Chicago Heating - Wall Furnaces vs Ducted
I have to work on the heating system in two 800 S.F.; 2/1; in a C+, B- area. $750 - $800 rent range.
Ducted furnace with AC came in at 12K total before negotiation. I can get huge discount on furnaces. This requires installing supplies in each room and about three returns.
The place had wall mounted furnaces, so the infrastructure is there to install again.
The place used two, one in the kitchen/dining room and one in the living room/front bedroom. Two total per apartment. I can probably get great deal on them too.
I would like to upgrade, but those prices are high. I offered furnishing equipment, but the contractor will loose the markup on the equipment, so who knows if this will fly.
Have you had any issues with wall mounted furnaces? I nkow I could add an A-coil and condenser to the furnace for central air, but in this price range it doesn't really matter if they use wall ACs.
I think I answer my question already, but what do you think? Should I go with wall mounted furnaces?
Not sure if this is advice...but new HVAC to include AC for a rental priced only at $750 to $800 seems odd. If you are going to upgrade these units to include these (non essential) but extra amenities/conveniences would you not be hoping for a higher rent ? Otherwise why bother with the additional AC expense. Rent at $750 and if they want AC they can buy window units.
Adding AC as you know is not cheap and most older buildings in Chicago don't have central AC so adding it is adding real value that should come with a higher rent. Just curious to know your thought process.
I'm also interested how you get huge discounts on furnaces. You have to have a license to buy furnaces these days. It's not like you can go to Home Depot. Whoever is offering your huge discounts on furnaces, ask them to help you find an installer.
@Ronan M. - I'm considering section 8. They pay much more than the market rates. The cost difference is considerable.
@Nancy Curran - I'm a MEP Healthcare engineer. I have direct contacts with manufacturers and get industry discounts. I don't have the same relationship with the installing contractors. Also, it could be seen as a conflict of interest.
I don't find Section 8 rent much more over market. It used to be that way, not so much anymore. I feel they do a pretty good analysis of the neighborhood and if you are charging that much over market, they will tell the tenant to pick up the rest. And chasing down tenants for their measles $200 or whatever, was a huge time suck. For me, it wasn't worth the nonsense of inspections, etc.
This is good feedback.
A few blocks, a fellow investor is getting $1,200 for a 2/1. I can only get $775 - $825.
So, this is what's motivating me to do the research. $400 extra will pay for the GFA in little over a year. If I don't get that much, that's another (sad) story.
Having an updated unit, is not over market. Every neighborhood has big fluctuations in rent price, depending on amenities in building or apartment. So if your space heaters/window ac units get $800, I could see a central heat/cool with a nice paint job getting $1200, they would both be at market. Personally, I look favorably on making capital improvements. It brings better people and a better price when you sell.
Just curious @Frank S. who gave you the original quote? I am in a similar situation w/ space heaters. Thinking of doing GFA / AC upgrade.