How do you handle tenant AC costs?

Question

Tenants love to crank AC systems to absurdly low temperatures which creates a high likelihood of breaking the AC unit. In my area HVAC techs charge $1000s just to look at the unit after it breaks. I have a 3 year old unit that cost me $10,000 to install that may need to be replaced soon because of tenant shenanigans. At these numbers HVAC repair breaks down to $2000 cost per year on average to replace a $10k unit every 5 years.

How are you managing AC systems? Do your tenants have access to thermostat? Do you have a set temperature limit? Or somehow deducting from deposits the constant AC repair costs?

How are you managing AC systems? Do your tenants have access to thermostat? Do you have a set temperature limit? Or somehow deducting from deposits the constant AC repair costs?

Bill B. · Answer

You need new ac techs, it shouldn’t cost $200 to have a unit looked at. You need a new ac installer, no residential unit should cost $10,000. You need a different ac brand, it should definitely have a better warranty and a longer life.

I assume Vegas is just as hot as your part of Texas and an expensive ac unit is $6k. A unit that dies fast is 15 years. 80% of repairs are caps for $250, 15% are $500-$750 motor/compressor/etc.

I would never tell tenants what temperature to keep their home at, even if it was legal. What’s next, telling them how many flushes per day?

Mason Liu · Answer

Personally, I just communicate with my tenants that we keep the HVAC (in florida so rarely need the furnace) above 68 degrees at all times, and that it is best to keep the HVAC above 74 degrees during the hotter afternoons where the ambient temp is in the 90s. From then on, we just set minimum temperature of the HVAC at 68 degrees via the smart thermostat. Normally the tenants understand.

If you're having consistent issues with a tenant abusing the HVAC only (if they are abusing other items then it may be helpful to find a new tenant), I know some HVAC companies offer an annual plan with a certain number of visits per year at a flat fee. During these visits, the HVAC technician can not only make sure the HVAC is working well 2x per year, but also educate the tenants on how to take care of the HVAC. That may help too.

Richard F. · Answer

Aloha,

While associated fans may be multi-speed, the actual "cooling" mechanism- compressor, evaporator, condenser, coolant lines and controls, are not. The only action controlled by the temp setting, is the length of the cooling cycle. No typical AC can lower the temp more than about 15 - 20 degrees below ambient, regardless of how long it runs. If your systems are failing, I would be looking at your preventative maintenance process. Are BOTH the condenser and evaporator being cleaned often enough based on local environment? If the condenser is getting choked with seeds, leaves, and other debris, that will severely limit the air flow which actually can lead to overheating of the system. Often, units that are sitting on grade will see deterioration of the cooling fins, due to animal urine or other contaminants, and physical damage, both of which affect performance. Evaporator coils can also become clogged over a long period, also reducing air flow and adversely affecting the system.

You do not state what is actually "breaking" with your systems, but AC's generally last longer than many other appliances when they are properly and regularly serviced. You simply cannot rely on Tenants to accomplish this. Even for window AC's, pulling them out and thoroughly washing them at least annually will prolong their life, unless you are buying the very cheapest units. Hard to tell from here, but your prices seem very high, although I do understand that "emergency" service during the high heat season will cost dearly...

As LL, appliances, including HVAC that you have provided in working order, you need to repair or replace as needed unless local law AND your Rental Agreement state otherwise, obvious misuse/abuse excepted.

Gil Wildridge · Answer

You have several solutions. First thing I'd do, though, is get new AC people. They're overcharging you.

Second thing I'd is make sure changing filters are the tenant's responsibility in the lease and communicate that to them. Tenants should be paying for electric and gas in any case.

Third thing: make sure that you're scheduling tune-ups, once in the Spring and once in the Fall. Those can catch issues before they happen.

I would not open myself up to the liability of temperature settings. With weather getting more and more unpredictable, it just seems like something a tenant could complain about that, even if you didn't do anything wrong, could land you in hot water.

Kar Sun · Answer

Buy a thermostat with a pre-set temp range. problem solved.

William Powell · Answer

My friend

First thing, imo $1000 just to look doesn't sound fair. That's probably "phone book". I suggest getting recommendations from other investors. Second, communicate with your tenants and handle the problems as fast as possible so you can go back to watching Banaza or whatever leisurely activity you are doing. If you have tenants that aren't happy with that, move on from them when the lease is up. If you have a tenant that is purposely trying to hurt a unit they are on their way out anyways. I've been there too but all my tenants control their thermostats. All things being equal, a 3-year-old unit should be problem free if it was installed right.

Alan Asriants · Answer

In my leases tenants are responsible to pay for their own utilities and change air filters. I would educate the tenants on why certain practices of the unit might cause it to break. Educate them, give them time to remedy their mistakes. Gently let them know that if they continue to use the HVAC in this manner and it causes the unit to fail, they will be responsible for replacing it due to negligence. I would give them an example - if you have a garbage disposal and they clog it because they are putting too many things down it, its not the landlords or garbage disposals fault.

Nathan Gesner · Answer

Educate the Tenants on how A/C functions. Cranking it down too far doesn't necessarily make it colder and it could cause problems, as you have suggested.

You can also consider installing a thermostat that has a limit on it. For example, I believe Nest and Ecobee digital thermostats allow you to put a low/high floor on the temperature so tenants can't put it below or above a certain temperature.

Finally, your lease should include a clause that says tenants are responsible for repairs if they abuse or neglect the property. If the repair tech has evidence the tenant has abused the system, then charge them for it.

A/C systems do not fail in five years without some serious abuse.

How do you handle tenant AC costs?

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