Calculating Oil Heat into numbers?

Question

Hi everyone!

I have started to run numbers on properties daily, and have seen oil heat instead of gas in a variety of units. Would the best bet be to aquire a past oil bill for a property, or can you estimate a rough number per bedroom/ unit? How do you like to factor in this expense?

Thank you,

Kyle

Colleen F. · Answer

Oil is tough, no per bedroom estimate I know of there are too many variables efficiency, building envelope and the price varies. If your tenants are paying I would not worry about getting actual cost. budget weather sealing upon purchase.  If you are paying try  to get the oil vendor bill to get a per season estimate on gallons of use. Use number of gallons x price  max over the last couple years to get max range. Alternately use 70% expenses instead of 50. If you have an old furnace figure in replacement cost.

Account Closed · Answer

@Kyle Curtin

If you luck out and spot a sticker / tag on the tank of the fuel provider call them and ask what to expect for an annual cost of you buy/ rent the place. Have sq ft and rough age they’ll likely give you a rough number. If not tag/ sticker, google ninja skills will help, call most common couple providers and do the same.

Colleen F. · Answer

@Greg K.  we just take a picture at the beginning and agree it will be the same at the end, has date and time stamp. Any reimbursement will be at the current rate of my local oil provider on move out. They sign an agreement to that effect. It is more straightforward to have the same price both ways.

One point on oil houses is that in our personal home we went to the trouble of having a remote gauge because of my husband buying oil on the spot market.  I haven't done that in rentals but might be good if the tank is not easily visible. You can also require they subscribe to automatic delivery  but they sometimes mess up too.

Steve Morris · Answer

On any type of bill, my preference is to get actual usage and billing.

You may have a very inefficient heat set up and it varies by season.  If you've got a real well-insulated place with an efficient heater, billing may be markedly less than average.

Greg K. · Answer

@Colleen F. Nice call with the automatic delivery to protect against frozen pipes

Greg K. · Answer

@Kyle Curtin I dealt with this a year ago.  I was budgeting $50 per month for oil for a 2-bed 1000 square foot condo.  When I had the tank filled I talked to the oil man and he said that most landlords put the cost on the tenant.  I followed that advice and created a separate oil agreement to the lease that started the starting level of oil in the tank.  If more oil was left in the tank at the end of the lease, I’d pay them back $1 per gallon.  If they didn’t leave enough then it would cost them the average price per gallon of three vendors in the area.  This worked out well for me.

Kyle Curtin · Answer

@Steve Morris

That is definitely true, it seems like there are definitely many more different variables with oil than gas. I’ll be sure to keep those in mind as well! Thank you so much Steve!

Kyle Curtin · Answer

@Kris H.

Those are very good ideas, I’ll be sure to keep those in mind as well! Thank you Kris!

Kyle Curtin · Answer

@Colleen F.

That’s a really good point! Thank you so much Colleen!

Calculating Oil Heat into numbers?

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