Should I Replace Boiler Type Furnace with High Efficiency for Rental SFH?

Question

I am looking at buying a SFH home for rental in Milwaukee, WI. It has the old boiler type furnace. I believe it works OK. Since I plan to keep this as a long term rental property, I want to keep this furnace instead replacing with the high efficiency furnace. At the time of reselling the house many years down the road, I may replace the furnace. Any suggestions? What are the pros and cons of keeping this old boiler type furnace?

Is it a good idea to replace boiler type furnace that is working fine with a new high efficiency?

Any suggestions are greatly appreciated.

Thanks

Dave Carpenter · Answer

I had older furnaces in my duplex, but did not replace right away. I heard from the tenants after the first winter, but they didn't have a huge issue with it. I decided to replace both a year later with the same tenants in the building. When they got their bill the next winter and it was half the cost they were very excited about it. My point being you could create good will by waiting a year before replacing it. It helps the tenants appreciate what you are doing for them. I suppose you could also increase the rent to accommodate for that, but then you would be losing some of that good will.

Matthew Paul · Answer

Is it a natural gas or a oil fired boiler ? Does it have a domestic water coil for the hot water also ? Why ? The high efficiency oil furnaces need to burn either low sulfur oil or kerosene , both are more expensive than # 2 oil . The difference in efficiency between an older gas boiler and a newer may not justify the cost . A large cost saver is the domestic water coil .

Ramon Jenkins · Answer

@Lokesh W. my exact philosophy : ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ " don't have to worry about this for a while "

Lokesh W. · Answer

@Bill S. , Yes, insulation is the key to saving on energy. I have to see if this works ok. This is an REO and I'm visiting this property this weekend. I will try to get an furnace expert to go with me for an estimate. @Jenkins Ramon , Thanks for your response. I will have to see based on the estimate of replacement. THere are other repairs that may need to be done on this property. The good thing about new one installed by a reputed company is that I don't have to worry about this for a while. The old one will always some small issue once in a while. @Stephen Doyon The house was built in 1900. This is in one of the best neighborhoods and most of the houses here are over 100 years old. I don't the age of the furnace. @Dave Carpenter If I replace the furnace before the tenant moves in, I can use the hard money financing for all the repairs. If I do this later, I may have to use my finance (which isn't so bad but this is a consideration). All this depends on the estimate of replacement. @Mike H. Thanks for the response. I wish I could get a discount like that in Milwaukee :). Yes, for that cost I would have replaced. I will see how much it costs here in Milwaukee...

Mike H. · Answer

I've had two houses with a boiler. The first house I came across one of these was the first house I bought as a rental. The boiler in it was leaking in a couple of the rooms. I think I was quoted something like $250 apiece to replace them. The place already had an A/C and the quote for a new furnace was like 2k (brother in law discount). To me it was a no brainer. For one, I was afraid that more of those radiator things might go which meant more costs and I was also afraid of water damage to the house if the things went bad and nobody was home. Regular furnace was just easier.

Stephen Doyon · Answer

I'd definitely want to know the age, condition and the efficiency of the current unit before making a decision like that. Do you have that information yet?

Ramon Jenkins · Answer

I’m personally for replacing right now. Reason – tenants and property owners our both concern about utilities cost via Wisconsin Energies. I would mention replacing cost of furnace now as part of your OTP Just my two cents

Bill S. · Answer

My rule is, if it's not broke don't fix it. That said, broke can mean that if the heating costs for tenants is way out of line (very poor sealing/insulation and poor efficiency for heating) then it will cost you in turnover. Meaning, tenants will move because the utilities cost too much. They can live cheaper in the same unit elsewhere so they move after one year. If that's the case, seal the building envelope and insulate. Cheaper for you and save them more in energy than a high efficiency furnace with poor insulation/sealing. If the building is well sealed and insulated then nothing wrong with your plan IMO.