Facing a tough decision re: steam heating with a pending sale

[Kevin R.]

Due to the great wealth of information and helpful people on BP, I was able to get my first home under contract last weekend. Here are some basic details about the property:

• $230,000 triplex (one unit per floor)
• Built in 1925 and located in Philadelphia, PA
• 2,550 sq ft
• Radiant heating w/ steam boiler (no ducts or AC currently installed)

I just had a home inspection and was told that the steam boiler is in pretty bad shape (which leads the inspector to believe that the radiators may have some issues as well due to lack of proper maintenance). In addition, he told me that there is currently only one thermostat for the entire house, and that it's difficult and expensive to zone on a steam boiler. With that in mind, I need to figure out what to do going forward. I can see the following as options:

• Get rid of the steam boiler and install high-velocity AC/heating (seems like the best, but PRICIEST, option)
• Limit steam heating to a single unit and install electric baseboard heating on the other two units (perhaps the most cost-effective way to go, though I would still have to install separate AC window units)
• Limit steam heating to a single unit and install ductless mini-split AC/heaters on the other two units
• Repair/replace the steam boiler with another steam boiler, fix any radiators that have issues, and keep the status quo without zoning heat (not ideal - I can already imagine the third floor being one extreme temperature while the first floor is another)

I'm really new to all of this and at a complete loss right now for how to proceed. Any advice or recommendations from the BP community would be greatly appreciated. Thank you!

[JD Martin]

If this place will be a cash-flowing cow, I would go for individual heating systems, whether that is separate gas furnace/heat pump systems or the Mitsubishi-type localized units. Then, with each unit individually metered, you have tenants taking care of their own utilities. And even Philly gets hot in the summer, so you really want to have AC in these units. 

[Christina Welch]

Have you looked into putting a Ductless mini spilt heat pump into each unit? The electricity bill will be a third of what it would with baseboard heat, energy efficient heating and cooling can be a big selling point for tenants. Check out if the power company in your area offers rebates, ours offers $1200 for each account. We are installing them in ours ourself, if you're an experienced do it yourselfer you could put it on yourself and save a lot of money. 

[Christina Welch]

Originally posted by @Christina Welch:

Have you looked into putting a Ductless mini spilt heat pump into each unit? The electricity bill will be a third of what it would with baseboard heat, energy efficient heating and cooling can be a big selling point for tenants. Check out if the power company in your area offers rebates, ours offers $1200 for each account. We are installing them in ours ourself, if you're an experienced do it yourselfer you could put it in yourself and save a lot of money. 

[Kevin R.]

Originally posted by @JD Martin:

If this place will be a cash-flowing cow, I would go for individual heating systems, whether that is separate gas furnace/heat pump systems or the Mitsubishi-type localized units. Then, with each unit individually metered, you have tenants taking care of their own utilities. And even Philly gets hot in the summer, so you really want to have AC in these units. 

Thanks for your input, Jd. I definitely plan to go with individual heating systems. The issue for me now is determining which of the options is best going forward.

Originally posted by @Christina Welch:

Have you looked into putting a Ductless mini spilt heat pump into each unit? The electricity bill will be a third of what it would with baseboard heat, energy efficient heating and cooling can be a big selling point for tenants. Check out if the power company in your area offers rebates, ours offers $1200 for each account. We are installing them in ours ourself, if you're an experienced do it yourselfer you could put it on yourself and save a lot of money.

Thank you for the feedback, Christina. Unfortunately, I don't believe Philly currently offers any rebates for installing mini splits. I am definitely still considering mini splits as an option, though.

I guess another option might be to buy three separate steam boilers and just run separate lines to each unit. Any thoughts on this strategy?

[Troy Sheets]

You need A/C to get top dollar rents. Steam/boiler is a lot of maintenance, the radiators take up floor space, etc. A gas fired, high efficiency forced air heater will run forever with minimal maintenance. They're nearly idiot proof in the first 5-10 years. Change the filters quarterly and you're set. 

The mini-splits are awesome too and save you from running ductwork, save space, etc. I think they're more expensive up front but they don't need gas and they're pretty efficient. Get quotes for both. Where we can afford it we're using only mini-splits. 

Definitely split the HVAC now, you'll only have this opportunity once. Make sure the sale price is reduced (or you get a credit or?) to pay for this. 

[Jonathan Andersen]

I have a few questions.

Are utilities metered separate to units? Gas and Electric?

The best option changes depending if you are paying utilities in the triplex or not.

[Kevin R.]

@Troy SheetsI figured you'd pop in with some solid advice as you are apt to do! Would you by chance have any reliable local HVAC guys who provide solid work and fair pricing?

[Kevin R.]

@Jonathan AndersenGas and electric are both currently metered separately to each unit.

[Ethan Giller]

I agree with @Troy Sheets... but only if your property is in a true A/B neighborhood, because you're most likely looking at a $20-30K expense for 3x new forced air with A/C and ductwork.  If you are in a B-/C/D area then I would either use the boiler for one unit and electric baseboard for the other two, or just go all electric baseboard.  Then leave it up to the tenants to get and install their own window A/C units if desired.

Feel free to private message me if you want a second opinion on the area and the deal in general, I own a lot of small multi-families in Philly.

[Jonathan Andersen]

In that case the high velocity system is off the table because it is so costly. Ductless heat pumps are AWESOME! They are mega efficient and easy to install, but zoning them is costly. If it is an open floor plan that is an option, but zoning multiple indoor units get expensive. If central cooling is a requirement and not a unnoticed luxury in that market they are still a good option. If not they are pricey. The outdoor condensing unit alone one a multi zone ductless system is often the same or more that a furnace, AC coil ,and Outdoor condensing unit combined. What you gain in efficiency with the ductless system does not benefit you if the tenant is paying utilities. 

*If you are concerned about heat only the cheapest option by far is installing three gas furnaces. You will not pay utilities like you would with a central system, and the equipment cost is low. 

Adding electric baseboard is very cheap as well but upgrading electric service to support the added electric load will cost more then the furnaces combined. 

The cost of 3 80%AFUE  40,000 BTU gas furnaces is about $1500 plus labor and misc. parts (which are cheap because not much is needed for gas furnaces). 

If you add cooling you will likely need electrical service upgrading because you will be adding at least a 90 Amp load for outdoor units alone to a 200 amp breaker (maybe) panel. Say you have a 200 amp panel and are currently using 160 amps of that service, You would have to upgrade to 400 amp service to avoid popping breakers constantly and or burning the place down. So, the electrical upgrade would be an added cost. 

I know that is a lot to take in, but I am a certified Service Technician that worked on commercial heating, cooling, and refrigeration for a decade. I do not do it anymore, but I still have 10 years worth of extensive knowledge on the subject floating around in my head that I love to share so it is not useless haha!

Feel free to contact me with any specific questions.

[Kevin R.]

@JD Martin@Troy Sheets @Ethan Giller @Jonathan Andersen So I'm taking your advice and getting a few quotes for installing three gas furnaces and corresponding ducts. I'm thinking there are two nice bonuses to this method: (a) I don't have to deal with AC wall units later (assuming I add AC in addition to the heat) and (b) some tenants will probably actually like the "exposed ducts" look of the units. I'll keep you guys updated...

[Mike B.]

@Kevin R... All good options as discussed in the other posts.  I worked with Creative Comfort Solutions when I purchased my duplex, which had a similar issue with that you described.  In the end, HVAC was added to the larger apt and the boiler was upgraded to a newer unit for the smaller unit (which can use window AC units).  At the time they did mention that there were Philly-specific incentives for HVAC, depending on whats installed, if you were doing a big rehab to your building.  Unsure if they're still doing this (my story is from 2 years ago), but something to look into.  I priced out options with several companies and Creative Comfort solutions had the most affordable options, were great to work with (promptly returned calls, always in touch, arrived on time for work, etc) and highly recommend them!