1500 sq ft house
Boy things are cheap where you are . roof is $450 to $600 a sq depending on pitch here in Maryland
I know I paid $550 a sq ( 55 sq OUCH) when I lived in SC, total rip off, Material cost them about 100 bux a sq, 450 a sq profit for two days, Not a bad gig.
Materials are more like $185 a sq . Labor is not cheap , workers comp for roofers is crazy high , add in dump fees . Profit to the company after all that is around 20% . Not 450 a sq
Materials are not 190 a sq closer to 100. Also when you're a big roofing co, they buy in bulk, (Just like we do with our furnace's, HW tanks and flooring). I bet there under 100 a sq. 30-year Architectual. On a 50 sq roof to have 450 gross. so 22k in two days, they are making much more than 4k. the 20% you mentioned. Either way we get it done for 250ish, MAX,
All the best
I guess that laborers make minimum wage in your area , and the companies pay under the table and have no insurance . What do I know ? I must have been getting it wrong the last 40 years in construction . Sure the shingles run a bit over $100 a sq , but you need felt paper , drip edge , flashing , coil nails , misc supplies , delivery , disposal costs , labor , insurance , sales commissions , overhead , whats left is profit , and it it runs around 20% .
All the best to you .
SO, I had 3 guys for two days, let's say each are paid 200 per day, so 1200 bux. The GROSS was about 22k so how does that company only net 4kish ? Too many homeowners get ripped off daily.
3k for a furnace when the material is 800 and takes under 3 hours. We get them done for 1300.
All the best
I dont see how homeowners get ripped off daily ? The homeowner is in charge of the price . A contractor submits their quote and the homeowner either accepts it or rejects it . Contracting is a business , the salesman is there to sell a roof to the customer for the most he can get . Thats called salesmanship . If that salesman can show the customer the benefit of hiring his company , then he is doing his job . there is no reason to leave money on the table . As long as the contractor completes the work according to the agreement , there is no rip off .
As a contractor I am there to provide a service and maximize profit to the company .
No different than me buying a house and flipping it for a profit . The goal is to make as much as you can .
I agree with Matthew, you are a for-profit business and the market sets the price. Calling it a rip-off is a bit harsh. However, $550/SQ is also a bit steep for investors (at least here in Milwaukee). We call that subdivision prices and we'd go broke if we pay the same.
But my contractors don't have to pay a salesman, we always have multiple jobs, we are easy to work with, I am not getting 3 estimates, I am not negotiating with them and I don't call them back to take care of some BS warranty.
We have worked with most of our trades for many years and we take care of each other.
- WorldWide · Member since 2016 · 1k+ posts · 1k+ votes2yif hvac is really, really old, you could try shopping a "home warranty" that doesn't have hvac caps and exclusions and just get it for "systems." i know AHS used to offer those a while back, but even they started capping to to 3k or something silly. Not sure if there are any other ones that exist these days with no caps.
- Contractor · Richardson, TX · Member since 2022 · 265 posts · 146 votes2y
(from a Roofer!) Dan, no one will know the exact condition of the roof and/or HVAC other than yourself, because you are there!
I'm surprised that your insurance carrier is still covering the property though with the roof being that old. "That" alone (the age of it) may come into play soon, as most ins co's are getting very tight on the coverages and policies.
Without seeing it, but knowing the climate, I would lean towards replacing the roof ... with a decent but not high end product. (shingles?) Here in Texas, most people wait until a storm knocks the roof out before replacing it. That could be 20yrs, or at times here it is every 4-7yrs! (seriously!)
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