New to Real Estate · Madison, WI · Member since 2020 · 68 posts · 16 votes
I just purchased a two unit rental and have been told by other landlords that it’s best to have all the utilities separate so each tenant pays their own, which I agree with. The way this property is set up is there is one gas furnace and one unit has a thermostat so they would control the heat for both units. Not only do I think that’s unsuitable for obvious reasons I also don’t like that I will have to pay for the heat and increase the rent amount to cover that. The other option I have is to install mini splits throughout the property and go fully electric. It solves the first problem but will cost me more upfront when I’m already putting a significant amount into rehabbing this property. Anyone have some wise words on this to help me make the best decision??
You have a couple of options, since you said gas furnace I am assuming force air. If your furnace is okay you could price separating out the gas or leave one with gas and one with minisplits or just install a second gas furnace. I would not recommend baseboard resistance as a sole source of heat as minisplits are cheaper to run although baseboard is cheaper to install. What you have to do is get a good HVAC guy in there for proposals. Is AC going to be considered essential in WI? What does the competition have? It all depends on your setup and current duct work.
I have an upper/lower duplex in Marshfield, WI, about 2 hours north of Madison. The owner before me converted the large home into a duplex and they removed the vents going upstairs, leaving force air in the lower and installed electric baseboards in the upper. Its an old home with old windows and I still have no issues finding tenants with the electric heat. The electric averaged $135/month with the highest bill being $260 last year but that's the tenants bill to pay.
I lived in Madison and had friends that had "free" heat. They would crank the heat and leave the windows open in the middle of winter. I have no idea why but something to keep in mind.
@Nicholas Ludwiczak Your electric must be cheap or they are getting heat from the LowerLevel. We have electric heat in a 3 bedroom house and it was running 900-1100/mo in RI Jan/Feb which were relatively mild.
I will say electric baseboard isn't the only resistance heat you can install. In a smaller room we put in wall units relatively high on the wall and in one room we switched to under floor heating (self install pads). A little more expensive to install but it was worth it for the extra space and the college students weren't able to push everything into the baseboard.