Converting Apartment Bldg from Oil Heat to Nat. Gas

[Aaron Mazzrillo]

I have a 3 unit apt bldg in MA, what is commonly referred to as a 'triple-decker' out there. It is currently heated by and oil burning furnace. After some investigation, I have discovered a program that will lend property owners up to $25,000 at 0% over 7 years to convert to natural gas. Since I am currently paying for heat, I plan on installing individually metered natural gas heating units in each apartment. I have been quoted from $10-$13K for the work. Based on what I now spend for oil, it will be about a 30% return on my investment. Actually, it will be much higher if I qualify for the program since I won't be out of pocket for the work. I have several of these bldgs, but I want to experiment with one to see how it works out.

My questions; Does anyone have experience with this type of conversion? If so, are wall heaters in each unit the best option? I don't want to do baseboard heating because it takes up so much wall space and I'd really like to eliminate the use of a steam heating system. Any other issues I should think about? I thought about just converting the existing oil burning system to natural gas, but have yet to find someone who can tell me the savings I might realize and if it is worth it.

As always, thanks in advance!

[George Paiva]

Hi Aaron, I acquired a 3 family in Feb 2012 with one oil burning furnance that provided heat and hot water to tenants at Landlords cost. In addition they were not zoned so basically the previous owner on the first floor controlled the temperature. We replaced that with separate Natural Gas boilers in time for this winter.

The oil furnance was located in the basement and fed hot water to each floor / tenant in one continuous loop that circled the basement with offshoots to each radiator depending where they were located. These were cast iron radiators.

After much discussion with HVAC and Plumbers I decided on installing 3 separate metered natural gas boilers. They would be connected to the already Natural Gas meters located on the property. We eliminated the continuous one loop and installed 3 loops, one for each tenant. The first floor received all new baseboard since we renovated that unit fully. The second and third floors, we tapped into the existing piping and cast iron radiators located in their units from the basement.

We eliminated as much cast iron and copper we could from the basement and replaced it with Trac pipe for the gas supply and PEX for all the supply and return lines.

I spent about $9-10k in just material and about ~$3k in labor. I also redid all the plumbing in the basement so hard to nail down the exact labor cost. I kept my boilers in the basement due to space constraints for the 2nd and 3rd floor. I also kept the existing cast iron radiators as I didn't want to intrude too much on the tenants currently living there.

My goal was to get them off me paying for heat and hot water as it was a $3k plus cost every year to supply oil and it wasn't even zoned. This has so far worked out great. No issues at all with heat and tenants are happy that they can control and have a efficient heat source.

If you have the space I would look into putting the heat units in the apartments. Not sure what rebate or program you have but you can look into the direct vent inline heat and hot water systems in one that are out there. They are pricey and may cost you a bit upfront. By providing a separate heat source to each tenant you will make out in the end.

Of course if you wanted to do this on the cheap you can go all electric baseboard and eliminate the steam. Its much cheaper to install electric depending if your panel can handle it. BUT tenants hate having electric heat here in the Northeast because the cost falls on them. So its up to you. If your properties are in decent b-class neighborhoods then go for Natural Gas and pay the higher upfront costs because it will cost the tenant less to Heat. If you have these properties in less desirable locations, in my opinion electric baseboard in each room with a thermostat for each room works best. Especially when in eviction court the tenant complains of no heat when all they have to do is turn the dial. Also much easier to maintain and replace.

If you stick to the natural gas heat then it will depend on your property layout to understand if Forced Air, Water or Steam is the best option. You should consult a HVAC person on this.

Feel free to PM me with questions, Regards George