Gas boiler or Electric baseboard: Is it all just preference???

Question

I just recently got a 3-unit building under contract that currently has no heating system in the home. I am trying to decide between rewiring the entire house and putting electric baseboard (this would also get rid of knob & tube wiring in basement) or getting 3 new gas boilers to heat the house that way. Everyone I ask has their own opinion, but definitely the most common response I get is if the whole house is electrical baseboard then the tenants are going to have extremely high electric bills in the winter (Boston area). Although that may be true, isn't it basically the same thing as gas heat because instead of 1 high electric bill, they would have a low electric bill and a high gas bill in the winter? Is this thinking flawed? Also if I choose to install new gas boilers, I still need to update much of the electrical in the house. From a rehab perspective, is there a significant cost savings for doing electric everything vs gas heat & stove with some updated electrical?

Definitely excited for this project but this choice definitely has me a little worried about making the wrong choice. The plan with this property is BRRRR and if the rehab hits the top end of our budget it will become a flip. Any insight and/or expertise on this subject would be greatly appreciated.

Thanks

Definitely excited for this project but this choice definitely has me a little worried about making the wrong choice. The plan with this property is BRRRR and if the rehab hits the top end of our budget it will become a flip. Any insight and/or expertise on this subject would be greatly appreciated.

Thanks

Michael Gessner · Answer

@Jonathan Santiago for starters the knob and tube wiring is a must to go regardless weather or not u do gas or electric. Which choice to go with is really dependent on location, if you have gas, I'm assuming natural gas well then that's what buyers and tenants will want as it's much cheaper and more efficient then electric baseboard. Some locations electric is cheaper then say oil. Also new gas boilers should last atleast 20 years, so yes expensive upfront but will pay for themselves over time.

Jonathan Bombaci · Answer

Not to throw another horse into the ring on you but you could do a mixed heating system. Do a gas Rinnai monitor heater or a high efficiency minisplit (with AC) In the living room or kitchen then Electric baseboard in the bedrooms and bathroom for supporting heat. It’ll be much cheaper than doing the 3 gas boilers but would be more preferred than just electric baseboard throughout. The monitor heaters are very durable, very efficient, and easy to repair or replace and you don’t have to run all that plumbing for the boiler which will be expensive. We have done this at multis in NH where they had an outdated centralized heating system and I didn’t want to install 5 or 7 boiler systems at the 2 properties but we still wanted to separate the heating and get that bill off of us.

James Kojo · Answer

caveat: I'm not an expert in hvac, but I do have a lot of experience as a landlord with various heating/cooling systems.

First off: are you sure you're actually talking about 3 separate boilers? All of the boiler systems i've seen/owned serve multiple units. I actually have 3 boilers which heat 36, 36 and 25 units respectively. If you're talking about a single boiler system, then I'm with @Benjamin Aaker. Splitting up the costs between tenants for a shared system absolutely sucks. The only thing that's worse is not splitting it up at all and including it in the rent. I speak from experience here. You want to see how much a heat a tenant can waste? We've entered into apartments were the heat was set to 90's while the tenant was out to work. Why? Because they can. Now enter the game of whack-a-mole where you are fighting against the tenants who want to waste heat because they don't pay for it.

From my perspective, and the perspective of your next buyer, do whatever it takes to make sure tenants pay for their own usage.

Hope that helps!

James Kojo

Benjamin Aaker · Answer

Also consider that it would be unusual to do three separate boilers. If you put in one, how will you bill back the tenants for the gas bill or do you plan to pay it yourself? Separate electric baseboard heat is an easier way to have the tenants pay for their own heat. You should check what the rest of the multifamily units in your area are doing. This will have a big effect on tenants you can attract. I live in South Dakota where it gets extremely cold. I have one building heated by boiler and another with electric baseboard. The expenses(to me) are much lower in the electric one and I don't have any trouble getting tenants for either.

Also, get rid of knob and tube but make sure it doesn't brake the bank first. That can get very expensive.

Lien Vuong · Answer

From a buyers (eventually when you condo this) and a renter's perspective, FHA by gas with A/C conversion is going to be a much more efficient system. Renters are typically OK with baseboard hear but as a long term hold and higher valuation of property, opting for the gas option would be the best way to go.

Alecia Loveless · Answer

@Jonathan Santiago

The place I work uses a combination of a mini split and a furnace but I think the combination of the mini split with the baseboard would be the cheapest, easiest way to go for you, the investor.

In northern New Hampshire the electric is prohibitively expensive so we wouldn’t consider any type of electric so you might try to compare costs for your tenants before making a decision.

However it is definitely nice to have the mini split at work providing air conditioning to the whole downstairs of my office come summertime.

Erik W. · Answer

Per therm (unit of heat) is the way to measure, because the same house will require the same number of therms to heat regardless of what kind of system it is.  So do the math and figure out how many therms it takes to heat up the place and then compare the cost from your utility company.  In every market I've ever heard it discussed, natural gas is 30-40% less expensive than electric, so unless completely disconnecting gas saves you a monthly connection/service fee that more than offsets this, then it makes sense to stick with gas.

That said...there's more to this than just therms and dollars...

Some tenants have unreasonable fear of gas, thinking they will blow sky high or die from carbon monoxide poisoning.  Properly installed gas, is just as safe and in some cases safer as you can easily smell the odor added by the utility company if there's a gas leak, whereas a short in an electrical circuit can go unnoticed until it starts a fire.  Also, I've seen people push their upholstered furniture right up against electric baseboard heaters and then crank them up to 90 degrees because the lack of air flow makes it take forever to heat up the area.  Fire hazard?

Too, electric heat generally takes longer to warm up an area compare to forced air.  Might not be as much of an issues if you're boilers are creating radiant heat thru water pipes.  I'm not familiar with what type of system you have.

Generally speaking, the most cost effective way to stay warm in the winter is to dress in layers and set a reasonable room temperature in the high 60s or maybe 70, but some tenants like to sit around in their shorts and t-shirts with the t-stat set on 80, then complain when the heat bill is high.  It is what it is.

Bob Solak · Answer

Sounds odd that you have a Boston area residence with no source of heat.  Do you just mean that the current heating system is busted?   Also, you are saying gas "boilers" which implies steam radiators.  Do you mean boilers or furnaces (which is a forced air system)?

If there are already existing steam radiators/piping and you just need to replace boilers, then that will be your cheapest option.  If you are talking about installing gas furnaces, then you also will need to be installing forced air ducts everywhere, which potentially means a lot of work (depends on the house) running ductwork.

Electrical baseboard heat also means running a lot of conduit/wire and possibly panel and service drop upgrades.  That tube and wire will have to go anyway, so you'll have an electrical contractor out regardless.

As for actually monthly expense, electric will be more expensive.  Heating with natural gas is the cheapest way to go (thanks to fracking) and will be for quite some time.  That assumes of course that you have a gas line into the building already!

Gas boiler or Electric baseboard: Is it all just preference???

Most Popular Reply