Hi All,

I thank everyone in advance for their feedback. I own a three family in Portland, Maine. Just as a forward, I have read through the other forums on this topic (specific to Maine) and would still appreciate some input. I am looking to replace my heating system as it is very old and could die at any time. It is an oil furnace with forced hot water baseboard throughout. There is currently one system that heats the entire house as well as the hot water.

As most of you know, many landlords in Maine include heat in the rent and charge more for rent. I have asked around and many landlords would rather charge more for rent to pay for the heat than endure the cost to split the system and push the cost on the tenant. Although I can see where others are coming from, I NEED to replace my heat system and I see it as a good opportunity to split the system.

Firstly, do the BP landlords in Maine that push the cost of heat onto the tenants have a tougher time finding tenants?

Secondly, have any of the BP landlords gone solely with the heat pumps? I would like to know how they have performed. 

Has anyone used any other heat systems that they have found to be successful in Maine?

Thanks everyone for the input!

@Daniel Weber i own a building in south Portland. And a town house in Brunswick that i rent out. I have not had any issues finding tenants and i require my tenants to pay there own utilities. From whatviv noticed its starting to be the new norm even in maine.

My units have gas rennie heaters and electric baseboard heat. I tell my tenants jot to use the electric heat unless they really need to as it will make there bill very high. I dont get any complaints.

Just switched from oil to propane with renai heaters which are efficient and tennants will pay own heat and I reduced my expenses.It did cost more  for a 4 unit than if I put in oil heat they are easy to maintain 

@Daniel Weber

Hey Daniel,

Welcome to Portland. I’m also a new investor in Portland, have owned a 3 unit since 2017, and a 3/2 sf since December. Both my systems are natural gas, otherwise I’d likely have heat pumps already.

I’d go to the Efficiency Maine website and review the tax advantages of installing the systems. A friend of mine is a flipper and has great success with this program. From what little I understand you get an actual tax rebate, not just a deduction, and it is is the $5k-7k range.

Good luck!

Sean

@Daniel Weber, 1st I'm from Maine and my family lives there. I'm moving back to invest and be closer to family. Still looking for my location and have a broker in Portland who is awesome and BP. My fears are definitely heat sources. Heat pumps are very energy efficient and if you are replacing I'd definitely myself split the system. If I were just fixing what I currently had I probably wouldn't split. I also agree with Daniel regarding Efficiency Maine as they have excellent commercial (2 + units) rebates and plans. I'm definitely no expert just super interested in this immediate subject. Also, congrats on your investment. Will be following this subject closely so thanks for opening it. Much success to you Daniel. Respectfully, Ken Bailey  

@Daniel Weber, Apologize I meant to say I agree with Sean regarding Efficiency Maine. Sorry!

@Daniel Weber it sounds like you have an opportunity to pass along the biggest utility expense. It has been the trend in Portland for awhile.

In a three unit in Harpswell, I added heat pumps in each unit. The tenants love the heat pumps. There is an old oil furnace for back up but it was not needed last winter. 

In a house in Auburn, I replaced the oil furnace with a natural gas furnace. Unitil brought gas from the street to the house for no charge. The high efficiency natural gas furnace was reasonable in price and connected into the existing duct system. 

If there is natural gas in the street, then I would check with the City of Portland to see if the street in on the street opening moratorium list. If it is on the list, then I would go with heat pumps. If the street can be opened, then I'd weigh the costs and benefits of either gas or heat pumps.  

The good thing about natural gas and electric is that the utilities are provided throughout the winter even if the tenant stops paying, unlike oil. 

@Daniel Weber I've killed probably 5 oil burning systems in my Maine multi-unit buildings and replaced them with heat pumps. Losing track! It's a no brainer. It provides a terrific ROI in the 25-50%/yr range when you decommission an old fossil fuel system and switch to heat pumps (with tenants paying electric). You can then out-compete other landlords on nominal rent price and tenants love having AC and a modern programmable system, all while you get a higher NOI (profit).

A few things to keep in mind:

*Maine now has 2 different levels of rebate, the better rebate is for smaller (more efficient) heat pumps.

*Installers almost always want to over-size things. They're afraid people will get cold and think you need gigantic 24-30K+ BTU systems. Generally, you don't. Each unit needs one small efficient heat pump in a common area (kitchen, living room etc) and then your electrician can install super-cheap 4 foot electric baseboard units in rooms with closeable doors (like bedrooms).

*Beware of installers that offer what seems like cheap financing- in fact they often jack up the price to more than offset the cheap financing. My experience is that pure-play heat pump companies do better work for a lower price while bigger heating/renewable companies overcharge and aren't as specialized. Highly recommend Royal River Heat Pumps.

*Add a 50 gallon heat pump water heater for water. These have a $750 rebate and they only cost about $1200! Add another $500 for plumbing/electric on average. You can do one for each unit or one 50 or 80 gallon for a small 1-3 unit building.

*It's delightful to think about the thousands of gallons of oil you'll be saving while also savings thousands of dollars each winter.

Hope this helps!

@Dave Holman , Thank You Dave! This has been a great subject for the last month or so. Coming home to Maine as soon as all this craziness ends to live and invest there. Definitely going the exact same route you've taken. Again thanks for the excellent advice. Respectfully, Ken Bailey!