Real Estate Investor · Bay Area, CA · Member since 2016 · 37 posts · 13 votes
I have a 10-unit apartment building and got a call from my PM this morning that there was water pouring out of the boiler in the basement/boiler-room and so when he had it inspected, he was told the boiler was gone and needs to be replaced.
He says that it will cost $40K - $60K to replace the boiler. Is this accurate? Also, what kind of boiler should we use to replace it - something that is more modern, efficient, and effective?
Also, what alternatives are there instead of using a boiler system for heating?
It was suggested that we can install electrical heating systems in each unit so that the tenants pay their own heating bill and we won't have this boiler issue going forward. Approximately, how much would this cost?
The building is in one of the states that has a lot of snow so the winters are rough. Thankfully, the weather is fine now so we have some time, but not a lot before we find a proper solution.
Investor · Phoenix, AZ · Member since 2017 · 583 posts · 919 votes
7y
I agree with Justin. The best way to gauge prices is to get multiple bids/estimates for replacement. That price does seem high, though. We have a 98 unit property with a boiler, and were told during due diligence that a new one would be about $25,000 (if it ever needed replacing during our hold). We do this for all of the mechanicals when purchasing a property, and set aside sufficient reserves. I highly recommend it.
Real Estate Investor · Bay Area, CA · Member since 2016 · 37 posts · 13 votes
7y
@Sam Grooms Okay, I see. Yes, the price did seem quite high so I'm considering going with the individual electrical heating but I agree - getting several bids/estimates is the way to go.
Palo Alto, CA · Member since 2017 · 230 posts · 200 votes
7y
The cost range for boilers varies, depend on size of units, any building modification to meet new city requirements, efficiency, etc. For a 35 unit building with large units, I got quotes range from $30k (sufficient for building size) to $70k (high efficiency ones with addition work on the building). Your numbers seems very high for a 10 unit building. Try to get multiple quotes. Likely you will get high quotes due to the emergency situation.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
7y
Get 3 estimates directly sent to you not the PM. This isn't a small repair. Make sure you look at things apples to apples, you don't need one person quoting one thing and another quoting a different thing.
Electric is an option but while the units are cheap you may need to upgrade the electric to accomplish this and also improve wiring in the units. Electric baseboard is not cheap to run so you may want to figure that you may get less rent, it depends on your area. However if the tenants want to heat with open windows or set heat on 80 you are at least not paying for the waste. If considering electric, the units are very reliable and last a long time.
@Sam Grooms Okay, I see. Yes, the price did seem quite high so I'm considering going with the individual electrical heating but I agree - getting several bids/estimates is the way to go.
Thanks.
Problem with that is , are the units metered individually for electric , if not , your electric bill will go thru the roof . If they are , you may have to upgrage the service line and panel for the additional electric . The tenants will then complain because their electric bill will more than double .
Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
7y
$40K to $60K seems high. $15K to $25k is more realistic. As others have said, I would find a few companies that specializes in boihers and get a few bids.