Posted by TOM on December 23, 2000 at 02:46:03:
Thanks for the info, FHA wont allow that type of heater, would make it hard to resell on a assumable.
I can get out of the contract not a problem.
I think your right the tenants there told me they have subsadized electric via the gov.
I always feel bad for the realtors involved in that so much work went into the deal. Oh well,how the whole process is set up makes it hard for everyone concerned.
Thanks
Buying units with electric heating… Dumb? - Posted by Tom
Posted by Tom on December 23, 2000 at 24:36:21:
I am currently in escrow on a 3-plex.Rentals are heated with electric units. I can go FHA.I will pay 90,000,and they are in good condition with a new roof and paint. Some cosmetic work, about $6000 to get them where I want them.
I can expect 425.00 for each.The bottom line makes cents but the big draw back, electric heaters.
Any thoughts would be appreciated.
Tom
Re: Buying units with electric heating… Dumb? - Posted by Jim Locker
Posted by Jim Locker on December 23, 2000 at 16:40:05:
I have a few dozen units with electric heat. I have not found it to be a problem with renting.
One complex of mine (18 units…a Cardinal community) was sucking up the tenant’s paychecks - and snow was continually melting off the roofs. I dropped about $2,500 into 8 1/2 inches of new blown in insulation in the attics, which nicely dropped the tenant’s electric bill and made everyone happy…not to mention that they were able to stay warm after that.
There is also a bit of salesmanship involved. Where I have baseboard electric heat, I point out how they have the opportunity to be efficient by turning up or down the heaters in various rooms depending on time of day and which rooms are being used.
I also always point out that electric heat, when it malfunctions, won’t kill them the way a gas furnace can.
Of course, when in one of my gas heated units, I point out how much less gas costs. But then, this winter, gas is shooting up in price so maybe the difference isn’t so great right now.
Basically, it has been my experience that there is little difference in rentability betwen gas and electric units.
Re: Buying units with electric heating… Dumb? - Posted by phil fernandez
Posted by phil fernandez on December 23, 2000 at 06:19:00:
Tom,
Electric heat in the north is a tough sell to tenants. I’ve bought units with electric heat in the past. Some of the buildings had bulked up insulation to where the heating costs weren’t bad. But even with reasonable costs, the potential tenant will more often than not be scared away.
Also due to the electric heat, rents get held down pretty good. Tenants need a larger portion of their income to pay for the heat.
As soon as possible convert from electric to another source of heat. Depending on your building it could be easy or quite difficult and costly. The configeration and size will determine this.
In the past I’ve installed direct vent Rinnai gas furnaces in about 7 of my units that previously were heated by electric and have been very satisfied with the results. The Rinnai’s are small, very efficient and easily installed.
So I wouldn’t let electric heat stop me from buying a rental. Just adjust your offer knowing that in the future you will have to spend money to switch heating systems.
Re: Buying units with electric heating… Dumb? - Posted by Paul_MA
Posted by Paul_MA on December 23, 2000 at 02:15:19:
Tom,
I had an electrically heated building, and converted it to Monitor heaters by kerosene. They are super efficient but not allowed in all states. You may have a tough time renting the units.
Some unconfirmed news:
Prior to my ownership, these units were rented to welfare recipients. I guess welfare covered the cost of the heating.