Oil Heat or Gas Conversion

[Jonathan C.]

Previous owner of a 1960 duplex rental paid heating for tenants. House has oil heat with oil tank in one of the basements. Furnace is cast iron and has estimated 10 years left and chimney liner has been replaced. Oil tank and heater are original.

We eventually want to convert to gas or electric/oil so we can split the heating bill and have the tenants pay it rather than us pay their heat. The question is when.

House is currently not wired for gas but the neighbor does have gas hookups. We do not so will need an estimate from gas company.

Previous heat use from responsible tenants average $166/month.

Would it be better to wait a year and build up a reserve and negotiate when the tenants lease is up? Or pay outright to have it done before a tenant moves in?. It's our first property and paying outright will stretch the budget thin and I'm unsure of what hidden costs still await us.

We could also do an oil/electric split but I'm not sure how tenant feel about dealing with oil, plus I think gas would add more to property value when we want to sell many years down the road.

And just to share, the water is also not split but we have come up with the idea of each tenant pays a 1/3 and we pay a 1/3. It's worked well for someone we know in the area. It should help avoid excessive water usage as splitting water would be a costly pain in the butt.