Oil heating vs Gas Heating

[Jose N.]

I currently am looking at a 2 family with an oil burning boiler for the rent. No gas at all coming into house. Everything is electric.

I was wondering if it made sense to convert to gas heating and give tenants individual meters and so they can pay their own heating for it.

info: oil costing $5,000 a year probable more next year.  Conversion cost estimate = $22k

Let me know if anyone has dealt with this before or if you have an alternative solution?

[Neal Collins]

@Chris Parrish Thanks for the shoutout. @Jose N. The other people have brought up great ideas...converting one and keeping the oil for the other nets you the same result of having separate bills for tenants. 

Someone else mentioned the rent being too low. You can always take the heating bill and divide it amongst the sq ft of each unit to get a proportional pass through charge. That way your rent doesn't go up per se making your units less attractive on the market but you still won't have to eat the cost. Lookup RUBS if you want more info on this.

Individual control over heat in each unit is pretty major however. If it's all on one system and your tenants don't agree on the temperature then guess who they are going to call? Something else that you may want to consider is what will that cost savings do to the value of the building? If you look at it purely from a capitalized value at let's say 6% then that $5,000 expense that got moved off your operating expense just increased the value of the building by $83,333. 

One last recommendation is to do some research and see if there are any non profits working in the energy sector in your area. They often have rebate programs to install gas heating or appliances.