Is a heat pump worth the extra money for a rental?

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

So my question is has anyone found Heat pumps to be worth the extra expense. So when you are having a house that needs a new Ac/heating system it cost extra if it comes with a heat pump. Heat pumps can save you some money on electricity in the winter. Here in South Texas area there’s not a ton of winter time.
Would it help retain a tenant longer? Is it worth the extra money that the landlord has to pay for the up front investment? My ac guy said units with heat pumps break more, but I Can not confirm that personally. We have a heat pump in our personal residence and it hasn’t broken.

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Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

Originally posted by @Scott Mac:

Hi Joe,

A gas/lLP forced air furnace would be my first choice for a SFH (but always an electric water heater if given a choice).

If the Line 5 pipeline is closed as expected, LP and NG prices are expected to double quickly (info from my supplier). Of course electricity will rise also because it is powered by fossil fuel, but not as much.

Might want to rethink that..... :-)

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Jody Sperling
Omaha, NE · Member since 2020 · 611 posts · 665 votes
4y
Setting aside questions of environmental impact, using generic for fixtures, capital expenses, and fittings seem to be the best for renters. There is currently a program out for solar that makes panels cheaper than grid energy, in my market, so I did have one of my rentals equipped with solar, however, even that was a financial equation. The data seems to suggest my house will be worth more with the panels if I want to sell or refinance.
Only get the heat pump if you think it can increase the value of the house. Otherwise, take the less expensive, reliable route. Best of luck!
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Joe S.Pro Member
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Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Jody Sperling:
Setting aside questions of environmental impact, using generic for fixtures, capital expenses, and fittings seem to be the best for renters. There is currently a program out for solar that makes panels cheaper than grid energy, in my market, so I did have one of my rentals equipped with solar, however, even that was a financial equation. The data seems to suggest my house will be worth more with the panels if I want to sell or refinance.
Only get the heat pump if you think it can increase the value of the house. Otherwise, take the less expensive, reliable route. Best of luck!

Thanks for the input. The property is a large two-story that will use a 5 ton unit. Which means the tenant will spend a little more electricity anyways. As far as making the property more valuable I don’t think that it would appraise for anymore if I ever sold it. However I do not plan on selling the property anytime in the near future. I’m curious if it would make that much of a difference in the power bill.
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Jody Sperling
Omaha, NE · Member since 2020 · 611 posts · 665 votes
4y
If you're not paying the power bill, I don't see that it makes a difference. A price-conscious tenant will find ways to save money, if he's worried about the bill.
Perhaps I'm just lucky, but my properties have attracted A++ tenants and all of them have subpar insulation, and oldish windows in a cold climate.
I hate when people say, "They're just renters," but I don't mind when we say, "We're running a business." For me, that means spending on the things that make a place feel like home: really nice bathrooms and kitchens, and saving on the things that make the home less profitable: stone coated steel roofs, hardwood floors and the like.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Weigh the cost of LP/NG in your area. Sometimes a heat pump system is a better deal. Don't take into account the 'environmental impact' so much. Electricity is marginally 'cleaner' but still gets 60+% of it's power from fossil fuels (gas and coal), so IMO that's not an issue.
Heat pumps are known for not working well in cold climates, I think 18 degrees is their cut-off......But being in S Texas, you will not get that cold, and the new heat pumps have a built-in secondary heat strip system. I just put in a 5 ton unit on my own residence, and it ran about $7500. A 5 ton FAU, blower and condenser are going to be pretty much the same cost.
I would think of it as an upgrade on a rental....we've had them in the past with no breakdown issues.....
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Maurice D.
Coppell, TX · Member since 2015 · 485 posts · 310 votes
4y
I have a heat pump mini split in my ADU in Dallas, works great. with gas prices set to soar this winter, I'm happy to have the option. quote it both ways to see if there is a price difference. you will save on the furnace part of the system and add a valve and some circuitry for the heat pump to the outside unit.
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Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
4y
Hi Joe,
A gas/lLP forced air furnace would be my first choice for a SFH (but always an electric water heater if given a choice).
Set it and forget it with a thermostat that kicks between A/C and Heat automatically (no need to switch over from one to the other).
When there is snow on the ground (to me) heat pumps are not cozy warm enough.
Just my 2 cents.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Originally posted by @Scott Mac:
Hi Joe,
A gas/lLP forced air furnace would be my first choice for a SFH (but always an electric water heater if given a choice).
If the Line 5 pipeline is closed as expected, LP and NG prices are expected to double quickly (info from my supplier). Of course electricity will rise also because it is powered by fossil fuel, but not as much.
Might want to rethink that..... :-)
2 Reply
Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
4y
Originally posted by @Joe S.:
So my question is has anyone found Heat pumps to be worth the extra expense. So when you are having a house that needs a new Ac/heating system it cost extra if it comes with a heat pump. Heat pumps can save you some money on electricity in the winter. Here in South Texas area there’s not a ton of winter time.
Would it help retain a tenant longer? Is it worth the extra money that the landlord has to pay for the up front investment? My ac guy said units with heat pumps break more, but I Can not confirm that personally. We have a heat pump in our personal residence and it hasn’t broken.

Joe, just commenting so you know I saw this. I don't know beans about heat pumps. I too am interested in the tech, and it's more important up here in western PA than it is down there, but I'm not still not ready to invest in it.

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Joe S.Pro Member
OP
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Jim K.:
Originally posted by @Joe S.:
So my question is has anyone found Heat pumps to be worth the extra expense. So when you are having a house that needs a new Ac/heating system it cost extra if it comes with a heat pump. Heat pumps can save you some money on electricity in the winter. Here in South Texas area there’s not a ton of winter time.
Would it help retain a tenant longer? Is it worth the extra money that the landlord has to pay for the up front investment? My ac guy said units with heat pumps break more, but I Can not confirm that personally. We have a heat pump in our personal residence and it hasn’t broken.

Joe, just commenting so you know I saw this. I don't know beans about heat pumps. I too am interested in the tech, and it's more important up here in western PA than it is down there, but I'm not still not ready to invest in it.

Once the temp drops below 20°F they become less effective. We have very few days here in this part of Texas that would see that can Temperature. Thanks for your input.

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Deanna O.
Rental Property Investor · San Diego, CA · Member since 2010 · 366 posts · 314 votes
4y
Depends on what your other options are. They do a pretty good job of covering both AC and heating though. Still a newer tech, but mini-splits have the distinct advantage of allowing you to heat/cool only the area you are using. Not the prettiest things in the world, but I think people are used to them now.
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Koel Gaylord
Rental Property Investor · West Lafayette, IN · Member since 2012 · 40 posts · 10 votes
4y
@Joe S. I have a heat pump and someone accidentally switched the thermostat to emergency heat. It must have been left on for weeks. The electric bill doubled. So keep that in mind for tennants.
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Joe S.Pro Member
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Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Koel Gaylord:
@Joe S. I have a heat pump and someone accidentally switched the thermostat to emergency heat. It must have been left on for weeks. The electric bill doubled. So keep that in mind for tennants.

So…… You actually just made a case for heat pumps. The heat pump uses less electricity Verses heating strips that is the normal heating method unless you have a gas furnace. For the heating portion on our thermostat the emergency heat does not come on unless the heat pump is failing as in it’s too cold outside for it to convert heat properly. It happened some during the big freeze that took place all over this winter. What I’m trying to say is without a heat pump the standard-setting is emergency heat for most units Even if it’s not called emergency heat.

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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
Heat pumps are fairly common here in the SE USA. I'm referring to the type that is basically an air conditioner that can be reversed and bring warm air into the house. Cost wise, they are about the same as a gas furnace with straight AC. Around here, a natural gas bill is about $45 per month with no usage (just all the fees and ready to serve charges). So if possible, we try to make our rentals all electric. Gas only makes sense if all the appliances use it.

In most cases, if you have a two story house, you would have two units, one for up and one for down. In some areas this is required by code. (or the system requires zoning capability)

So to answer the question, I would put in a heat pump if the electrical system of the house can handle it. (the power requirements are getting lower)

Regarding the maintenance costs of a heat pump vs straight AC, I'd agree they're higher but it's also doing heating duties.
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
What the OP may have is an air handler with straight AC and electric heat strips for heat. I had a rental property in the FL panhandle that had that set up. I went with a heat pump there because of the increased efficiencies and the cost difference wasn't that significant. The efficiency of heat pumps in continuously increasing as is their ability to operate at lower temps.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Assuming we are talking about the same system, I have a heat pump in one of my rentals on Vancouver Island. That is the only source of heating and cooling and it works well. I know of another person with a 2 story house (one unit up and one unit down) that has the same and also found it worked pretty well. For new builds with no ducts, I can see the heat pump being less expensive, but I still prefer forced air furnaces.
If you already have the duct work for your current system, just replace the unit and use the same one.
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y
What do you plan on using for heat in place of a heat pump....a coal burning stove?
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Joe S.Pro Member
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Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Russell Brazil:
What do you plan on using for heat in place of a heat pump....a coal burning stove?

You’re kidding right? Standard electric central heat and air comes with heat strips for heating. Heat strips use more electricity. If the air handler uses gas as a furnace instead of heat strips that’s a whole different story. For a little more money there would be an upgrade in the outside unit that came with the heat pump. Most of the central heating and air units that I’ve seen and used has an air handler inside the house and a condenser outside the house. The condenser outside of the house is what you can pay to have upgraded with a pump.
I’m getting the idea that a number of us posters are talking about two different things. Lol
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
So the refrigerant type heat pump (which I think some of us are talking about vs mini-splits, etc) use the same air handler. The outside compressor can reverse so instead of the inside evaporator coil getting cold (AC mode), it gets warm (heat mode). If it's not a heat pump, the outside unit only makes cold and there are electric heat strips in the air handler (think blow dryer) that are used for heat. To upgrade from straight AC with electric heat strips to a heat pump cost me a few hundred dollars. (it was like $4800 vs $5100 or something like that.). Most heat pumps (especially in cooler areas) also have heat strips in the air handler but they only activate if the heat pump has an issue or it's below the effective operating range of the heat pump. On many this is indicated as "emergency heat". The reason the maintenance is higher on a heat pump is that there's additional circuitry, reversing valve, and the compressor (outside unit) operates year round vs only in the warm months for straight AC.
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Joe S.Pro Member
OP
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @John Teachout:
So the refrigerant type heat pump (which I think some of us are talking about vs mini-splits, etc) use the same air handler. The outside compressor can reverse so instead of the inside evaporator coil getting cold (AC mode), it gets warm (heat mode). If it's not a heat pump, the outside unit only makes cold and there are electric heat strips in the air handler (think blow dryer) that are used for heat. To upgrade from straight AC with electric heat strips to a heat pump cost me a few hundred dollars. (it was like $4800 vs $5100 or something like that.). Most heat pumps (especially in cooler areas) also have heat strips in the air handler but they only activate if the heat pump has an issue or it's below the effective operating range of the heat pump. On many this is indicated as "emergency heat". The reason the maintenance is higher on a heat pump is that there's additional circuitry, reversing valve, and the compressor (outside unit) operates year round vs only in the warm months for straight AC.

I should’ve let you help me explain what it is to the world to start with. :-) You did a great job.
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Joe S.Pro Member
OP
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @John Teachout:
So the refrigerant type heat pump (which I think some of us are talking about vs mini-splits, etc) use the same air handler. The outside compressor can reverse so instead of the inside evaporator coil getting cold (AC mode), it gets warm (heat mode). If it's not a heat pump, the outside unit only makes cold and there are electric heat strips in the air handler (think blow dryer) that are used for heat. To upgrade from straight AC with electric heat strips to a heat pump cost me a few hundred dollars. (it was like $4800 vs $5100 or something like that.). Most heat pumps (especially in cooler areas) also have heat strips in the air handler but they only activate if the heat pump has an issue or it's below the effective operating range of the heat pump. On many this is indicated as "emergency heat". The reason the maintenance is higher on a heat pump is that there's additional circuitry, reversing valve, and the compressor (outside unit) operates year round vs only in the warm months for straight AC.

So John since you obviously know what I’m talking about would you pay for the small bit of difference in order to save the tenant some money on the electric bill?

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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
I probably would pay up to $500 or so more. I think it makes a relatively small difference if there's not very many heating hours per year. That info is probably available from the power company as they keep track of electrical usage by different appliances. One advantage of electric heat is that it's very simple.
Unless it's on a turnover, a conversation with the tenants may be in order as well. ie, would you pay $10 per month more rent to have a heat pump instead of electric heat? When I upgraded the unit in FL, the HVAC company talked me into the heat pump and as stated previously, the price wasn't that much more (I needed a whole system change out, not just the compressor.)
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Joe S.Pro Member
OP
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @John Teachout:
I probably would pay up to $500 or so more. I think it makes a relatively small difference if there's not very many heating hours per year. That info is probably available from the power company as they keep track of electrical usage by different appliances. One advantage of electric heat is that it's very simple.
Unless it's on a turnover, a conversation with the tenants may be in order as well. ie, would you pay $10 per month more rent to have a heat pump instead of electric heat? When I upgraded the unit in FL, the HVAC company talked me into the heat pump and as stated previously, the price wasn't that much more (I needed a whole system change out, not just the compressor.)

Thanks for the input. I am changing the whole system out. If I don’t do it now and I’m not gonna do it later. I am doing a rehab on the property so there are no tenants involved just yet. It’s a really big nice house in a very nice area so I’m going to push for top rent to start off with anyways.
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
Then I'd go with the heat pump.
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Account Closed
Member since 2020 · 983 posts · 1k+ votes
4y
A heat pump is basically an air conditioner system and when you want to use it for heat the refrigerants flow backwards. I've been using them for more than 40 years, never had a problem with one out of the ordinary and since you don't require much heat in Texas I think they are a perfect fit. As for the additional energy cost, your tenants need an ac for cooling, anyway, and since not much heat is needed the cost for heat is insignificant.
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Joe S.Pro Member
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Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Account Closed:
A heat pump is basically an air conditioner system and when you want to use it for heat the refrigerants flow backwards. I've been using them for more than 40 years, never had a problem with one out of the ordinary and since you don't require much heat in Texas I think they are a perfect fit. As for the additional energy cost, your tenants need an ac for cooling, anyway, and since not much heat is needed the cost for heat is insignificant.

Thanks Jack. If you and John would of explained it to the world sooner we would’ve gotten a little more input that was logical. Both of y’all did an excellent job explaining what a heat pump is.
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