I have a utility room that mirrors another unit in size, but it has heating oil, boiler and circuit breakers in it currently(all old, barrel plug circuit breakers and nearly 50 year old radiant boiler heat system for other 5 units)
I was thinking of switching to mini splits for the units and moving the meters/boxes to update the failing/antique stuff and add another monthly rent check. Am I crazy or does that make sense for a commercial property? Haven’t gotten any responses on my mini split questions so I might be dreaming, please help.
@Brendan Reilly it always makes sense to monetize everything you possibly can on an investment property. I will tell you though that moving/replacing all of those mechanicals will probably make it not worth the investment. I have never added a unit, but you also have to think about zoning, permit fees, architectural drawings, etc.
Good point on the zoning, I had just assumed since it was already five units, one more wouldn’t be hard to get through.
I weighed out a cost benefit on the mini splits since it would push the heating bill onto the tenants and add an A/C value to them instead of an overhaul of a aging copper system. 3k a year in oil alone at an 8 cap seemed to be potentially break even with some value added to the tenants, but the freedom to add the possible 850 a month at that cap started looking very Interesting.
Obviously like you said the drawings etc may be the step too far without a price tag.
I think you would be stupid NOT to explore this option. Adding an extra unit would be a great way to increase revenue/property value.
As mentioned, this is a large undertaking though. You will need to consider the costs of doing everything, the headache of getting the work approved, and the extra potential income. If it makes sense, do it, if not don't.
Thanks Andrew, that’s what I was thinking but you since I’m still spreading my investor wings it helps to get confirmation that my mind is in the right place.
Thanks Andrew! I was thinking my mind was in the right place on this but it’s always. I’ve to get confirmation on it.
By chance have you got any experience on using mini splits in units since your in my climate?