Adding a Second Bathroom / Tankless Water Heater

[Mike Welch]

After a seven month search, I've found a fantastic 3 bedroom 1 1/2 bath home which I have under contract. This will be my second home. My strategy is long term hold (I never want to sell my properties). I'm very excited to own this new home as it is really well located, and has a great layout with attractive features and good bones overall.

The house was owned for the last 40 years by a single owner who is selling as she is no longer to take care of the property as her husband has passed away. I'm anticipating at least $20K in rehab fees on the property as many aspects of the house need to be modernized.

I have two questions for the experienced landlords on this forum:

1) Second Shower: Currently, there is only a single full bathroom in the house. The second batch, in the master suite, has only a toilet and sink. Would adding a second shower make an appreciable difference in its appeal as a rental property?

2) Tankless Water Heater: The water heater in this house is the original 1956 (!) issue and needs to be replaced before I bring a tenant in. I could possibly free up space for the second shower by putting in a tankless water heater and repurposing the closet where the 'vintage' unit currently sits. Any landlords with experience with these units? Are they reliable and do they pose additional liability risks or maintenance expense I should consider?

Thank you in advance for your replies!

[Uwe K.]

Not 100% sure about the second shower. For resale, absolutely yes.
Rental, it probably depends on the neighborhood and what people/tenants expect. With a second shower you can market as 2 full baths, which may be a hit for that family with two kids and all need to get ready in the morning.

Water heater:
Several years back I put one in my house. I love it and can live with some drawbacks. Others didn't like it as much at first, mostly because of the following issue:
Tankless heaters need a minimum flow to be activated. The bigger the unit (e.g. 2 bath require more than the smallest one), the higher the required flow.
That makes a hot water trickle impossible. And our 1940's galvanized pipes, esp. hot water, were, well, almost solid :) So the kitchen sink and dishwasher would not really get hot water anymore until those pipes were replaced.

If it was a pure rental, I would probably forgo the tankless version unless you have a higher agenda of creating more space. This is mostly due to the "unknown" factor by tenants and the upcoming potential complaints about it.

We had tenants in our house for a while, they, however, did not complain about it.

I don't see any higher liability issues. One thing you may have to consider is the gas pipe size and venting. Because they may have significant higher BTUs, I needed to get 3/4" gas pipe to the unit, for example.
Also, it requires sufficient air supply for intake, a closet will not be enough. So you may need a fresh air intake from outside. Plus you may have to vent to the outside, unless - and don't quote me on this - you have a chimney liner.