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.
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.
@Stephen S. - there is an analysis spreadsheet that you can download from some federal gov't dept. that will do energy comparisons based on available fuel types.
As @Mike Hurney and I discussed last month, the preferred heating fuel depends greatly on your area. Here, natural gas is not cheap - we sell it to New England for less than we pay for it locally to heat our homes - and works out to pretty close to the cost of Oil. Electricity, on the other hand, is competitive here ($0.10/kW) ... especially if you use a heat pump.
An oil gallon is 139,000 BTU's
What you need to know is cost per BTU.
But then . . . . further complicating the comparison is that an oil system is unlikely to be over 75% efficient (and more likely to be 65% <g>) whereas a gas system is likely to be 90% efficient. <g>
Originally posted by @Mike Hurney: @David Krulac My last gas bill was $1.47/therm and oil is selling at $3.47. I think you're right about the 60% cheaper.
I use the dollar approach to comparison. The gas equipment is about 92.5% eff for the applications that I use. We sometimes even convert from hot water or steam to hot air which further increases the efficiency.
The $4,500 oil bill reduced to $1,700 gas bill is just one of the many conversions that we've done. The oil burner we replaced was burning a gallon an hour when running and it ran 12 months a year due to domestic coil.
If you're dealing with C- property or low income tenants usually all electric is the way to go. Many will not pay the extra utility for Gas. Some may even complain to the housing dept because of this only to find out they didn't pay or turn on the gas. Electric is obviously a short term benefit vs a long term one. The best is when housing calls to "chew" me out about a renter only to respond with "what jane doe didn't pay her electric bill" LOL... know your market and provide for that.
You may also be interested in this cost-savings calculator for comparison of operating cost of various efficiency furnaces. It is from NICOR, a natural gas company serving Illinois, but the calculator can be used in any area. Please note any references to rebates are strictly for NICOR customers, but check with your gas company and see if they have a similar program.