Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Rehabbing & House Flipping
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 3 years ago on . Most recent reply

User Stats

13
Posts
7
Votes
Clare Yuritch
7
Votes |
13
Posts

Replace boiler with central heat + air conditioning?

Clare Yuritch
Posted

Hello!

I'm in process of rehabbing the top floor of a duplex (this unit is 4 BR / 2 BA about 1500 SF) with plan to refinance and keep as a long term buy/hold rental. We acquired tenants downstairs - they're on a M2M lease but we'll ask them to sign an annual lease in a week or so, and see if they stay or go. They're currently paying a little less than market, but their lease allowed all sorts of things that we would not re-up (chickens, trailers and cars in driveways etc).

For the upstairs, we are targeting, I think conservatively, $2k/month which is the high end of the market.  There are not many 4BR units to use as comps and ours will be fully remodeled (new LVP flooring, stainless appliances, shaker cabinets, granite). Even with a conservatively estimated $70k renno we expect a 10% cap rate and 22% BTCF.

The unit is fully gutted now. Current boilers are30+ years old for the radiator heat.  The estimate to install a new system for furnace and a/c for this unit was estimated at $12k.  We are in NJ and the rentals seem to be mix of central AC and window units generally, but ours will be one of the nicest in a quickly appreciating market.

I'm floundering with my PRO and CON list and need to make a quick decision!  We can fit it in the budget, the numbers still work well, but I'm don't know how impactful it'd be to potential renters and dont want to over improve or waste $12k!  The benefits of a new system on reduced capex are nice, but installing central air where there was low-maintenance window units before seems like a wash.  Any advice very much appreciated!!

Loading replies...