What should I expect cost wise with oil boilers? Deal breaker?

Question

I’m looking at two deals that can make me $700- $1,000 monthly profit. After mortgage, taxes and insurances. Both have oil boilers. What should I expect? Is it a deal breaker?

Mike Dorneman · Answer

@Danny Rodriguez I’m in NE PA, and have oil burners in about 12 over my houses. Unfortunately natural gas isn’t available in many of the smaller towns out here.

They require annual preventative maintenance, (approx $300/year). As for oil cost and consumption, it’s can vary greatly. The efficiency / age of the furnace, the insulation value of the home, the windows, the temperature the tenants sets the thermostat at...

With all these factors, I would never include heating oil in the rent. This is an item just like electricity. Always set up in tenants name, never ours...

Matthew Paul · Answer

You can count on the tenants running out of oil when you have oil furnaces/boilers . Then you can count on them complaining that the furnaces use too much oil or they dont have the money for fuel . Then you can count on them calling you because the furnace needs to be bled once they get oil in the tank .

Danny Rodriguez · Answer

@Joon Lee btw I’m not planning on purchasing a house with an oil boiler in the future. Unless the numbers look right after removing the oil boiler and converting it to some other form of heat (preferably electric).

Joon Lee · Answer

@Danny Rodriguez Many people don't like boiler and I don't like it also for MF properties. Landlord needs to pay for heat and there aren't many options to find a good maintenance company. Thank you.

Danny Rodriguez · Answer

Correction. $1000 income after mortgage , taxes and insurance. Didn’t include the other expenses (vacancy, repairs, capex, management.)anyway@Mike Dorneman + @Joon Lee . I found out that 1 out of the 2 houses I was looking at has been converted from oil boiler to electric heat. The house needs some repairs outside. Estimating around $5,000. Should maintain well after repairs. The inside I would rate a 6 out of 10. 10 being best. Tenants have clutter all over but I seen worse tenants. I’m gonna buy it. It cash flows great

Joon Lee · Answer

Do you have updates? I found some good properties, but all properties have boilers and I gave up to purchase the property because I don't have any information about boiler system. What was your decision? buy it or it's deal breaker? I just wanna know :)

Danny Rodriguez · Answer

@Danny Rodriguez I heard companies charge $500 monthly more or less for oil during the winter months

What should I expect cost wise with oil boilers? Deal breaker?

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