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Converting Apartment Bldg from Oil Heat to Nat. Gas
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!
Is the current system forced air with ducting?? Easier but again splitting ducting inside walls could/will be a lot of work. ESP if it's a three story.
If not, sub dividing the hot water/ steam feed will be a very interesting exercise.
We did a two story by running those small diameter Aluminum stretch feed tubes that they use for gas inserts. But we had straight runs & could access the 2nd story feeds through a chase that had been installed during the original
construction. Smaller ducting is not an efficient alternative but it worked enough to sell the place with sep utilities.
Sorry I just noticed you have steam heat.
Gas inserts may be the way to go as some wall heaters in our town are no longer legal.
Depending on the number of rooms in ea unit it's going to be expensive.
I just sold a large duplex that we put sep furnaces in with ducting to the rooms. But we had to tear up the flooring of the upper unit to get ducting to the lower. But we were doing extensive rehab.We got the idea from a modular home build we did that had small sep furnaces on each floor.
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
Thanks George Paiva. It sounds like my bldg is set up exactly like yours was. My units are all 1 bed / 1 bath with cast iron radiators. I don't want to do electric heat just because of the cost burden on the tenants.
I don't think there is much room for a forced air system, but I am very interested in the 3 unit gas system you had installed. I will definitely copy and paste your paragraphs into an email and send it over to my contractor to see what he thinks.
There is a rebate program available for installing gas furnaces so I may look into setting up a system similar to yours. Do you know what the average cost of gas is for your tenants now?
for a 1 br/ 1 bath in warmer lattitudes a couple of 'mini split' systems would be worth considering.
I second the approach mentioned by George Paiva above.
If the existing boiler isn't too old, you might be able to convert that to gas by installing a gas gun from the likes of
Midco International
Carlin Combustion Technology
Wayne Combustion Systems
that way you would only need to add two boilers. I installed a Midco Economite in a unit this past year and it was less expensive than replacing an entire boiler.
Unless you had high efficiency direct vent systems installed (not so common with boilers, but they exist), the extra burners will require more intake air for combustion. This could lead to backdrafting of intake air through the chimney (not a good thing). So you might need to install an air make-up kit to bring outside air into the area where the boilers will be situated; I used something called a scuttle.
Sometimes you also need to consider chimney lining to handle the exhaust properly without it leaking into living spaces.
You might also want to consider separate hot water heaters as well, if the building does not already have those.
One thing not mentioned is how close the nearest natural gas main is to this property. I looked at a property a year ago that had oil, and was not interested unless I could do the gas conversion. Nearest gas main was over one block away; gas company said the cost to run the line would be between $100 and $125 per foot of line. No way I was doing that deal. and make sure they are willing to allow the number of meters you'll be needing.
Last thing to consider is heating for common area; there might be a vestibule / hallway that needs to be heated. Tenants will probably balk at paying for heating that area, so you might need to plan for a house system for that (could be electric if space is limited in the boiler area).
Originally I was looking at these tankless water heater boiler combo made by Rinnai or Navien. Very compact and efficient. BUT very costly about $2500 for each unit. Then the kicker was my Plumber and HVAC people tell me that there are reliability issues still with these units where the controllers, circuit boards go bad. They get a lot of service calls for them. For this reason I ruled them out.
I wanted a sure fire reliable system that didn't result in service calls for the next 15years :)
They recommended I go conventional with separate units for each boiler and also for water tanks. It was also much much cheaper and because each unit is separate you can have fail safes. For instance if water tanks go in 10 years I don't have to take down heating systems and vise versa.
I paid about $1100 for each peerless boiler and about $350 for each water tank. So give or take $1500 for the water and boiler. I still had additional equipment costs because I elected to replace all plumbing and heating piping in the basement and also paid additional for redundant valves and anything else that made sence to make it easier for maintenance and repair.
Here is the original boiler and tank for reference. BTW, I sold it on craigslist for $1200 cash !!!
Here is the new conventional hot water tanks and boilers.
As you see the before and after looking at the basement pictures was a good 5-6months of work. I am lucky enough to have family in the trades so I was able to have plumbers or HVAC come by on weekends or on off days. Again no brainer for me to spend a little more on doing it right and making it so its easier to perform maintenance.
Steve is right be aware that you will need more intake and exhaust from having all the units I installed. I didn't have a worry because I had a full basement and rather large at that.
I did go ahead for extra measure and install a chiminey liner to avoid any liability.
As for how close you are to gas lines. Do you have meters installed now? Or do you need that all installed as well? I was lucky to have meters already in so it alleviated a lot of headaches.
Heating common areas? Hell no. I don't heat common areas.
The existing boiler will probably be too big for just one apt, so unless you want to keep getting complaints from your tenant about their high gas bill you should just do (3) new ones, be sure to add an auto feed system for the water but make sure that you keep the routine maintenance up. Your installer must be licensed for those programs. The way that George did his install is ideal. Direct vent equipment cost a little more but will probably be best since you won't have to deal with lining the chimney and the tree huggers will love you (way the cost both ways)
It will be much cheaper to separate the loops for each floor using PEX (it can be snaked up to each apt) and keep everything else inside the apartments the same.
Wow George Paiva - Thank you so much! Pictures are great. I have a full basement as well, but it is small so space is a concern, however, there isn't anything else down there so it might work. Each unit has it's own hot water heater already and there are 3 gas meters with an extra hook-up space for one more if needed.
There isn't any common area, just a stairwell up to the 2nd floor unit, but I would never consider heating it - and I wouldn't ever expect the tenants to be responsible enough to close the door at the bottom landing! Actually, the thermostat for the current system is in the 1st floor unit. I noticed one winter that the 3rd floor had the window open. When I asked why, he said cuz it was so hot in his apartment. That started me down the road to helping my tenants become more financially responsible and less of a financial burden on me.
The existing system is a Weil-McLain and I asked the oil supplier about selling it, but of course they had no answer. They just want to come out and do a $400 service call right after they charged me $698 for filling up the oil tank. (With what I've learned from you though, those days are soon to be over!)
I'm going to copy your pics and send them to my contractor. I think I can get rebates on all that gear as well so that coupled with the 0% loan may actually put some money in my pocket to do this rehab - and that is how I like to get things done - get paid to play!
Probably have to wait till summer to do this though since I also need to line the chimney and I don't think taking out the current heating system in January would make my tenants very happy.
Oh great to hear it sounds like you are half way there with meters already installed and separate water tanks. This is a no brainer!!! Just get an idea of how big your units are and how many radiators and the HVAC person can size up what boilers you can use. I could of gotten away with slightly smaller boilers 55k btu but went with the larger 75k btu because I wanted more to power the old radiators. Try to get as many estimates from contractors you can this winter.
Come the spring you can rip out that old boiler. I too had a Weil McLain which I said I sold on Craigslist for $1200 it was only 9 years old.
Worse case you get a chiminey liner and have to pipe in air from outside. That isn't very $$$.
Yeah there are rebates, you need to call your gas company to find out which manufacturer they accept for the rebate program. I didnt do the rebates I recall because it was only a very minor selection of manufacturers which my pumbling supply house wasn't going to give me a deal on. I went with Peerless boilers for thier reputation on reliability and also because I got a great deal on them. $1100 each for 75k btu. I think they retailed for $1500 to the every day Joe. So 200-300 rebate wasn't going to diswade me. Your mileage may vary on this so call your gas company to find out. Also I am somewhat unique in that I get contractor pricing due to my dad being a contractor. I just basically opened up accounts to all his supply houses indicating to them that I am a mult-family owner of many properties that will need renovations.
Not sure if you are one of the types to get "down and dirty" with renovations but it has saved me a bundle in equipment costs for my properties. I also have many family and friends in the trades so I can get things done on the cheap but may just take a little extra time so I have to budget that.
Keep us posted in the spring when you start this journey!
I've had a chimney re-lined in winter, with snow on the ground and on the roof as well. No real downtime for the heating system - maybe half a day. That installation was just dropping the liner down the chimney from the roof, hooking it up in the basement, and extending the chimney to meet latest code since existing chimney was too short.
Regarding rebates. Some of them are for owner occupants only. Some of them are only for high efficiency equipment (the more expensive equipment that landlords don't usually buy). So check into any limitations and requirements before you count that rebate money in your bank account.
As far as tankless units, the guys who installed the gas line in my last conversion indicated that the gas main / line could not handle a tankless unit in that house. Something about pressure or flow volume wasn't sufficient to support tankless. So if considering those, be sure to look into whether the gas company supply lines are capable of handling a tankless water heater.
@Aaron Mazzrillo how did you make out?
Zero luck in getting a contractor to do the work. I'm now thinking of liquidating the property and moving the money to a place where people actually want to bid on jobs!! Thanks for following up though.
Why not try electric? If each unit is already separated from an electrical standpoint, electric baseboard heating should be an option. Electric hot water heaters run about $400 a piece....
Originally posted by Torron Brinkley:
Why not try electric?
I wanted to convert to natural gas for cost reasons. Electric would also save me money, but tenants don't want electric heat as it is extremely expensive.
@Aaron Mazzrillo sorry to hear about your issue. If I was up in MA I would be able to help you out with Contractors. Welcome to the Northeast. Its a big pain in the butt doing anything around here. Most likely the contractors either think its too much work and don't want to deal with an out of town owner OR its because the town will give them a hard time to convert.
Here in CT it wasn't easy as I had environment permission to remove the old oil tanks and all the permitting that went with the conversion. It was a real PITA but I have family in the trades that helped me through the ordeal.
Where in MA is this?
The property is in the northwest corner of Mass.
Originally posted by Aaron Mazzrillo:
The property is in the northwest corner of Mass.
Like in the Berkshires near NY?
I was going to say I might be able to help you find a contractor or someone to buy if you did decide to liquidate, but probably not out there as I am close to Boston.
A- Have you tried contacting the Gas supplier
for names of contractors?
The the system George has is Gas fired- Hotwater Baseboard!
Best way to go if you can swing it!
There is also the option of Gas-Fired Steam -seperating
the service but using existing risers and radiators. not preferred
but your pocket will dictate!
Under NO CIRCUMSTANCES will you get good results
or returns from just switching from an oil" Guzzler" to a Gas
" Glutton " new unit! There is no doubt about it! Large
Gas fired units do not send up heat the way Oil fired units
do! ( leave the explaination to the teckies) but thats the
experience! All you effort and expence - complaints!!
In either Steam or Hot water-BaseBoard the out-put
of the units is critical! Make "tripple-sure" that what you
are being offered is what you need- plus !
Tank abandonment is a Big issue -You may have to
get seperate help for this. There are Co's that will
buy the oil in the tank,others that can pump out
residual sludge,Remove the Tank,Back-Fill site to level.
Or, if permitted - Cut,clean-Fill Tank with Sand!
( not preferred) The potential liability from a leaking
oil Tank is reason enough to change by itself - but
" leaching" from even an " empty " , improperly managed
abandonment is a Big Risk too!
Most likely the Local Codes require permits for the
Conversion but may or may not have requirements for
the Tank Abandonment.
All said : Even to sell you are going to lose both
" Marketability" and Value with your existing set-up!
Any work you end up doing -Keep Good Records!
Permits,Contracts,Warrantee Info, Worksite " before"
and " after" pictures! The cold weather has'nt hit
yet Some Contractors are out there looking for something
to do ! keep working on it!! Best for Success!
Did you do this conversion yet?
I do love steam but even so; if it were me I would keep the steam if I could get steam boilers small enough to match the loads. Steam is dead simple and dirt cheap to operate.
stephen
------------
Originally posted by @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!