Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
Closing on another rental property tomorrow. Older 3br. 1ba home built in the 1960's.
Home currently has natural gas central unit with "NO" central cooling. The only cooling comes from window units. Pretty unusual setup for the area.
I'm planning on replacing the unit with a heat/ air combo.
I'm trying to decide which type of system to go with.
I prefer gas heat personally, but the furnace is the last piece of gas hardware. Once it's eliminated the tenants would no longer have to hassle with a separate gas bill.
Straight electric is the cheapest to install, simple/reliable, Just not sure how bad the electric bills will be during the winter. I definitely don't want the tenants being unable to pay rent because they are paying $300 utility bills.
Then there is the Heat pump setup. Good energy efficiency, a little pricy, more parts to break.
My preference is just going with straight electric heat, but I'm just not sure how much more expensive the utility bill would be during the winter.
I'm down in South MS so winter is almost non existent. We probably get 15 days a year of freezing temperatures.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
Ed Lee
If you have an efficient gas furnace already and the heat is forced air, you can add a central cooling unit into the plenum (with an external compressor like a heat pump) to provide central air to the building.
This should be a more cost efficient solution than replacing the existing system. Though, if the blower in your furnace is not a DC variable speed unit {i.e. an old single speed 75-100amp motor}, you should consider replacing the blower since it will be running year round and the blower tends to be the biggest energy consumer in older forced air systems.
If the gas furnace is older (only 65 - 75% efficient vs 95% in a modern furnace), you could always replace it with a hybrid solution ... natural gas heat with an electric central air cooler.
Contractor · Round Rock, TX · Member since 2013 · 767 posts · 389 votes
13y
Your weather is fairly similiar to ours here in central Texas. Maybe a little colder. I'd honestly probably stay with natural gas for being the cheapest right now. Switching to electric is going to require a fairly significant electrical upgrade to go from 120 volt 20 amp to 240 volt 50 amp depending on how much heat you put in, I'm guessing around 10KW which pulls 50 amps. So it will probably be a wash on install of gas vs. install of electric. The equipment to buy is only about $300 more for a gas system vs. an all electric. Wire for 50 amps is gonna run you $2/ft, plus new breakers, disconnects, miscellaneous materials and labor to do all that. I'd think I would keep it as is for simplicity. People like gas heating as well and they will save a few $$$ in the wintertime on their electric. Depending on your rates, my heating bill runs $50 month on gas in the wintertime on an all gas house. Just my 2 cents.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
Ed Lee
If you have an efficient gas furnace already and the heat is forced air, you can add a central cooling unit into the plenum (with an external compressor like a heat pump) to provide central air to the building.
This should be a more cost efficient solution than replacing the existing system. Though, if the blower in your furnace is not a DC variable speed unit {i.e. an old single speed 75-100amp motor}, you should consider replacing the blower since it will be running year round and the blower tends to be the biggest energy consumer in older forced air systems.
If the gas furnace is older (only 65 - 75% efficient vs 95% in a modern furnace), you could always replace it with a hybrid solution ... natural gas heat with an electric central air cooler.
Durham, NC · Member since 2012 · 498 posts · 48 votes
13y
Heat pump is much more efficient than electric heater, especially in a mild weather. You may also try a dual system (with your existing furnace), which automatically starts to use gas when it become too cold. But I guess you don't need it.
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
13y
Ed Lee
Natural gas is the cheapest way to heat. It is 60% cheaper than oil and cheaper than electric, including electric heat pump.
Natural gas is plentiful in the US, In Pennsylvania alone there is is a 100 year supply. In the future you will see more homes and businesses heated by gas as well as trucks, buses and cars. Honda currently has a factory nat gas Civic. also electric generation will be moving more to natural gas as a source of fuel replacing nuclear and coal. Safer, cleaner and cheaper.
Your tenants will thank you for having the cheapest way to heat in their rental property.
Currently I've gotten rid of all my oil heated places, by either selling or conversions to gas. Have also done conversions to heat pump.
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
13y
I would go back with natural gas for sure if the stove and hot water heater were still gas.
My main concern is the tenant not bothering to hook up the gas. Then after a year of inactivity you have to have the line pressure tested by the city.
After talking it over with the paw in law I think we will pay the extra upfront to have a heat pump installed. Seems the power consumption of straight electric vs heat pump is pretty substantial..
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
13y
Originally posted by Roy N.:
Ed Lee
If you have an efficient gas furnace already and the heat is forced air, you can add a central cooling unit into the plenum (with an external compressor like a heat pump) to provide central air to the building.
This should be a more cost efficient solution than replacing the existing system. Though, if the blower in your furnace is not a DC variable speed unit {i.e. an old single speed 75-100amp motor}, you should consider replacing the blower since it will be running year round and the blower tends to be the biggest energy consumer in older forced air systems.
If the gas furnace is older (only 65 - 75% efficient vs 95% in a modern furnace), you could always replace it with a hybrid solution ... natural gas heat with an electric central air cooler.
Great suggestion, but unfourtnately the old gas furnace is nearing the end of it's life cycle. I think it is around 20yrs old. Quote for going that route was about $1,800 vs $2,800.00
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
13y
Ed Lee
Unless your gas rates are substantially higher and your electric rates substantially lower, natural gas is the CHEAPEST way to heat, much cheaper than electric even heat pump. Presuming air to air heat pump. If you're talking ground water heat pump, they are more efficient than air to air, but the installation costs are way higher than nat gas.
I've been installing 92% efficient nat gas furnaces with PVC side wall vent, no need for a chimney and you can locate the furnace most anywhere in the building. The heat is hotter than a heat pump, and when the outside temps go below 32, the heat pump kicks in with back up resistance heat which is the same as electric baseboard, cheap to install but expensive to operate.
And as far as the HWH and stove, if they are in good condition, I'd leave them electric, until such time as they broker and were not economical to repair.
Also when advertising the vacancy for rental, you can say "natural gas heat... the cheapest way to heat."
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
13y
Just a update in case someone else happens to face the same dilemma.
After asking around I decided against the straight electric strip heating. Cost to operate would be about 4x the cost of a heat pump from what I understand.
I went with a 2.5 ton heat pump system. Total came to $2,800 for the complete system including the new wiring due to the previous unit being gas.
Installers were in and out in a day and seem to have done a good job.
Just to reiterate, I too would have gone with natural gas vs electric if any of the constant use systems were still gas. My decision was heavily influenced by the thought of tenants not bothering with hooking up the gas meter and overloading the electrical system with space heaters during the winter.
Rockford, IL · Member since 2013 · 330 posts · 62 votes
12y
While I would agree Natural Gas is the cheaper alternative in the North, you stated the property is located in Mississippi. If that is the case, check the utility rates. In some areas (Columbus, GA for example), natural gas usage is low resulting in high delivery cost and winds up more expensive than electricity.
With heat pumps, many people (particularly those use to forced air) have a problem in that the heated air does not feel hot when blown into a room.
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
12y
This doesn't come up with a season long savings - but here are the calculations to come up with costs per 1 million BTU. Which I used because that is a typical one day usage where I am.For the most part, everyone across the country would benefit from even an air source heat pump. Systems in the northern US should really be dual fuel - with a heat pump coupled to a gas/propane/oil furnace. The heat pump will be much less expensive to operate during the spring/fall when you don't need alot of heat, and then in the middle of winter the fossil fueled furnace will kick in to keep up. Here are some prices that compare the cost between natural gas/propane/oil/and electric.
You will have to plug in the current fuel-cost numbers for your area as I made this chart up some years ago for a customer. The calculations are still correct - just insert your fuel costs and re-run the calcs.
80% propane
1,000,000 BTU out / 80% = 1,250,000 BTU in / 91,600 BTU per gal propane = 13.646 gal X $2.00 = $27.2994% propane
1,000,000 BTU out / 94% = 1,063,830 BTU in / 91,600 BTU per gal propane = 11.61 gal X $2.00 = $23.23
80% natural gas
1,000,000 BTU out / 80% = 1,250,000 BTU in / 100,000 BTU per therm natural gas = 12.5 therms X $1.30 = $16.25
94% natural gas
1,000,000 BTU out / 94% = 1,063,830 BTU in / 100,000 BTU per therm natural gas = 10.64 therms X $1.30 = $13.83
85% oil
1,000,000 BTU out / 85% = 1,176,470 BTU in / 140,000 BTU per gal oil = 8.4 gal X $2.13 = $17.90
Resistance
1,000,000 BTU out / 3,412 BTU per KWH = 293.08 KWH X $0.08 = $23.45
Heat pump with COP of 3.5 (47 degrees)
$23.45 cost of resistance heat / 3.5 = $6.70
Heat pump with COP of 2.4 (17 degrees)
$23.45 cost of resistance heat / 2.4 = $9.77
The actual numbers for heat pumps (mainly the 17 degree calculation) will be slightly higher than this because of defrost cycles.
So as you can see, heat pumps are by far the most economical to run. If your electric rates are low enough, you could even get by with strip heat for backup and not need fossil fuel at all.
If you do put in a fossil fueled furnace, go with a sealed combustion 90% model. This will reduce the infiltration losses of the house, and be more efficient to operate.
Closing on another rental property tomorrow. Older 3br. 1ba home built in the 1960's.
Home currently has natural gas central unit with "NO" central cooling. The only cooling comes from window units. Pretty unusual setup for the area.
I'm planning on replacing the unit with a heat/ air combo.
I'm trying to decide which type of system to go with.
I prefer gas heat personally, but the furnace is the last piece of gas hardware. Once it's eliminated the tenants would no longer have to hassle with a separate gas bill.
Straight electric is the cheapest to install, simple/reliable, Just not sure how bad the electric bills will be during the winter. I definitely don't want the tenants being unable to pay rent because they are paying $300 utility bills.
Then there is the Heat pump setup. Good energy efficiency, a little pricy, more parts to break.
My preference is just going with straight electric heat, but I'm just not sure how much more expensive the utility bill would be during the winter.
I'm down in South MS so winter is almost non existent. We probably get 15 days a year of freezing temperatures.
Investor · Middleboro, MA · Member since 2013 · 19 posts · 2 votes
12y
Hi, I'm near Boston Massachusetts. I just looked at a house w elec baseboard. Costs up here are high for utilities. I'm wondering if selling a rehab with elec bb poses a problem vs oil or gas. I'm thinking of putting in gas fhw if gas available, baring that, oil fhw. Am i nuts ?
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
12y
I gave you the formulas - just work out the costs for your area. <g>
Originally posted by @John Ewas:
Hi, I'm near Boston Massachusetts. I just looked at a house w elec baseboard. Costs up here are high for utilities. I'm wondering if selling a rehab with elec bb poses a problem vs oil or gas. I'm thinking of putting in gas fhw if gas available, baring that, oil fhw. Am i nuts ?
Pottstown, PA · Member since 2014 · 13 posts · 2 votes
12y
Seems like you're staying away from electric which is good. Electric baseboards themselves are cheap but you need to get wiring to those baseboards, which could be expensive. You may also have to upgrade electrical service itself if the existing is less than 200 amp. Plus as others have said, electric is expensive monthly.
Here in the northeast, I see lots of 100 year old buildings with no insulation and electric baseboard heat. That would not be in my buildings, unless you want high heat bills for your tenants and constant move outs.
Investor · Middleboro, MA · Member since 2013 · 19 posts · 2 votes
12y
What I was really asking was, is there buyer remorse to electric baseboard up here or anywhere? I'd like to give the new owners something that they will love for years and make a profit :) I had multis years ago, and electric was a negative for renting. Now I just rehab and sell.
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
12y
How outrageous was it? What is the house? What were they installing? How much did they want to charge you?
Originally posted by @Michael Seeker:
Just thought I'd share a couple great resources I came across while researching an outrageous heat pump install quote I received.
Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes
12y
Originally posted by @Stephen S.:
$17500 for 3 new heat pump systems for a triplex rehab. Also need new line-sets and ductwork on 1 of the 3 units. I came up with about 6-7K in materials being conservative...so $10K+ in labor for something that should be done in around 3 or 4 days or less.
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
12y
My actual costs for heat on my own properties in PA. Here the nat gas prices are less than they were 15 years ago and gas drill is at historic highs and there is a 100 year supply of nat gas just in PA.
I had one house where the oil bill was $4,500 yr, switched to nat gas, heat bill went to $1,700. I've switched over a dozen buildings from oil to gas.