HVAC or heating/cooling options as a service?

11 Replies

Hey BP,

In the middle of a rehab on my first BRRRR.

Duplex is about 3000sqft and has ducts to first and second floors, but not to 3rd, and needs to heating and cooling options for entire duplex. 

Option 1: pay around 20K to install new HVAC/minisplit system.

Option 2:  pay for heating and cooling as a service which is about $350 a month without installation fees for 10 year contract, they do all needed repairs and service a year included, write it off as a service. when I sell pass the cost/contract off to the next buyer. details at: https://www.knochelmann.com/advantage-program/heating-air-conditioning

Has anyone had anyone used something like option 2 and what are your opinions?

Thanks


Hmm 1st time I'm hearing about this, interesting. What I would do is get a few bids on installation of a whole new system. Then calculate your annual cost for option 2. Then based on those two numbers see how many years it would take to payoff your hvac installation if you go with option 2. See if its worth it to you. Do you see yourself owning the building for that long? 

First time hearing about this option. It appears that the HVAC company is doing a rent-to-own HVAC system and bundling it with a maintenance plan. The cost comes out to be $42,000 total which feels expensive to me. That's over $2200 per year in interest and maintenance; a home warranty would be much less than that and covers more. Personally, I love to sell on RTO but hate to buy on it. Also, it would be more difficult to sell the house with the contract in place. I would pay upfront and recoup my costs with the refinance. Ultimately, it all depends on your goals and financial situation. I agree with Daniella, and would seek some additional bids. I've used the same HVAC company for the past 15 years and they are very investor friendly. They will give you a good price, but will not give you terms and payment is due upon completion. Private message me if you would like their contact info.

$20k for 2 furnaces, 2 air conditioners, some duct-work and some drywall? LOL LOL LOL LOL LOL LOL LOL

Get some more bids. Are you in CA or NY or some other insane market? A furnace installed is about $3k. Air conditioner a bit less. Add some work for the additional ductwork at a cost of roughly $10k??? LOL. 

I am from Ca...

I'm waiting for another bid to come in. 

The general problem with this property is that it is a 3 story unit, where the 2nd and 3rd floor is a unit. and the 1st is its own. This requires a new HVAC for the first floor and mini split system for the 2nd and 3rd floors. 

I'll def talk with other other HVAC companies. 

But this company says "all our landlords use this method" And I have never heard of it before. Was just curious of what others have done and if other people have used it. From your opinions it seems definitely more costly over time... especially if I hold it for long. 

@Alex Hoang

I don’t like option #2 at all. Do it once and do it right. Open up the walls to continue the duct work up to the third floor. If you have an attic, even easier, just open one or two bays and continue the supply and return to the attic and then feed the rooms as necessary from the attic through the ceiling.

Why would you need a mini-split for the two story unit?  Most two story houses use a single furnace/air-handler.

5k total including duct work is what I'd expect to pay for two story unit. First floor 2500-3k for a new unit with existing duct work. You may check prices of equipment on-line and most will sell to you direct if you wan't to avoid equipment mark-up.  At the very least you'll know what the contractor is paying so you may negotiate with some knowledge.

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