How to SAVE on ENERGY????

General Landlording & Rental Properties
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How to SAVE on ENERGY????

Atwan Kwan
Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes

Problem...... - Utilities From HELL!!!!

My client has the property from hell, with an old-school forced air furnace.....

I was able to get them great tenants at a great rate..... only to find the blood sucking heat drain it all away....

Bills go up to $500/mo!!!.....

I'd like to consult my client with an alternative, because the house has HUGE potential.....

Maybe some of you guys r smrtr than I..... any ideas?

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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
10y

@Atwan Kwan that seems like a really high gas bill. Can you provide more detail on the property like age, square feet, furnace age, is it single or multifamily, etc? Replacing the thermostat with a digital programmable type is a good first step. Next look at the furnace. You could have a 70% or worse efficient furnace and a new one could be 95% or better. The furnace upgrade could pay for itself quickly. You get to depreciate it on your taxes. Check the attic first because that is where most of your heat escapes. Should be 18" or more of insulation in the attic. If not, having insulation blown is cheap and fast. Once you start getting into windows, it is going to help but will cost lots of money up front. 

Just to summarize in order. Thermostat upgrade, furnace upgrade, attic insulation, windows.

One final caution is that tenants who do not pay their own heat will often be careless. I had a property where I paid gas and I drove by in January to find all the upstairs windows open. They said it was hot so they opened the windows. Whenever possible have the tenant pay all utilities and you will be amazed how much the bills decrease.

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  • Trevor B.
    Fort Worth, TX · Member since 2016 · 19 posts · 18 votes
    10y

    New windows, new insulation, new doors, new sheetrock I would use 5/8ths fire core sheetrock, but this will cost a lot of money and at least a month in work. Solar panels, replace furnace, new thermostat.

    Now a cheeper way would be to reseal all windows and doors, and a new thermostat. 

    I am a little confused, why are you worrying about heat in the middle of summer? 

    0Reply
  • Atwan Kwan
    OP
    Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes
    10y

    @Trevor B. it's been like this for a few yrs.... Your option sounds costly and inconvenient with tenants.....

    0Reply
  • Andy Hudgins
    Covington, GA · Member since 2015 · 99 posts · 33 votes
    10y

    Post a LOT of pictures here, both interior and exterior, and you will be surprised at the amount of good information you'll receive.

    1Reply
  • Matt Turbitt
    Grove City, OH · Member since 2016 · 167 posts · 66 votes
    10y

    Forced air systems are efficient, 20yr old furnaces are not, start by switching to a new high efficiency system, while expensive it's fast and increases property value. Often in that area you can have an energy audit done for $100 or less where someone comes in with a thermal camera and shows all that places the heat (or ac) are escaping. That will give them a list of where they need to fix window seals, attic doors, door jams, etc.

    2Reply
  • Trevor B.
    Fort Worth, TX · Member since 2016 · 19 posts · 18 votes
    10y

    @Atwan Kwan No one said it would be cheap to get energy bills lowered from $500 a month, or convenient. You are going to inconvenience the tenants some how, whether it is installing that new air system. Also that is why I including the cheaper way to do it, which is in line with what @Matt Turbitt said. I know in Texas that A/C is part of the rights of tenants according to state laws. IMO

    0Reply
  • Atwan Kwan
    OP
    Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes
    10y

    @Matt Turbitt I wonder if there is tax write off on this as well? 

    Any suggestions where to look for good energy audit?

    Thanks

    0Reply
  • Wesley W.
    Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    10y

    Your utility provider may have such a service, even complimentary.

    1Reply
  • Kyle Hipp
    Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
    10y

    If the property has old single pane windows then that should be replaced with energy efficient vinyl double pane windows yesterday. I do that on all my properties. It is about $250 - $300 per window installed and wrapped. Then get the furnace checked out and replaced if it is over 15 years old for sure. That is roughly $2,000. Both of these projects take a day to complete so minor inconvenience to the tenant.

    0Reply
  • Atwan Kwan
    OP
    Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes
    10y

    @Kyle Hipp $2k is ur estimate for new furnace? That's definitely a lot more affordable than I thought and works with our margins....

    Thanks

    0Reply
  • Kyle Hipp
    Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
    10y

    It depends on your contractor and sizing but that is about what I pay on my properties. Another option is to split up into 2 furnaces and have the tenants be responsible for gas.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y

    @Atwan Kwan that seems like a really high gas bill. Can you provide more detail on the property like age, square feet, furnace age, is it single or multifamily, etc? Replacing the thermostat with a digital programmable type is a good first step. Next look at the furnace. You could have a 70% or worse efficient furnace and a new one could be 95% or better. The furnace upgrade could pay for itself quickly. You get to depreciate it on your taxes. Check the attic first because that is where most of your heat escapes. Should be 18" or more of insulation in the attic. If not, having insulation blown is cheap and fast. Once you start getting into windows, it is going to help but will cost lots of money up front. 

    Just to summarize in order. Thermostat upgrade, furnace upgrade, attic insulation, windows.

    One final caution is that tenants who do not pay their own heat will often be careless. I had a property where I paid gas and I drove by in January to find all the upstairs windows open. They said it was hot so they opened the windows. Whenever possible have the tenant pay all utilities and you will be amazed how much the bills decrease.

    3Reply
  • Atwan Kwan
    OP
    Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes
    10y

    @Joe Splitrock thanks, will def take a look.

    We've had several run ins with the tenants over the bill. They are mostly responsible but complained as the inefficient furnace wasn't their fault.....

    Good question, do I still hold them to Bill?

    0Reply
  • Atwan Kwan
    OP
    Property Manager · Rockville, MD · Member since 2014 · 287 posts · 29 votes
    10y

    @Joe Splitrock 4br/2ba raised rancher, with basement. 1,448 sqft, built in 1952, furnace is AT LEAST 15 yrs old.

    Already put in new digital thermostat, given free by pepco (no help)...... it was originally a 2br/1ba with addition...

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y

    @Atwan Kwan go up in the attic and check the type and depth of insulation. Fiberglass should be around 18 inches deep. You can have it blown into the attic fairly inexpensively. I probably wouldn't replace the furnace just based on age, but check for efficiency ratings on it. The highest efficiency furnaces have direct venting which means the exhaust is a plastic pipe that goes out the side of your house. Metal vent out the roof means it is lower efficiency. Insulation is a cheap no-brainer, but the furnace requires some analysis of the payout. You can have an HVAC person look at it and give you a quote. Just keep in mind they are sales people so they will be biased towards replacing it. Still have them look at it and get their opinion. Just if they tell you to expect 10-30% savings each month, plan for 10% at best.

    1Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    10y

    I'm an engineer by trade and do HVAC design work. Granted, it's for commercial projects, but they aren't vastly different in principle. 

    Wall insulation, while you would always prefer, isn't that serious IF it's not a leaky house. Simply having the outside sealed and inside sealed with a 3.5" air gap is a reasonable insulation value for walls. All bets are off if it's a "loft" type where it's just a solid brick wall. Although those have some nice thermal mass properties.

    Windows and ceilings usually account for about 1/2 of energy loss from a construction standpoint. So as @Joe Splitrock said, I'd check attic insulation only. Any non drafty double pane windows should suffice, although obviously LowE would be preferred. FYI, I used to work at a window factory in college and the owner once told me that Argon was a waste of money, only because according to him it's just a matter of time before it leaks out.

    Thirdly, check the efficiency of the furnace. It shouldn't be too hard to find a 90%+ efficiency unit, and it's probably about time to replace if it's really old anyway. I dunno if the owner pays gas and maybe the tenant pays electricity, but putting in an electric furnace would be the best option should the utilities be split that way.

    0Reply
  • Zach Quick
    Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
    10y

    @Roy N. If someone can tag him, he is extremely knowledgeable and really enjoys talking about energy efficiencies.

    0Reply
  • Justin Fox
    Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
    10y

    Look into foam insulation blown into the roof rafters.  It runs about ~$2/sqft of the home and keeps it like an ice box.  If it's multiple stories, then just the footprint.  That, and make sure windows are caulked/foamed.  Double pane and low-e are good options too.

    0Reply
  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    10y

    @Zach Quick - thanks for the tag.

    Interesting discussion - and one of my favourite topics.  

    The best bang for your buck will come from improving the building envelope with air sealing being the gateway to other benefits.  It matters little how much insulation you have in a wall or ceiling assembly if air is moving through it.

    Once the envelope is tight, then there is some truth to seeing more benefit from insulating your attic/roof as @Joe Splitrock and @Dustin Beam versus adding more insulation to the wall assemblies, but that largely depends on where you are and how your building is constructed.  I.e if you are in a place with long, cold winters and where the norm is to construct {residential} properties with full basements, then an uninsulated, yet conditioned, basement could be the source of 20+% of your heat loss.

    Dustin - a 3.5" air gap may be reasonable in Kansas (if you wall assembly was air tight ... even then I am doubtful) - however, it does nothing about the 12 - 15% of your wall that is framing and a thermal bridge.

    When it comes to windows, there are advantages to triple glazing and inert gases (though they do eventually normalize with the atmosphere) ... however a well-built double glazed window with an insulated frame will match, or out perform a triple glazed window with your run-of-the-mill aluminium or vinyl frame.   Window frames and sashing are neglected by most North American - Hollow aluminium or vinyl framing offers little insulation value ... their response to temperature is also a factor in windows warping and the inert gases between the glazing being set free.

    @Justin Fox - you need to exercise caution with spraying {closed cell} foam directly on the underside of the roof deck as you can both prevent the roof deck from drying (insufficient ventilation) and cause condensation within the roof assembly itself ... leading to premature failure of the roof assembly.

    1Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    10y

    @Atwan Kwan,

    For what it may be worth, I've read more than one post here on BP about tenants who keep windows open even in the dead of winter and keep the 'stat set on 80.

    Maybe check into that if you can ... drive by at odd hours, stuff like that.

    Why isn't the tenant paying their own heat?

    0Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    10y

    @Roy N., uninsulated walls for tight construction isn't negligible but you're not going to get your best bang for your buck getting them insulated vs other options.

    There aren't too many places in the lower 48 that have dramatically colder design temperatures than KC. I'd have to verify, but I'd bet Maryland is within 5 degrees if not warmer. But besides my profession which I've ran heat load calcs for 5 years of, I have one more ace up my sleeve. My own home doesn't have wall insulation. My heating bills are not high at all.

    Take it or leave it.

    All that said, my money is on the tenants having it set to 76 degrees or warmer 24/7.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y

    What is the size of the house? $500 a month may be a huge amount for say a $1200 square foot 3 level split. Or it might be not that bad for a 4000 square foot house that is older.

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  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    10y

    I'm assuming a multi-unit.

    Look into the cost of replacing the heating system with multiple submetered systems. When leases come up for renewal the terms for who pays what can be adjusted.

    0Reply
  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    10y

    @Dustin Beam

    I just looked up some winter stats for Kansas and you have it far milder than I thought ... practically balmy.   Our average "high" in winter here is about 20 degrees cooler and our heating degree days are 80 - 100% greater.

    So what you mean by "my heating bills are not high" is entirely relative.  I have a 1500ft^2 student house where I consider the utility bills to not be high ... average is ~150$/month (much of that is hot water), highest was $248 (cold enough that the auxiliary heat was on a lot).  The walls are R35 and the ceiling/attic assembly is R70.

    Before we retrofitted that house, it had basically no insulation in the walls (less than R5) and heat loss was far greater - as was the cost of heating.  We migrated to a more efficient HVAC system as part of the retrofit, but actually ran of the older system during the course of the retrofit.

    Other similar houses in the neighbourhood have average annual energy consumption 80 - 120% greater than this house.

    We just acquired another near identical house one block away and I am presently modelling a retrofit plan that, once finished, should see the average annual energy consumption be in the range of 30 - 50kW/m^2.   The operating costs of this house will be reduced by 70+% from where they are presently.   Conservatively, the pay-back on my insulation and air sealing should be in the 5 - 7 year range.

    0Reply
  • Andrew Posner
    Wholesaler · Montgomery Village, MD · Member since 2016 · 30 posts · 7 votes
    10y

    For those of you in MD, I can definitely help. My other business is saving money on electricity/gas. I can also help in other areas (most of Northeast and TX), but not all, yet. Pm or call me.

    1Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    10y

    @Roy N., of course it's colder in Canada, I never said anything about that. The OP is from Maryland,  I'm assuming the property is as well... and I stand by my original point. Actually I just checked, Baltimore Maryland is warmer than Kansas City.

    Again  discount the hundreds of projects I've ran heat loads on in the US if you want. But I have basis for my reasoning. If his property is somewhere with extreme temperatures, then it can change things.

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