4 plex and Windows

[Mike Sattem]

Hey All,

I am getting ready to close on a fourplex that needs alot of love. I worked with the seller to get some of the work done, and paid for by him as part of our deal. However, the one thing he wouldn't budge on was windows, as the tenants pay for their own heat, so in his eyes, this was a waste of money. So now I am looking at paying for the windows myself after closing and getting them installed during the rehab before I put tenants in. No big deal, but the windows are $8K, which puts me past my available cash for my rehab. Am I crazy for wanting to dump this much money into windows when it won't save me any money in utilities, and it won't allow me to charge more in rent?

Every other rental I own already had new windows, or they were installed as part of the sale agreement, so this is a new world for me.

[Roy N.]

@Mike Sattem 

My view will vary a little from the other responses you have received thus far.   We operate in a northern climate, and there is often substantial advantage to replace original windows - especially if they are old, built in-place, single glazed, single/double hung - with energy efficient double/triple glazed windows {casements are preferred as they are more efficient}.   This best done in concert with other insulation improvement to the building envelope.

Our experience with energy efficient improvements to older buildings is that it helps with Tenant retention (lowering turnover) and, contrary to your vendor's opinion, we firmly believe that tenants are entitled to safe, healthy, and energy-wise, accommodations.

On approach you could take would be to stagger the window replacement. I realize that it is far easier to change them all now while the building is empty, especially if you are renovating the interior of all units.   If you are not remodelling all units, replace the windows in those you are and leave the remaining unit(s) until you renovate their interior.  An alternative would be to replace the windows in those units with predominate north and eastern exposures first and the others at a later time after you have replenished your reserves.