Splitting Gas/Electric Utilities or alternative?

Question

Hi All -

I just closed on a two flat + in law in Chicago (Portage Park) and I'm having some challenges on how to properly manage the utilities.  This will be a house hack and a long term hold.

Currently there are two panels for electric and gas with all appliances being gas powered.  Due to some electrical issues, I need to upgrade the service entrance and I will likely add a 3rd common panel to avoid being responsible for electric.

Although, I'm not sure how to handle splitting the heat.  Currently, there is one furnace heating all units.  The past owners used the building as related living so it was an acceptable arrangement, however, one individual controlling the temperature would not be sustainable.  The 1st floor unit is about 1200 sq ft whereas the 2nd floor unit is about 750 sq ft and the basement is probably 600 sq ft.

Is the most logical option to install a 2nd furnace/AC condenser and also request a new common gas meter from Peoples?  Or possible electric baseboard heat with window A/C units for the smaller units?

If it was just the above, I'd be OK splitting/installing and a 2nd furnace but due to some issues with plaster walls that may require significant attention, the budget is getting thinner.

Open to all feedback/suggestions.

John Warren · Answer

@Faraz Tariq of course! PM me and we can jump on a call at some point. I am always happy to share my experiences if it can save you some money/time.

Faraz Tariq · Answer

@John Warren Glad to know I'm not alone.  Interesting that you comment on the 1/4" drywall over top.  One contractor recommended that and I thought it was a shortcut but it seems like it actually has its place.  Do you mind if I sent you a PM to get your take on my estimates for skim coating?

John Warren · Answer

@Faraz Tariq I went through this same issue when I did a gut rehab project on a 19 unit in Berwyn. I now know every way to repair, bandage, go over the top of and replace plaster. In a lot of cases, you can repair plaster when you cut channels for conduit, etc. You can also put a thin sheet of 1/4 inch drywall over the top. We did this a lot on ceilings that were in rough shape. If your crew knows what they are doing, they can use special anchors to pull the sagging sections flush and then this top layer will create a nice, smooth looking ceiling. It works in areas where you can sell the "vintage" charm! In a B-/C+ type of area I would have no issue repairing plaster again. The issue comes when you want an A+ product. The only way to get back to that level is to get rid of the old plaster once it reaches a certain level.

Faraz Tariq · Answer

@John Warren Sticker shock is accurate, haha.  Although, some say they can work with skim coating plaster, others say not at all and they want to gut and replace.  Sort of unrelated to this topic, but would like to hear your take as I'm guessing you run into this issue often down in Berwyn.

@Kenneth Garrett After speaking with a few HVAC companies, it may be cost prohibitive or too challenging as there isn't a great exterior wall where the interior air handler can be mounted and have the refrigerant lines run.  I think I may have to adapt to using Nathan G's suggestion.  The NEST thermostat allows for it to be locked within a certain temperature range.  So assuming, I'm within the required temperature ranges for a Chicago winter, it's fairly similar to where a property includes heat in the rent.  To cover my bases, I'd probably include it as a lease rider.

That said, I'd love to hear who you worked with and how the cost/benefit worked out.

Kenneth Garrett · Answer

@Faraz Tariq

I have a 2 unit building with shared gas boiler.  I installed two mini split units.  The unit is about 600 square feet.  The split units run off of the electrical, there are two meters one for each unit.  This way they have a/c now.  No more fighting about heat.

John Warren · Answer

@Faraz Tariq I feel like you are going to be better served finding a reasonably priced GC in that area to help you. I don't think it makes sense to piece meal something like this. You might get a bit of sticker shock when speaking to GC's, but you are looking to do quite a bit to the property.

Faraz Tariq · Answer

@Nathan G. Thanks for the reply.  How do you suggest handling the temperature of the units?  Each person may want a warmer/colder unit.  It's interesting you mention the ductless as I assumed this would be cheaper as well, however, the two consultations I've had with HVAC companies thus far recommended against these units do to higher cost considering ductwork for the 2nd unit is already in place.  Unfortunately, I would need to sub out the work for this completion.

@John Warren Thanks for the reply.  I anticipated in the budget for electric but I poorly anticipated for possible additional gas meters for common elements as well as the plaster as some of the property has drywall (or what appears so) and I didn't realize the ratio accurately.

The 2nd floor already has a gas meter so a theoretical 2nd furnace could pipe into this.  I'm just unaware of the cost to now add an additional gas meter for the common elements (water heater, dryer and range).  The piping is all there or if it's simpler to remove the gas piping and replace with electric water heater, electric dryer and electric range (garden).

Do you have any recommendations for a Drywall/Plaster contractor? I had someone come out and he recommended a gut of the 1st floor unit but I have not received a quote quite yet.

John Warren · Answer

@Faraz Tariq this is always an issue when you acquire these types of buildings that aren't set up correctly from a mechanical setup. To answer your question, you will need to know your hold time. If this is a long term play (7-10 years or more) then it makes sense to get this set up the right way. Don't pinch pennies when you are doing mechanical work as it will always come back to bite you.

One strategy that may save you a bit if you are doing electrical is to look into installing an electric furnace instead of a gas. Baseboard electric is also an option, although it will require a lot of cuts in your plaster to do it to code. You also could do the new gas meter/gas furnace combo for the 2nd floor. No matter which way you go, you are getting into a fairly significant rehab scenario.

The plaster walls are something that people don't talk enough about as to how it affects construction costs and timelines. My GC on a gut rehab project here in Berwyn was explaining how much more it adds to the scope and it is significant.

Nathan Gesner · Answer

Splitting the gas and heat would be a significant expense. I generally don't recommend major improvements like that unless they can pay for themselves within a reasonable amount of time.

Advertise the units with heat included and Tenant takes responsibility for the other utilities. Split the cost of heat between the units based on average historical use. Heat costs vary dramatically between summer/winter months so get the average for the previous year, split it, and charge the same amount every month.

If you do decide to install something, consider a split unit that provides heat and cooling. EXAMPLE These are significantly cheaper, provide heat and cooling, and you may even be able to install yourself.