I am looking to purchase a home in Grand Rapids to use as a rental, but it doesn't have central air. As an out of state guy, I was wondering if any other local investors had any insight on how much of a requirement that is and what premium the market places on homes that do have central air versus those that do not.
To clarify - the heater is a forced air furnace, so I should be able to tie into the distribution system if I were to add central A/C. I appreciate your thoughts!
Hey @David Kramer - I'm curious what turned you on to the Grand Rapids market? It's funny - I also live in San Diego and own a couple investment properties in Grand Rapids.
For your question on central air - I would say it's a plus but not a requirement. You can certainly still find a good tenant without central air, although tenants do prefer it. As far as the rent premium, my guess is you would get an extra $50 a month or so.
What area in Grand Rapids are you considering?
If you're having a hard time finding a cash flowing property in your back yard, might as well look in someone else's back yard, right?! Awesome, thanks for the insight! This one is in Wyoming. I am also looking at properties in the West Side and Grandville!
Definitely not a requirement for most renters here--I would say most would just view it as a great bonus if you have it. Most renters are used to putting up window AC units for the 2-3 months of the year it gets muggy. I think Ben is correct with around a $50 estimate for rent increase.
It's not always that simple to add one on to existing furnace systems though; I recently got a quote on adding one and it was much higher than I expected.
@James Marshall - awesome. Appreciate the feedback. I am definitely going to get a quote but it seems like it might not be the hassle or investment (at least for now).
I find that having Central air in my Wyoming rental is an item that sets me apart from other advertised rentals and i get a bit of a premium on the monthly rent becasue of it.
@David Kramer I don't know your market but I suspect it would be similar to Indianapolis or Kansas city where I'm active. It really depends on the class of property and what is customary in the area, I can tell you that you would have a pretty tough time renting an A (virtually impossible) or B class property without central air. You may get by with window units in a C class but personally I wouldn't recommend it. It will be harder to rent and it will effect the quality of tenant you get but as I said, it comes down to what is typical in your area. Your property manager would be the best one to advise you,
@Mike D'Arrigo thanks for the input. It is something I plan to do, but am in the decision process for whether we do it right away or after the first year of having it cashflow. I have spoken with a few managers about the implications either way. I definitely value their keen market insights.
@David Kramer the problem that I see with waiting is that it could have a big impact on the quality of tenant that you get. Just as you want to be choosy about the tenant that you accept, you want a tenant that is choosy about the home that they'll rent. Tenants that are less discerning about where they live do not make ideal tenants. If you get a bad tenant in that year that you put it off, any of that cash flow can vanish if you have to spend a lot of money to make it rent ready again.
hey guys, if you want a good referral on an hvac guy. Send me a PM. Hes by far has the best price in the area