Replace 66y old Gravity Furnace with New Furnace and AC or not

[Josh Cook]

Should I replace my gravity furnace from 1952 for my rental property located in Minnesota? It's 66 years old so I am worried it may just die in the middle of next winter. I'm not sure how long they are supposed to last. It's spring right now and I have already gotten bids for installing a new furnace and central air. The bids range from $6500 to $11,000. 

I'm torn right now, do I wait until the furnace dies or do I replace and install AC? I told my friends who rent from me that I was planning to replace it with a high efficiency furnace and central air but I did not anticipate it costing this much. I'm currently house hacking and live on the other side of the duplex from my friends. I'm also planning to install AC on the side I live on which will run me about $3,000 since I do not need a new furnace and ductwork because the side I live on is forced air. I can not raise the rent when they renew since their incomes are lower. They plan to move out August of 2019 which is when I plan to raise the rent and move in someone new. Basically I feel as though I will be giving subsidized housing at the rent they are paying and adding a new furnace and ac.

My other option is to buy energy star window units for them and let them use those. They pay their own utilities. Also, I had the center for energy and environment come test their furnace which tested out at 75% efficiency, my furnace is 80% so not much better. They also updated the house for them to make it more energy efficient. I realize I got myself into a sticky situation.. this is my first rental property. If i do not do this I'll be over promising and under delivering but I also didn't know it would be this expensive since this is my first time doing this. There is nothing in the lease that states I need to replace the furnace or install central air.

Please help! Or give me some insight!

Thanks!