Tough Decisions on Capex

8 Replies

Hello BP Community.  I'd love to get your oppinion.  One of my rentals (in the Tampa area) recently had a compressor go out on the AC unit.  I've owned this property for ten years, it was formerly my personal residence but has been a rental for about 2 years now.  The AC unit is around 13 years old.  I also need to replace the pool pump at this particular property as its around the same age and is on its last leg.

To fix the compressor (replace the compressor) it was $2,200, to replace the whole AC system is $5,700.  I have the cash reserves to replace the whole thing (thankfully) but I'm curious to know what others think.

Additional background, I have to replace another AC unit on my primary residence this year also so I'd like to be in a position to quote two units and get a discount.  The rental is in a class A neighborhood and brings in a pretty penny on rent, the tenant always pays on time and I intend on keeping this property long term.

So, would you repair and be in a better position to buy on your terms, or would you replace now?

Thanks for your opinions.

@Robert Curls I would do both as it is only a matter of time  before the AC unit goes. I have had AC troubles with my unit in Clearwater Beach and used advanced mechanical systems out of Tampa they are great. Whatever you do don't use Acree. 

@Robert Curls

Congrats on reserving. That's very wise. It's a fun exercise to divide the replacement cost by your estimate of the items useful life to calc out how much you should theoretically have in your reserve fund each year.

I'm a long ways from theoretical, but at least I know how far off I am.

Best to you.

Do both...Get a new unit and more energy efficient for your tenant. 

How big is the house? Sounds a little expensive. 

@Stephan K. Its a 4/2 1800 sq ft.  They are pricing a 3 1/2 ton unit.  Its a major installer (been in business for over 30 years) and they are very close to the property.  I've used them in the past.  They certainly aren't the cheapest but they do good work and its pretty hassel free, I call they show up and they call me when their done.  I don't do "deals" any more where "a tech someone knows" does it.  It always bites me in the rear, or consumes too much of my time. 

I would replace them both but make sure the volume discount is applied to your personal AC unit.

I wish I had replaced the entire unit on my rental instead of repairs every year.  I probably could have purchased a new one by now.  Next time there's a semi big prob

Me with it I'm replacing my entire unit.

I get my pool pumps from 

Just for follow up.  I elected to repair rather than replace the AC unit, they put the new compressor in and everything was good to go.  Then I got a call from my tenant at 7:30 this morning that the air wasn't working again.  Apparently that compressor went out also.  Although I think I know how this story ends...

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