80% Vs 95% plus FURNACE which one to buy

14 Replies

Hi I have to replace my AC and furnace.  I live in Michigan.  The first quote came in at $5,200 to install a 80% efficiency furnace and an AC unit.  For $650 more he will install a 95% plus furnace. 

My renter pays the gas bill.

I think the pros to having a 80% are slightly easier to repair.

The pros for the 95% are: better resale, and more appealing to renters.

Also I'm thinking that furnace can last over 20 years, so is a 80% going to look dumb in 5-10 years?

thanks for you input.

I just went through this and my hvac guy told me to go with the 80% because it worked better in my set up. People think the 95% is always better and it really depends on the space you are in. I don't think most renters are that knowledgeable about efficiency ratings on furnaces. I would actually get another bid. 

I should have mentioned this as well.  Do you guys think the price is ok?

What would be your target price?  Thanks.

Nancy, thanks for your input, what do you mean by it worked better for your situation.  Was that for venting of for square footage reasons?

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Hi Glen,

Is the furnace the only one in the basement of a single family? Or are there a few other tenants(and furnaces) there? If your house isn't well constructed, sometimes, on very cold days, the waste heat from an inefficient furnace is needed to heat the basement. If your house is well constructed and insulated, the waste heat from the 95% furnace should suffice- even if it's the only furnace in the basement.

Assuming no mechanical problems as described above, I'd go with the 95%- your tenant's heating bill will be approximately 16% less than with the 80% version. So if his annual heating bill is $2,000(not unreasonable for Michigan, maybe even on the low side) he'd save $320 per year. 

Years ago, one of my managers asked why I'd bother improving the insulation in a house; "Mike, the tenants pay the heating bill, what do you care?" I figured it wasn't worth arguing- I knew I was right, but she was a new manager and I wanted to keep the peace. A year after the tenants moved in, they moved out- they said it was too expensive to heat. At this point, I reminded my manager of our conversation a year prior, and with her agreement, we fixed the insulation.

These days, I have gone beyond that- when tenants move out, I replace the lighting with low energy LED fixtures or bulbs to reduce their electric bills(the LED bulbs last decades, so it's basically a one-time investment.) A nice looking apartment will get tenants in, but a well-performing apartment will keep them there. Having inexpensive electric and heating bills not only lets them pay rent more easily(and possibly allows you to command a bit more rent,) but when their lease comes up for renewal, they'll think- "Where else will my utility bill be so low? I'd better renew." Lower turnover for the owner = higher profits. The little things count.

Michael

@Glen Hark 95% furnaces have way more expensive parts.  To replace the variable speed blower motor in that furnace would be just as much to replace as the entire furnace.

No furnace is going to last 20 years anymore.  The quality of the materials in new equipment is very very poor.  Id figure 12-15 years at best for new equipment.

I do commercial work, so we dont install too many residential systems, but I dont recommend 95% very often.  The exception is, if you can get a tax credit to help with the difference.  If you can get a tax credit for energy efficiency, go for it.

Hi It's a 1600 ft2 single family house.  and they do seem aware of utilitiy expenses.

I like the fact about keeping the bills lower, I'm just nervous about repair issues.

Do you guys think $5,800 for a 95% and a new AC unit is ok?

All information on here is incorrect.  This is a real estate forum. Check out HVAC-Talk for correct answers. I would elaborate but I'm busy

you are in Michigan so you shouldn't back able to go any less than 90% anyway. I go with a 92% efficient model for all my rentals. The savings is great and I just don't see the sense in not making energy efficient improvements...

you are in Michigan so you shouldn't back able to go any less than 90% anyway. I go with a 92% efficient model for all my rentals. The savings is great and I just don't see the sense in not making energy efficient improvements...

For the majority of my properties I would be at $1,900 for a 92% efficient condensing natural gas furnace installed and around $2,500 for the C/A

Check to see if the utility company is offering any rebates as well to purchase a higher efficiency unit. Sometimes, a utility company rebate can narrow that gap in pricing as well.

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I just paid $7000 cash for new 95% 100kbtu, 3.5 ton 13 seer AC with humidifier. Will be about $6300 after rebates and tax benefits. I think you can do better on price. PM if you want a referral to the company I used. They're big and reputable. They service all of SEMI.