Central Heat and A/C

[Matthew Brill]

Hey BP community!

I just closed on my first property, a duplex, and am just starting the rehab process. There property currently has in window cooling units and no heating source. I am already having to upgrade the utility box to increase the amperage. I am weighing the possibility of fixing up the current AC units and installing wall heaters in each room versus installing central heat and air. I plan on having the property as a long term hold. I spoke with my property manager and GC today, both who I feel are reliable and very knowledgable of my local market. It looks like it will cost me an extra $14,500 total to install the duct work and electrical and put separate running units in each unit. On the rents side, my PM anticipated that I may be able to rent each unit for $800 vs $775 if I were to have central heat and air. This would increase my rents by $600 a year which is a CoC ROI of 4.12%.

Is this worth the extra capital investment? Should there be something else I am factoring in?

Thanks everyone!

[Russell Brazil]

I went to college in Oklahoma....and I can not for the life of me imagine living in a property there without central AC. I would imagine it would be very hard to rent without it.