No HVAC

[Stanley E.]

BP, I am hesitant to purchase an investment property without HVAC. Not really keen on buying one that has or needs window units. Should this concern me or should I overlook this preference and focus on the numbers/cash flow? What are the pitfalls? Thanks. S.Ellis

[Randy E.]

@Stanley E., I understand your trepidation.  I was confronted with the same issue my first time out.  When you say, "no HVAC", I'm assuming you mean it has no central forced air heating or cooling.  I'm assuming it is heated with baseboard heat or kerosene heaters, and that it is cooled with window ACs.  These are not insurmountable problems.

Of course, cost is the issue here.  For a house under 1000 square feet, a new furnace, including installation, might run you between $2000-$4500.  The range is for whether or not the house already has duct work, model choice, and regional price fluctuation.  If you want to add AC to the system, it will cost more.  I've heard slightly higher prices mentioned, but not many that come in under $2000.  

Don't make the mistake of going with a national retailer who offers the option to pay by the month.  I got an estimate a few years ago for $10,000-$15000, and that was with all the duct work already in place.  I couldn't get the sales rep out the door quick enough.

As long as you incorporate the cost of the HVAC into your analysis of the deal, it shouldn't be much of a hindrance.  I've had two installed in different rental properties.  It took about a week from first visit, to ordering the unit, to installation.  Sometimes it might take a few days more because of waiting for permit inspection, but that shouldn't be a problem.

Honestly, I'm happy to find a property with a dead/damaged/missing furnace.  I can use that "problem" as a negotiating point and get the property for a lesser price.  Then, after the new unit is installed, I know the house has a brand new energy-efficient furnace that is going to last for at least the next 20-30 years.  That's better than waiting for an old furnace to die in the middle of winter when a tenant is demanding the heat get fixed immediately.  

Good luck!