Hot Water Heater - Which one???

Question

Hi All-

I am gut renovating/expanding a 2300 square foot 2 family house into a 4100 sq. ft.  four family building.

Trying to decide which hot water system to install in each unit.  I am probably using heat pump systems for heating and cooling, so my needs to provide water for heating purposes will not be needed.  The property is located in New York City, so dealing with prickly tenants who lack patience should be assumed.

I have read about tank systems, tankless systems, etc.  For me it's pretty simple:  I want to (a) allocate the cost of hot water to tenants; (b) save on upfront capital costs to keep my budget in tact; (c) provide dependable hot water; and (d) check the box with long term investors I'm targeting for a flip of the property at completion.

Opinions are greatly appreciated especially from contractors/investors with low-rise multi-family experience in the northeast US.

Mark Elliott · Answer

hi michael. well, lets see. if you were to install hot water tanks, you would need to install 4, one for each unit. using a tankless system is nice, but the costs outweigh the benefits because each unit costs considerably more than a tank system does. sure, tankless systems offer on demand hot water, but they also use 150,000 btu's of heat to do so, vs. 36,000 btu's for a tank system. considerable cost increase per unit. not to mention, you can get a water tank for around 4-$500, vs, $1000 for a tankless system. on average, a tank will last about 15 years, vs. 20 years for a tankless system. i would go with the tank simply because overall, it makes more sense dollar wise

Stephen D. · Answer

Not sure if the BTU comparison is accurate... Generally, a tankless only activates all 150,000 BTUs when the hot water faucet is turned on.  Otherwise there's minimal energy usage as opposed to a tank design that's trying to keep water in the tank at a set temperature.  I would check the energy usage on both models and then make the determination.  Also, if saving space is a factor, tankless would be preferable but they are definitely more expensive.

Stephen

Max T. · Answer

I think you need a water heater, not a hot water heater... If the water is already hot, why heat it?

John Newman · Answer

Hi Mike,

If I were you, I would chose a gas storage tank water heater and not bother with a tank-less. The main reasons are that the storage tank type cost (capital) considerably less compared to a tank-less water heater, and you will not be living in the units to recoup the energy savings (operating costs).  I don't think the long term investors care whether the water heaters are tank or tank-less, just that they are new.  As an investor, if your tenants will be paying the gas bill, you will be best served by fitting a new tank style water heater that is properly sized for the number of occupants in each unit.  This will satisfy all four of your goals.

Tank-less heaters are best for your personal residence that you plan to live in long term.  I have to correct a couple points made earlier: life expectancy for a tank-less is 20 years, but only about 10 for a storage tank; and you cannot compare operating costs of gas water heaters simply by their input rate in BTUs.  This is only part of the equation.  The total energy used = rate x time.  Tank-less water heaters have a higher input rate, but burn for a much shorter average time.  The energy factor (ratio of heat output energy to gas input energy ) of a storage tank water heater is usually about .71, but a tank-less heater is usually above .95.  A more true comparison would be Therms/year, or the amount of gas used per year based on the standardized test cycle.  The Energystar.gov website has lots of information about water heaters and other rated appliances.  You can even compare different models.  If you do, you will find that tank-less models are more efficient across the board.

Michael P. · Answer

Thanks everyone, by virtue of everyone's input, it seems appropriate to install a natural gas fired water tank because in new york city upfront costs and more reasonable for me (upfront capital costs), while natural gas vs. electric costs are more advantageous for tenants over time.

Eric D. · Answer

I use 6-year, 40 gallon hot water heaters.  Tankless systems cost a lot, and require a lot of natural gas volume to support.

Each tenant can adjust the temperature and pay for their own gas.

Michael P. · Answer

Thanks to both. Long Island city. Got the benefit of infill zoning which extends Far from 1.25 to 1.65.

Cost wise, it's expensive because building code goes commercial at 3 or more units.

Angel Rosado · Answer

I would go with @Mark Elliott suggestion the costs as shown make sense to go with a tank system...I mean the capital investment is lower and the energy use is 3 times lower

Great idea of taking the 2 family and changing it into a 4...what area of nyc is this in if you don't mind me asking

Hot Water Heater - Which one???

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