Does Insulation Add Equity?

[Account Closed]

Hey BP. I am the owner of a 3 family building in the Greater Boston Area. I bought the building in June and will be looking to do a cash out refinance as soon as I can  to extract the ~45k I put into it and dump it into another project.

I got a MassSave (energy savings program in Mass) audit done, and they quoted around ~10k for insulation. Through the program, the insulation is 90% off, and then I can take an additional $750 off for a knob / tube inspection. So overall, I can get the whole building insulated for $250, which seems like a no brainer.

The catch is that I have to remove some knob and tube wiring that they found in the basement before the insulation can be done. My quote is $1895 for the following: rewire affected areas of basement and Unit 1 that have knob and tube. 8 outlets, 5 lights, 5 switches. This is basically the price for 2 licensed guys to do work in the place for the whole day.

My questions are:

1.) Is this electric quote too high? I know there's not a lot of detail here, but hopefully people have ballpark estimates. In the past I've consulted my friend (who is a licensed electrician himself) about the quotes I got, and he said my guy is fair.

2.) Is it worth the ~$2150 to get the $10k insulation job done? Will it actually add equity?

[Steve R.]

I don't think it will create any equity that you could pull out, but if you are planning on keeping the building, it seems like a good idea. If you are paying heat/air costs, it will reduce the cost and make you happy.  If the tenants are paying, it will reduce their costs and make them happy. It will also be easier to rent in the future when you show potential new tenants the lower utility bills.