I'm completely renovating a new rental property in Catonsville next week and am trying to decide on gas or electric utilities for each property and can't find any real definitive suggestions either way with good reasoning. Have any? They're both going to be very nice 2 bed units renting at $1500+
@Ed Riemer - very glad you're asking this question. People will debate efficiency on your question, but bottom line- if you're in Maryland, you need to heat with gas. It will be cheaper for the residents as compared to some idiotic solution like electric baseboard, and cheaper by a good deal. I've heard the old argument, "You're not paying for it, so why do you care?" Will you care when prospects see that you've installed the most expensive heating solution, and decide that they'd rather rent a place with affordable utilities? Because that's what's gonna happen. I've seen it over and over.
Or what if you get an unsophisticated tenant(by the way- do you really want one of those?) who doesn't know the difference between electric baseboard and gas heat, but calls you monthly during the winter complaining about the high utility bills, and breaks the lease early? Or doesn't renew? Either of those will raise your costs of ownership.
Or how about when you sell your building to a sophisticated investor? Trust me, they'll roll their eyes when they see electric baseboard heat, and they'll say, "You know how much this is going to cost to convert to gas heat?" It will effect your selling price, and not in the way that you'd like.
Yes, it's cheaper to install electric baseboard heat. But you'll pay later, one way and another, and another.
It's a toss-up. I say go for what would be less cost to you. Who would be paying the electric/gas bill? In my area, gas seems to cost more than electric....that's something to consider too.
In my opinion renters and buyers seem to prefer gas for cooking and heat if it is available. I have also found that heat pumps do not heat the properties well in the winter so the tenants tend to turn them up to 85 plus then open the windows. Either was I would make sure they are responsible for utilities and you do not include it in your rent.
I would go with all electric for the rentals. My main reasoning behind this is due to Baltimore County's rental licensing requirements that are getting more and more strict on having carbon monoxide detectors throughout a rental unit. In 2018 Baltimore County is requiring carbon monoxide alarms / detectors to be:
(Ref: Baltimore County Notice with details)
The one in bold specifically concerns me. I'm not sure what this will entail, but it sounds like it's going to be expensive and possibly involve a monthly fee?
Of course you are exempt from all of this if you don't have any of the following in the dwelling:
This has made me want to go to all electric appliances in my rentals in Baltimore County. I myself like gas appliances as they're more efficient than their electric counterparts and in some cases, they just work better (gas furnace vs. heat pump). More efficient only really matters if you're paying the utility bill. Obviously, if the tenants are paying the utilities you're not going to see any savings due to more efficient appliances.
For rentals though, it just doesn't seem like it's going to be worth putting in gas appliances for these reasons alone. Not to mention gas appliances tend to cost a little more than electric ones; although somewhat trivial in the grand scheme of things and I don't think most tenants notice nor do I believe it will make or break most interested in renting.
Another annoyance with gas / gas lines -- gas leaks. I've had small gas leaks in 2 of my rental properties and it was costly and time consuming to track down, not to mention concerning.
Another point, if you don't already have gas lines run for these appliances, plumbers in the area tend to be more expensive than electricians for running pipe vs. having a new wire run; assuming it doesn't already exist.
Oh and one more thing... Baltimore County requires a permit and inspection for each new gas appliance you hookup as opposed to electric where you just plug it in (assuming, again the electric is already in place); no permit or inspection required.
Gas in rentals, at least in Baltimore County and maybe in general, just doesn't seem to be worth it.
Just some food for thought...
@Ed Riemer - very glad you're asking this question. People will debate efficiency on your question, but bottom line- if you're in Maryland, you need to heat with gas. It will be cheaper for the residents as compared to some idiotic solution like electric baseboard, and cheaper by a good deal. I've heard the old argument, "You're not paying for it, so why do you care?" Will you care when prospects see that you've installed the most expensive heating solution, and decide that they'd rather rent a place with affordable utilities? Because that's what's gonna happen. I've seen it over and over.
Or what if you get an unsophisticated tenant(by the way- do you really want one of those?) who doesn't know the difference between electric baseboard and gas heat, but calls you monthly during the winter complaining about the high utility bills, and breaks the lease early? Or doesn't renew? Either of those will raise your costs of ownership.
Or how about when you sell your building to a sophisticated investor? Trust me, they'll roll their eyes when they see electric baseboard heat, and they'll say, "You know how much this is going to cost to convert to gas heat?" It will effect your selling price, and not in the way that you'd like.
Yes, it's cheaper to install electric baseboard heat. But you'll pay later, one way and another, and another.
@Ed Riemer glad you're asking this question. [...]
Yes, it's cheaper to install electric baseboard heat. But you'll pay later, one way and another, and another.
Baseboards are not the only alternative. You can install an electric heat pump. I am actually thinking about getting rid of the gas in rentals completely. It makes perfect sense thinking logically.
Back to original question: Electric water heaters are maintenance free, Gas ones are not. No-brainer.
Gas units are more efficient. Heat pumps also need a back up heat source like a furnace as they stop working efficiently around 20 or 30 degrees resulting in the furnace providing the rest of the heat. If you already have a gas line to the house then this is a no brainer in my book to go with gas.
@Sebastian Taylor good point. Heat pumps are a viable alternative, but their cost-effectiveness depends on latitude and severity of winters. I have no experience with them. Also- I think the OP was asking about heating the apartment, not the water. I haven't put much thought into electric vs. gas water heat, which is strange since I analyze everything else to death.
I agree that heat pumps are less efficient, but it is not my problem. My problem is liability, and utility bills are tenant's.
I do have a gas line, but I connect it to gas furnace only. Range, dryer, water heater are all electric. It is a rental in Baltimore City, I doubt it requires gourmet kitchen with gas stove. Electric appliances are maintenance free and risk-reduced.
I am not familiar with Baltimore County, but what @Rob Poole has posted above is pretty damn bad. Authorities invent all sort of things that cost landlords money after money (like, arc-fault breakers), and I build a rental that is tenant and authorities proof.
(Did you know that you need to register the burglar alarm with the city???)
I would go with all electric for the rentals. My main reasoning behind this is due to Baltimore County's rental licensing requirements that are getting more and more strict on having carbon monoxide detectors throughout a rental unit. In 2018 Baltimore County is requiring carbon monoxide alarms / detectors to be:
(Ref: Baltimore County Notice with details)
The one in bold specifically concerns me. I'm not sure what this will entail, but it sounds like it's going to be expensive and possibly involve a monthly fee?
Of course you are exempt from all of this if you don't have any of the following in the dwelling:
The carbon monoxide alarm is a really a non-issue if I read the link correctly. It says to pick 1 out of the 4 to satisfy the code. Easiest way is to go with option 2, battery powered with 10 yr battery. I think these run in the $25 range. Then install one unit on each floor. I would get units that will wireless set off the other alarms. What you have listed in bold is an option that you would find with a security alarm system.
If you have a hardwired smoke alarm system simply change one unit for a combo unit and problem solved. Then add a clause in your lease to include the instructions on how to test the units and to test them in spring and fall. These are something you should be testing at least twice a year anyways. I do this a my spring and fall hvac cleaning appointments. Hope this helps!
I somehow thought the original question was about water heater. Anyway, I put my thoughts above.
The only property I own is my home, and I'm in Dallas, but I definitely prefer a gas hot water heater. We have had the misfortune of our pecan tree disconnecting our power line (twice), but I was still able to take a hot shower in the morning. If it was electric and our electricity went out, I would have to go to the gym to get ready in the morning. Just my thoughts.
Good catch in that version of the document and thanks for the tips. I quickly searched Google and glanced at that notice. I didn't catch the variations between the hard copy document I received and the one I found online. The hard copy I was referring to does not indicate choosing just one of those options. Maybe it was a typo? See below:
I currently use the interconnected hardwired smoke and carbon monoxide alarms in my units with 10 year sealed batteries to satisfy the current, and hopefully future, requirements. My guess will be that they will start requiring the same for carbon monoxide alarms (hardwired and interconnected NOT battery). This is what they did with smoke alarms initially. Overall this is not a big issue unless they start requiring this central control unit that requires some sort of monitoring service. My fear is they will start moving this way in the future. I don't want to start having to equip rental units with alarm systems and pay for the monthly fee that goes along with it.
I am dealing with an electric furnace now , it is not a good idea for cold winters, the tenant will be paying 200,300 plus dollars for heat ,every year you will be looking for a new tenant because they can't afford the rent and the heat bill, You have to insulate the pipes the walls the windows the doors the floors,everything to make sure no heat escape, I would have gas but the developer of the condo project installed all electric in the complex i guess because it was cheaper than installing gas. So if it gets really cold where you are ,go with gas.
I would bet its a typo!