Electric vs Heat Pump vs Gas

12 Replies

Hi everyone

This is my first post, so I hope that it's in the right place!

My wife and I are buying a duplex, to live in one side and rent out the other side. This will be our first home, and in a few years we plan on moving to something else and renting both sides. 

We live in Indianapolis, Indiana, and our property is less than 2 miles from downtown, so we are hoping to attract renters who are young professionals like ourselves.

The home will require a complete rehab, which won't be cheap. It will require all new HVAC, so I am trying to decide which system is best, and where the line is between being efficient but also initial cost.

My choices for HVAC are as follows:

-All electric furnace with heat pump 

-95% gas furnace with heat pump

-95% gas furnace with 15 SEER AC unit

Which system do you think is the best choice, considering we will be living in the property for up to 5 years? Are there any other options? I do want to have lower utilities for the tenants as well, so I can charge a little more ($50-$100) per month, based on the fact that the units are energy efficient (we are also adding insulation, LED bulbs, efficient toilets, shower heads, hopefully water heater, etc).

Right now I am looking at just under $9000 per side, but I talked to the HVAC guy and he had different numbers than our contractor did, so I am getting new quotes from him.

Thanks, and please don't hesitate to ask questions/give feedback.

Mark

Gas is the way to go in the long run; especially in a colder place like the midwest.

Those electric ductless AC/heatpump units are great for small spaces or fitting in additions, but If you're doing a complete rehab, I would go with gas, as it shouldn't be an issue fitting it in.  

I'm not sure on the heat pump vs SEER AC.

Utility rates will vary depending on location. For us, we prefer natural gas for the furnace, hot water heater, and range. Forced air is the way to go to prevent stagnant air build up and to prevent mold/moisture problems. Gas ranges appeal to gourmet cooks and less to households with young children because the knobs are on the front. 

Of course you can't steer prospective tenants one way or another and you must consider a variety of households, not just young professionals. If what you provide appeals to young professionals, with or without children, then you will likely attract those applicants.

I think you are on the right track by choosing systems and materials that will conserve energy. When prospective tenants view our properties I always point out the energy conservation details. Most will notice windows, but not think of other components.

I would go with the Gas/AC option. I am located in northern Indiana and I had a rental with a electric heat pump and it always seemed to have something going wrong with it. Also I feel like the AC combo could be something that could be very beneficial when you are trying to market the home for rent or for sale on down the line. I usually use Goodman Brand they seem to have the most reasonable pricing in my area. Good Luck!!1

Is there ductwork already in the building? I have redone the hvac in three different properties in northern MN and each required different systems. The last one I did was actually my primary residence where I put in two Mitsubishi hyper heat pumps 1.5 ton each at each end of the house. These work down to 16 below zero and have A/C in the summer time all without duct work. I have two of them for my whole 1800 square foot single story house as my primary heat and it works really well and cheaper than natural gas.

If you have natural gas you will likely have to have two separate duct systems and two furnaces to split the gas bill. This is what I had to do with my duplex. In retrospect I wish I would have just done two mini-splits with two baseboard back ups for when it was below -17 degrees.

Thanks guys! Is a hear pump considered forced air? 

The Mitsubishi system seems interesting, but it's ductless? Anyone know if they make a conventional heat pump that goes that low?

The building has gas lines in the kitchens, but in not sure about the basements. 

 I specialized in heat pumps (NATE certification in Heat Pumps) and serviced and installed any kind of gas furnace or air conditioner you can think of ( for 8 years) before moving on to real estate.  I am copying and pasting what I just wrote in another thread. I hope this helps!

..............

 Ductless heat pumps can have up to 8 indoor units connected to 1 outdoor unit and are super efficient. I priced out what it would cost to zone out my personal home with a ductless system. For the outdoor unit, 6 indoor air handlers and other supplies (cable, copper,etc), it was over $7500 in supplies alone.

I installed a regular heat pump instead with a 20KW electric coil for emergency heat. That cost $1500. Now, I did the labor so that is why it was under $2000 for everything.

As far as a cost comparison between electric and gas, electric is WAY more. Over time, using natural gas will hands down save you every single month!!!

Example:

Heat is measured in BTU's

Electric baseboard or space heaters $35.13 / per 1,000,000 BTU's

Natural Gas                   $10.02 / per 1,000,000 BTU's

Heat Pump                    $14 / per 1,000,000 BTU's

It is 3.5 times as much multiplied by every month you are paying to heat the property.

Here is a free calculator offered on the Department of Energy's website:

http://www.eia.gov/tools/faqs/heatcalc.xls

I just wanted to make you aware of your options and any necessary information before taking on that monthly expense.

Also, with a central system, you control it (WiFi Stat). You will not have it set to 65 in the summer and 78 in the winter.

Lastly, gas line is very cheap to buy, black pipe is super cheap, but flexible gas line is super easy to run ( Gastite* or TracPipe* are the two main manufacturers). Do not let that deter you from paying 6 times more a month. Going from electric to gas alone will save you 350%, add in the fact you can control the heating and cooling from your smartphone for an extra $150, that could be another 300% savings.

I hope this helps,

Jonathan

Where you are located you are going to want to have gas & an AC unit. Heat pump is basically an AC unit that works in the winter, absorbing heat from outside and bringing it inside through the same principle that the AC system works on. It is crazy efficient at heating but only at moderate temperatures; once you start dropping below freezing you need backup, which in a heat pump is some type of electric coil system (like a baseboard heater), and that is really high electricity use. Down here in the South you see heat pumps everywhere, because it just doesn't get that cold, nor for very long. 

Here in the desert we frequently see heatpumps, but there is a furnace for "emergency heat. "  Not sure what the normal lifespan is, but the one in our residence is gettting pretty ricketty at 20 years old, and the heat pump just went down.  I've heard heat pumps last 15 years average.  Our own personal experience is 10-20 years.  and they're under warranty for the first 10.  heat pumps here run 4500 with install, and furnace I think 2000, installed.  Seems pretty darn high considering the lifespan.  We don't have natural gas (lucky you!).  I never know if tenants are changing the filters, either, which affects the lifespan.  What did you wind up going with?  do you like it?

Hi everyone,

I wanted to let you know that we decided to do heat pumps with a 98% gas furnace. Why? Because the upgrade to heat pumps was only $500 more.

I also added a smart thermostat, so as time goes on I can tweak the controls and set things up to be the most efficient.

Mark