To gas utilities or not?

To gas utilities or not?

Rental Property Investor · Member since 2018 · 42 posts · 20 votes

Hi all,

I currently house hack an upstairs/downstairs two family home, about 1650 SQ ft total with separate gas and electric meters.  It has two gas hot water tanks and one boiler (dual zone heat), so the tenants upstairs pay for their hot water but I pay for gas heat.  My plan is to move out in the next year and ideally I would like to completely separate the utilities.  The second floor hot water tank also needs replacing so I figured now would be a good time to get quotes and see what can be done (side note, I just had to pay a few hundred dollars to correctly separate the hot water as some plumbing was crossed).  I've had three plumbers take a look and the general consensus for most cost effective solution is to add a second boiler and replace the 40 gallon hot water tank for the second floor.  This comes in at about $7500 all parts/labor/tax included.  I'm wondering if it's really worth it given the large upfront cost or if I should just keep paying the gas utilities once I move out.  Since I've lived here I have a pretty good idea what the bill is like, but I worry about tenants abusing the utilities.  It sounds like a headache adding lease stipulations like setting a limit and billing for overages.  Also, it's harder to market the units because the rent price is higher due to gas being included (a lot of times people just see the sticker price and don't read further).  So, looking for opinions or if anyone has any other suggestions or solutions?  I plan to hold onto the property for the long-term. 

Thank you!

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  • Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    1 I am a bit confused, are the water heaters on separate meters? 
    2 If not then just pipe them separate since you have 2 separate gas meters (right? You are saying you have 2 separate meters)

    3 what is your market doing? I pay the gas for heat and it is worked into the rents. That is my market. Some newer buildings do electric and the tenants hate it. Also some nearby markets do RUBS and it drives the tenants my way.

    4 get landlordstat thermostats! They are a thing of beauty auto set back- your bill will be just fine!

  • Rental Property Investor · Member since 2018 · 42 posts · 20 votes
    6y

    @Patrick M. yes the two hot water tanks are on separate meters, but the boiler is on the first floor's meter.  So in theory, if I were to move out I would have to cover the first floor's gas bill (hot water, gas appliances, and heat for both floors) and the second floor tenant would be responsible for their hot water and gas appliances.  I hope that makes sense.  The property is in Albany, NY and the market is generally older multi-families (early 1900's) that run on boilers but the majority of houses have completely split utilities.   My home happens to be a 1960's cape that was most likely converted to a two family, hence the shoddy separation of utilities and plumbing.

  • Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    Thanks for the clarification. I think I would look into the cost of a house meter for the boiler gas before I would look at a separate furnace.

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