Keeping the Winter out

21 Replies

I’m curious about utility optimization. Particularly to heating. My apartment building is in Maine and is a Buy and Hold/House Hack. It is common practice for landlords in the area to include heating and hot water as part of the rental in multi family units. This has pros and cons for both parties. They don’t have to worry about the oil running out and we don’t have to worry about oil running out and causing potential damage. However this takes a good chunk of the Cash Flow during the winter months.

The building came with double pane vinyl windows. Since the purchase I have done upgrades to reduce my oil cost. Spray Foam in basement and attic. Replaced all doors going in and out of the units/building. Am having hybrid electric water heaters installed for each unit so the hot water cost will now the tenants responsibility. Have yet to insulate the walls with blown cellulose. I was told this should be a low priority because the return on investment is much longer than some of the other things I have done.

Any suggestions on other improvements? I had considered looking into heat pumps. But since the tenants don’t pay directly for their heat then they would just use them as ACs.

Thanks for any input

Do the heat pump.  So what if they use them as an a/c.  They're going to put Air conditioners in during the summer anyways, I'd rather an efficient one running if I could then one I can't control what it is.  Thats going to be the best thing for you.  I have a 2 unit I'm rehabbing now and the electric is separated.  I'm thinking of running mini splits to each unit and then they can pay all of their own heat and electric.  Only thing I need to worry about is water. Also I wouldn't go ahead and assume everyone that including heat is a common thing in Maine.  I know plenty of landlords that don't include it and have it separated.  I have a rental right now thats a house and it only includes water and sewer.  It's section 8 and then the tenants qualify for heating assistance and the heat goes all winter.

@Cody DeLong

Hey Cody, when I looked at doing mini-splits, it seemed that each unit would need multiple mini-splits and the cost added up fast. In say a standard 2-1 apartment (900sqft) with a kitchen, dining room, living room, how many mini-splits are you installing and what’s your ballpark cost?

Also, how do you mitigate the risk of the tenants failing to keep the place warm enough in the winter and having frozen pipes or something a long those lines? That’s why I’ve gone with landlord paid heating so far.

Thanks!

Eddie

@Eddie Gonnella - I only have one unit (a single family) that pays for their own heat. I just finished a 3 unit that I have setup for the tenants to pay the heat in the future once I have the heat pumps installed, currently just electric heat. 

If down the road for some reason a tenant fails to keep the place warm enough and pipes freeze, I will call a plumber and have the tenants invoiced for the repair. They refuse, evict and find better tenants. I actually find it highly unlikely that a tenant would let a place get that cold while living in it. I am sure it happens, but the odds...

It is common for single family residents to pay their own utilities. Outside of water due to the possibility of getting a lien. Not so much the case with multi family building/apartments. Typically a tenant renting a single family residents are of a different income bracket or is in need of the larger space a SFR can provide. Or in other cases has the backing of government programs to guarantee a huge amount of the top dollar rental rates that can be gained by having properties that qualify for said programs.

In my opinion It is risky to rely solely on electric heat outside of domestic hot water. Heating systems such as heat pumps become significantly inefficient once the temperature drops below a particular range. Somewhere around 25-30 degrees. Even if this expense is put on the tenant and they don’t let the units pipes freeze after one winter of having their electric bill jump by a significant amount they will just move. Heat pumps are a supplement to a heating source not a replacement.

My hope when I was thinking of adding heat pumps to my apartment building was to find a way to have my baseboard system automatically stay off till the outside temperature was about 40 degrees. Giving the tenant a perk of an efficient AC in the summer while having them pay for the heat until the temperature dropped below the point that it would start to massively affect their electric bill. All while being able to keep rents close to that of what a building owner who pays for all heat. Justifying it by saying “yes you pay for some heat but in trade off you get access to a very efficient AC unit in the summer that you don’t have to install/uninstall/store every year.”

@Brendan Stratton - @Dave Holman is a successful multifamily investor in Brunswick and swears by heat pumps as primary heating sources.  He has a lot of experience in this area and might be able to point you in the right direction.

@Kenneth LaVoie is an expert on building efficiency and has taken advantage of Efficiency Maine's numerous rebate programs to keep the winter out of his multifamily units.

I personally have separated all the heating systems in my units, mostly with Rinnais, but you can get away with that in the Midcoast more so than other Maine towns where the expectation is that heat will be included in the rent.

@Mike Roy - You're too kind to label me an "expert" though I've certainly put my study time in. 

I do agree that heat pumps are not quite a replacement for a central baseboard type heating system. I am wondering if there's an easy way to piggy back them like you suggest (perhaps have the boiler set on 62, and let the heat pumps make up the difference?) I might be missing something there, but just thinking out loud. I have a 4 unit (all 1 BR) that has a 1940's era "gravity hot water" boiler. I actually don't think it's steam but it does use radiators. This thing has been maintained since the 1950's by the same company that handles it now, believe it or not! I am considering using Monitors if I can find a good price. I really don't want to pay 4-5K per unit, that just wouldn't make sense. 

@Brendan Stratton @Mike Roy Great conversation. Here's my sermon. Heat pumps are 100% better than boilers, furnaces and any other heat source. Why? Well I've personally lived with them as my ONLY heat source for 6 Maine winters and stayed a toasty 70F when it's -25. No, my house isn't a mega-insulted passive-house, it's a 1987 riff on a cape with the original windows and an insulated attic. I have two Fujitsu Halcyons on the first floor of my 1700 sqf house and NO heat source on the second floor and it's always at least 65 upstairs when it's 70 downstairs in the dead of winter. I heat an entire 1200 sqf rental with ONE heat pump and that's worked great for the past 3 winters. I heat a 7 room office with 2 heat pumps. In the rentals, I do install baseboard electric in far away rooms as backup and extra heat if people want to close doors etc. and I prefer to leave legacy heat sources like furnaces in place in case all else fails. Lots of people (ironically, many HVAC and heating 'specialists included) who've never actually tried using them as base load heating will tell you it's not a good idea. For residential contexts, they are wrong. BTUs are BTUs. Solar panels and a clean grid combined with heat pumps is 100% renewable whereas oil gas and propane are destroying our planet at an ever-increasing clip. Plus heat pumps provide AC, dehumidication, air filtration, dust/pollen removal, programability, wifi smart home etc etc. Plus they come with awesome rebates from Efficiency Maine, they can't explode and don't get their fuel from fracking or Middle Eastern monarchies. Two or three heat pumps cost about the same as a boiler, cost less to operate, come with 10 year warranties and provide way more value for residents and planet Earth. Amen.

@Account Closed This is a common myth. That may have been true for some older mini-split systems where one condenser served multiple heads but modern heat pumps don't use resistance and are usually rated down to -13F (though again, I've seen them pull heat out of -25F air very nicely). What is true is that the colder the ambient outdoor temp is, the less efficient they become, so I've had electric bills in the $200-$350 range in the coldest months (far less than if I was trying to heat with electric resistance). https://www.mitsubishicomfort....

@Dave Holman @Kenneth LaVoie @Mike Roy

Have either of you done some napkin math on natural gas boilers vs mini-splits?

Let’s say a fairly standard 4bd 2ba 1700 sqft old Maine home.

Install cost of 2-3 mini splits vs a new natural gas boiler? Yearly heating cost compare for the 2?

Right now I have a 70s oil boiler hwbb. Last year heating cost/hot water was $4000 for the year.

Would anyone also know more about the rebates for multi families? When I looked into it I thought I saw they were only for primary residences.

Thanks!

Eddie

@Eddie Gonnella

I live in the exact house you describe: 4/2 1700 sqf with two heat pumps (and an electric car I charge). My total annual energy/electric bill would be in the $2000-$3000 range (solar reduces it). Install cost for heat pumps was $8k (though each has a $500 rebate). Controlling for most variables, I think heat pumps are slightly less costly to operate than natural gas but a lot depends on what you think gas and electric prices will do over the next decades. Electricity is very overpriced in Maine whereas gas is currently relatively cheap, so I feel like there’s more risk in assuming gas prices will be stable than electric in the long run, which may actually fall if we get a better grid and generation situation. Both are better than oil...

@Dave Holman

my God you have me intrigued it's now! I really thought that heat pumps still weren't quite up to the job of being true heat replacements. I have a nice four unit all 1-bedroom that I may just have to do this four. Like I said earlier it's got an old gravity steam or hot water boiler from the 1940s which works beautifully, and even only has one thermostat in one apartment. I could probably keep that in place as a legacy system as you described, and use the heat pumps as primary. People say it's tricky to shut off a boiler like that during the summer, but I've been shutting it off all summer for 10 years with no leaks so far. I just got to get a couple of estimates now for the heat pumps.

@Kenneth LaVoie  

I just had someone (Central Maine Heat Pumps) come out and will be giving me a price for my primary res. Apparently the single units are cheaper plus you have some redundancy there. I'll share it with you when I get it. I want to see how it goes at my place and then might think about it for my properties. There are also do-it-yourself units on the market (Mr. Cool) that come with pre-charged lines.

Like @Dave Holman said, these things are way more efficient than they used to be and can operate fine in Maine winters now. I'll keep a woodstove in my res but if I do it in the apartments will probably leave the existing system in place and sort out some sort of thermostat arrangement on it.

I've actually talked to a weatherization (efficiency Maine partner), as well as an INSTALLER who both told me that they probably wouldn't be a great choice for multi's (even with today's higher efficiency) and I'm inclined to share their cynicism. 1.) monthly maintenance (more or less) with filters. 2.) Warranty: Some smaller operators can't offer the 10-12 year warranties, and my understanding is that they can be troublesome (we're having quite a bit of trouble with our fujitsu installed 4 years ago. In fact our experience so far has led me to regret getting them. We don't use them for heat at ALL becuase my wife just doesn't like the blowing air. We have oil BB and wood stove (WS gives us 100% of heat during day, and boiler only comes on at night or when gone). 4 cords of wood and 500 gallons oil, give or take, 1,900 SF colonial. I think I'm going to go with monitors over heat pumps, though I will miss the added "luxury" of the AC in the summer. I might be overly pessimistic but I'm still in the "not ready for prime time" camp despite even Mr. Holman's very credible, well laid-out argument (which was actually what temporarily bumped me out of the cynical camp to begin with!)

Last I checked heat pumps are not designed for really cold temperatures.

“a heat pump becomes less effective as the outside temperature drops. According to the U.S. Department of Energy, a heat pump can be twice as efficient as conventional heating at 50 degrees F. But it rapidly loses its efficiency and effectiveness when you get into the 30-degree range.”

Yes, winter is coming. It hits you guys a lot harder than us. Good idea to take care of your heating needs before you need it.

I prefer winter to summer here. Summer is too hot. Winter is mild, snow stays in the mountains where it belongs.