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Updated about 9 years ago on . Most recent reply
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Rental Hot water tank and furnace? Or own.... Ontario Canada
Hi everybody, I'm not sure if this has been talked about much... I looked through the forums and didn't find much... so sorry if it's a repeat question.
Currently I pay for all utilities in the bungalow I rent out... since it has 2 units and only the one meter for gas and one for hydro.
And currently the hot water tank is a rental. And it's on its last legs.... as well as my furnace... so I've been talking to the company who I rent the tank off of, and I find out that they rent finances aswell... so I am thinking... hmmmm... would it be worth it to rent the hot water tank and the furnace. .... end of the year get to claim it all in my taxes.... every year... forever...
Or am I waisting my money... obviously the rent compensates for the fact that I am paying it.... not that I can charge the Tennant more now... I mean in the future. The current rents that I currently receive covers it all pretty well though.
And also the fact that my current furnace and hot water heater are probably 20 years old... Obviously newer units run cheaper also..
Thanks for any input!
Lee
Most Popular Reply
Hey Lee,
I'm sure there are a few mixed thoughts on this, but here is mine.
For the average hot water tank rental on a power vent gas for example the rental is $30/month on my gas bill. A power vent gas hot water tank is approx $1200 installed or at $30 a month your looking at 40 weeks or 3 years and 3 months. After that all your money is just going out the window to the rental company.
Now bear in mind that nothing lasts long these days. The average tank should last you 10 years, but as things go this isn't always the case. With the rental it's no worry. If it goes, your covered.
On the other hand you have a tax write off for depreciation if you purchase the tank and you own it with a warranty supplied by the manufacturer and hopefully the company that did the install for a duration of time. On a hot water tank it's kind of a give and take.
On a furnace it's a bit of a different story. You would have to do the math on the rental fee, but a decent high efficiency furnace for the average 1200 sq/ft home should only run about 3000-4000 dollars and they last approx 12-15 years. The high efficiency furnaces do not last as long as the older mid efficiency furnaces because of condensation with the furnace and the heat exchanger.
Here is the big issue moving forward...if you plan to sell your property a rental furnace and tank could be an issue. When selling you would want to incorporate a buy out of some kind for the purchasers or at least offer this as an option. It does scare off a lot of people. You would have to look at the buy outs on both a hot water tank and the furnace to see if this is the route you want to go. Either way I'm sure some rental companies offer better buy out rates and possibly monthly rental rates.
Might I add that these rates have not been fixed in my experience. The hot water tank rental on my properties have gone up every so often. From $22/month to now the $30 I pay today.
Ultimately you can write them off either way, but you're likely to get a bigger tax break with a rental...I'm not an accountant though. However I haven't seen too many happy people who have done the furnace rental to date.
My prices are based on my experience buying and selling 25 homes and helping several people in the Niagara Region to install furnaces using good quality trades people who don't try and make a million bucks off of an install. Your prices in Peterborough should be similar.
Hope that helps...feel like I rambled a bit.
Best of luck,
Dave