Real Estate Investor · Ottawa, Ontario · Member since 2011 · 217 posts · 14 votes
For a house built in 1993. It is forced air central heating and cooling powered by gas. The water heater, furnace, and heat pump are original. So it is time to replace everything? What about the roof? What is the typical life span of a ranch house roof in midwest?
They don't make stuff like they use to, but many homes have 40 and 50 year old furnaces still working fine.....but saying fine doesn't mean efficiently. Composite roofs usually take a beating with hail and wind and about 20/25 years it may not leak, may not even look bad, but it will be considered on its last leg. Metal about 40/50, same with concrete and slate depending on condition (not cracked or chipped). I don't fix it if it aint broke, especially for a rental. But be ready for it to break. If I'm paying the gas bill, I'd consider a new high efficiency furnance.
Roof is likely going to last 20 years or so, perhaps a few years longer if well-taken care of and well ventilated. If you plan to rehab and resell the house, you'll probably want to replace the roof, as the inspector will note that it only has a couple years left, and this will be a major expense for a new homeowner.
Likewise, the HVAC (furnace and AC condenser) are probably close to end-of-life also if they are original. You may be able to get a few more years out of them, but have a qualified HVAC contractor take a look and let you know.
The water heater almost certainly needs to be replaced. Typical lifespan on a water heater is 8-10 years.
They don't make stuff like they use to, but many homes have 40 and 50 year old furnaces still working fine.....but saying fine doesn't mean efficiently. Composite roofs usually take a beating with hail and wind and about 20/25 years it may not leak, may not even look bad, but it will be considered on its last leg. Metal about 40/50, same with concrete and slate depending on condition (not cracked or chipped). I don't fix it if it aint broke, especially for a rental. But be ready for it to break. If I'm paying the gas bill, I'd consider a new high efficiency furnance.
As Bill pointed out, if you're planning to rent it out, as long as everything is working, you probably don't want to replace anything.
But, if you're planning on flipping it (reselling it), then you're going to want to ensure that anything you don't do isn't going to negatively impact your ability to resell it.
For example, while the HVAC system may have a couple more years left on it, if a buyer is trying to decide between your house and a competitor, and the major difference is that the competitor's house has no deferred maintenance and yours does, he'll likely go with your competitor's house.
On the other hand, if your hand is much nicer than any competing house in the neighborhood at the same price (and is also priced well), you may not have to fixed stuff like the HVAC system to get a sale.
In other words, without having big picture about what you're trying to do with the house and what the competition looks like, it's impossible to recommend whether you should replace old (but working) components of the property.
As long as everything is functional and not putting the property or tenants at risk (nothing is about to leak, explode or disintegrate), hold off on the capital repairs until they need to be done.
The one exception is stuff that would be a PITA to repair while a tenant is in the property. For example, a roof is pretty easy to replace without disturbing a tenant, but if you were going to have to do any major rough plumbing or electrical in the next couple years, it's better to do it now while there's nobody living in the property.
Utility companies may test lines, sometimes with a meter and some do it with a lighter (lol).
All that will really mean is that there are no leaks up to the appliances. If they turn the stove and furnance on, pilot lights, they will test the air and vents for safety and compliance. They do not provide any inspection of the appliance as to condition or efficiency unless the guy makes a comment about them. And some utility providers sell appliances, so consider any sales pitch as it might be made. Sounds like you're Okay.
With a rental, I'd probably replace the water heater if it was more than 8-9 years old.
A tenant may not be riki-tik about letting you know the water heater is leaking until it becomes a serious problem that'll end up costing you way more than simply replacing the thing in the first place would have.
Everything else, most rational people are gonna notice and let you know about.
The good part about it is that it is a ranch. Nothing costs much money in a ranch. The roof is cheap and the plumbing is often simple. If you think the roof is going to go get a bid and build it into your costs. If you buy it right and have the right guys working for you none of this should sink your ship.
Guys, I think I should provide more information about the deal and ask another question. This property can be rented for around $800 per month, and there is no hoa fee, property tax is $500 yearly. Considering what need to be fixed before put it for rent, what would be the highest bid I should put?