Electric or Gas Heating?

[Melissa Gittens]

Hi All!

I recently purchased a 3 family and noticed that the property has a central gas heating system/furnace. Since it is a 3 family home and I do not want to be liable for paying the gas bill for all 3 units, I have opted to separate the heating utilities. I have received mixed information from other real estate investor/mentors in the area who say to go electric as it is cheaper to install. The other side to this is, if I go with electric heating the cost to the tenants during the winter will be astronomical, this will in turn drive the tenants away and they will search for better housing. 

In my other rentals I have separate gas heating but don't know what the expense is to install. I think gas heating is better as it is cheaper to heat. My plan is to get a plumber/HVAC company out to give me a quote on adding two furnaces to the property or submetering .

Please let me know your thoughts on this, especially if you have separated the utilities in your rentals before. Any advice or ideas would be greatly appreciated. As of right now my decision to either go electric or gas is holding up my reno. 

Thanks

[Kevin Enderle]

Gas is a lot cheaper for your tenant to run. That means they are more likely to be able to afford to pay the rent. Yes, a bit more Cap-X up front, but brings higher value and more rental upside as you can advertise Gas furnace to save money during the winter. Upgrading the Attic insulation is also a relatively cheap thing to do that can pay big dividends by lowering tenant costs so you can recoup it in marginal rent.  I just put in Gas and upped the attic to R-60.