Oil heat

[Jeff Aponik]

Hi gang,
We purchased our first property with oil heat and it's not a good candidate for a conversion. I am looking for some advice on how other landlords handle oil heat with their tenants. This is a single family home, so the tenant will be responsible for paying for heat.

Here are the options that we are considering:
1. We obtain the oil delivery service and put the tenants on a monthly budget bill plan. This puts the responsibility on us to collect from the tenant each month.
2. We require the tenants to obtain their own oil delivery service and run the risk that they allow the tank to run empty.

On a related note, the tank was empty when we purchased the house and we had to put oil in it to confirm that the boiler was operational. Should we make the tenants responsible for some of the cost since they will benefit from the oil that is in the tank at move-in?

I appreciate any feedback from the other landlords out there.

Thank you!

Jeff

[Roy N.]

Despite working with several customers in the industry (my other business), I'm not a fan of having several hundred or thousand gallons of heating fuel (essentially diesel) sitting around our rental properties. Our insurance provider also penalizes us for oil heat.

When we are putting together an offer on a property with oil heat, we price in a conversion to either electric (heat pump) or natural gas.

That said, we have ended up running a property with oil heat prior to conversion and, while the tenant was responsible for the heating costs, we coordinated the oil delivery - given we received a 5% discount as a result of our affiliation with a local apartment owners association, the Tenants were keen on the arrangement.