Help with Charlotte NC rental HVAC issue

[Justen Johnson]

Hi All

I recently acquired a rental property in Charlotte NC - Condo. The tenant reported A/C not working so I called my Home Warranty Company and they diagnosed it as a bad compressor. They fixed this after the 60 dollar service fee and 200 dollar part disposal fee. The system was still not working so they came back out and stated it was a reversing valve leaking which they do not cover. Got a second opinion and contractor stated he would have never replaced a compressor on a unit that was 17 + years old and there were many other issues with the unit. He would recommend a new unit which would run 9,000 - 15,000. Tenant is very reasonable and has accepted fans FOR now. I was thinking about getting a mobile unit from Walmart to give me some more time to think about next steps. The contractor stated that A/C is not mandatory in NC however I rather keep this tenant happy then cause an issue by not coming up with a solution. I am about to cancel my Home Warranty (Choice) since is seems the big ticket items are never covered. My investment including closing costs to acquire this property was 18k (2018). It is currently cash flowing 190 per month so the thought of having to shell out another 9-15k on this is daunting.

My questions are:

1. What would you do at this point?

2. Is there a downside to holding off on the HVAC unit knowing it will need to be replaced in the future eventually

3. If replacing HVAC is the best option does anyone know contractors that can do this at a fair price? The condo is 3 bed 2 ba - 1,122 sq feet.

Thank you in advance for your feedback!

[Randy E.]

Originally posted by @Justen Johnson:

Hi All

I recently acquired a rental property in Charlotte NC - Condo. The tenant reported A/C not working so I called my Home Warranty Company and they diagnosed it as a bad compressor. They fixed this after the 60 dollar service fee and 200 dollar part disposal fee. The system was still not working so they came back out and stated it was a reversing valve leaking which they do not cover. Got a second opinion and contractor stated he would have never replaced a compressor on a unit that was 17 + years old and there were many other issues with the unit. He would recommend a new unit which would run 9,000 - 15,000. Tenant is very reasonable and has accepted fans FOR now. I was thinking about getting a mobile unit from Walmart to give me some more time to think about next steps. The contractor stated that A/C is not mandatory in NC however I rather keep this tenant happy then cause an issue by not coming up with a solution. I am about to cancel my Home Warranty (Choice) since is seems the big ticket items are never covered. My investment including closing costs to acquire this property was 18k (2018). It is currently cash flowing 190 per month so the thought of having to shell out another 9-15k on this is daunting.

My questions are:

1. What would you do at this point?

2. Is there a downside to holding off on the HVAC unit knowing it will need to be replaced in the future eventually

3. If replacing HVAC is the best option does anyone know contractors that can do this at a fair price? The condo is 3 bed 2 ba - 1,122 sq feet.

Thank you in advance for your feedback!

Congratulations on getting into the REI game!

I would not spend a thousand bucks to try to save a 17-year old unit.  It was worth $260 to try, but it's not worth another 6-700.  Too much risk that something else will fail on it sooner rather than later.

 That quote of $9000-$15000 is ridiculous.  Assuming the ductwork is fine and assuming this isn't a 5000 sq ft mansion, you can get a new unit for around $5500 including a new furnace.  If you need only a new AC, it will be cheaper.

Get more quotes.  If you can't find a low quote, I can give you my guy's number.  He works out of the Triangle, but he went to Hickory a couple of months ago to install a new unit for my brother -- same problem as you, he closed and two months later the A/C died.  And my HVAC guy also went to G'boro for me last summer. He'll probably go to Charlotte too.

Don't let the start-up costs get you down.  It happens in this business sometimes.  It's great when nothing unexpected comes up early.  But once you do this, at least you know you won't have to worry about the HVAC for a decade or two.